Q: How to get out of student loan default with Central Research?

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When federal student loans default, the Department of Education usually places the loan with a private collection agency. Central Research Inc is one of those agencies.

Who is Central Research Inc

Central Research is a private debt collection agency. They act as a debt collection agency for several different federal and state government agencies, including the Department of Education.

So if you’re wondering if Central Research is a legit company? Stop wondering. They are.

Why Does Central Research Have My Student Loans

Central Research has your student loans because you have defaulted on your federal student loan debt.

Related: Student Loan Default: The Dangers and How to Get Out

When you first defaulted, your loan servicer sent your loans to the Department of Education’s Default Resolution Group/Debt Management and Collections System.

Central Research Collects Federal Student Loan DebtChances are that if Central Research is contacting you about student loan debt, that debt is for a federal student loan. In my experience, I haven’t known Central Research to collect on defaulted private loans.

From there, the Default Resolution Group tried to collect on your loans. When that failed, your loans were sent to a private collection agency.

If you’re wondering why the Department chose to send your student debt to Central Research, keep wondering. I have no clue.

What Are My Options for Getting My Student Loans Away from Central Research

The only option you have to get your student loans away from Central Research is to get your loans out of default.

You can get your loans out of default through the loan rehabilitation program or consolidation.

The loan rehabilitation program does not allow you to choose which student loan servicer your federal loans will go to. That decision will be made by the Department of Education.

A loan consolidation, on the other hand, does allow you to choose the new loan servicer.

So if you had a bad experience with your previous servicer before your loans were placed with Central Research, consolidation may be the right choice for you.

How to Stop a Wage Garnishment from Central Research

You have 5 options to stop an administrative wage garnishment from Central Research:

  1. Pay in full
  2. Negotiate a settlement
  3. Enter into the loan rehabilitation program
  4. Submit a consolidation application
  5. Set up a voluntary payment agreement

Let's breakdown each one.


Look, even if you can afford to pay your student loans in full, you shouldn’t do so. You’ll save more money by negotiating a settlement.

#2 Negotiate a Settlement

Being in default is the one-time you can settle federal student loan debt.

While a settlement sounds great, the reality is that many borrowers are unable to take advantage of a settlement offer.

Federal student loans do not settle for pennies on the dollar. Just the opposite.

With federal student loan settlements, you’ll need to have about 85% of the current balance less collection fees ready to pay in 30 to 90 days.

Does the government ever accept less than this for settlements? Occasionally. But those types of settlements have happened less frequently under the Department of Education Secretary Betsy DeVos.

#3 Loan Rehabilitation

The loan rehabilitation program is a one-time program that lets you stop a wage garnishment from starting by agreeing to make 9 monthly payments based on either your income or expenses.

Central Research rehabilitation agreement letter clause

Paragraph 12 of Central Research's Loan Rehabilitation Agreement Letter

The program also lets you stop a wage garnishment after it starts by agreeing to make 9 monthly payments. Under the terms of the program, the garnishment will stop after your 5th monthly payment. You’ll still need to make the 4 remaining payments before your loans are out of default.

Clause from rehabilitation agreement letter

Because the rehabilitation program is a one-time program, if you default a second time on the same loan, you will need to choose another option to get out default.

Confirm They Approved Your Rehabilitation Program Paperwork ⭐If you choose the loan rehabilitation program, make sure you sign the loan rehabilitation agreement letter and that you send it back to Central Research with your proof of income (if they ask for it). After you submit it, call to confirm they have received it. And then call again, to make sure you have been successfully approved for the rehabilitation program. I’ve had clients who told me they thought they were in the program and made several payments, only to find out they were never approved because their paperwork was missing or had been denied.

One benefit of the loan rehabilitation program versus loan consolidation is that with the former, the government will waive the collection fees after your 9th payment.

Consolidating a defaulted loan causes the collection fees and unpaid interest to be capitalized.

#4 Consolidation

A Direct Consolidation Loan allows you to combine your defaulted federal student loan with other student loans.

You’re eligible for consolidation if you have eligible federal student loans and you’re not under an active wage garnishment for your defaulted loans.

If Central Research has sent the garnishment notice to your employer but your wages have yet to be garnished, you’re considered to be under an active wage garnishment.

Related: Should You Consolidate Defaulted Federal Student Loans?

Having said that, I’ve helped borrowers who move quickly submit their consolidation application and have it successfully processed before their wages are garnished.

#5 Voluntary Repayment

Entering into a voluntary repayment plan before a garnishment starts will stop a garnishment from starting.

The repayment plan and none of the student loan payments, however, will get your loans out of default.

It will just keep your wages from being garnished.

Because this plan does not get your loans out of default, choose this option only if (a) you need more time to come up with money to settle; or (b) you’ve already rehabilitated your loans once before and you cannot consolidate out of default.

How to Contact Central Research Inc.

Central Research representatives are available from 8am - 5pm CST, Monday - Friday.

Central Research Inc.PO Box 1460Lowell AR 72745edadmin@central-research.com844-804-8467Fax: 870-498-8758central-research.com

Contact information is accurate as of December 12, 2019.

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