Q: How to get out of student loan default with Conserve Debt Collection Agency?

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Did you get a notice from ConServe that you’re in federal student loan default? Then you likely have questions.

In this post, I’ll answer those questions. Plus, I’ll share the forms you may come across when trying to get your loans out of default.

Let’s go.

Who is ConServe

ConServe is the business name of Continental Service Group Inc., which was formed in New York back in 1985.

Their main business is debt collections/accounts receivable management

The main clients they provide debt collector services for are private businesses, the IRS, and the Department of Education.

Because Conserve is a debt collector, they are subject to the Fair Debt Collection Practices Act. The FDCPA provides consumer protection laws that if violated could cause ConServe to have to pay you for each violation. Speak with an FDCPA lawyer to see if you have a claim.

What does ConServe have to do with my federal student loans?

ConServe is one of the private collection agencies hired by the Department of Education to collect defaulted federal student loans.

Your federal student loans go into default not when you miss a payment — but after you miss 9 months of payments.

The main way they’ll try and collect from you is by using an administrative wage garnishment. By law, they can garnish up to 15% of your wages. And they can do it without a court order.

ConServe may also report negative information to the credit reporting bureaus. Getting that information removed is difficult but doable.

Related: When Student Loans Are Killing Your Credit Score: A Guide [2019]

Another way they’ll try and collect from you is by asking if you want to settle. Because you’re in default on a federal student loan, settlement is an option but the terms aren’t that great. Typically, they’ll waive collection costs if you agree to pay the balance within 30 to 90 days.

Related: Here's What to do When Credit Adjustments Inc. Has Your Student Loans

For most people, that’s unrealistic. But it’s an option.

ConServe contact information

You can contact ConServe by calling them at 866-633-7945.

You can also visit their website at www.conserve-arm.com.

Conserve-arm homepage

And you may also be able to contact them at either this mailing address:

Continental Service Group Inc. dba ConServeP.O. Box 457Fairport, NY 14450-0457Or this mailing address:200 CrossKeys Office ParkFairport, NY 14450Or by email at correspondence@conserve-arm.com.

What to say when speaking with a ConServe rep

Your main goal is probably to stop the garnishment. If that’s true, then ask them what your options for doing that are.

Here’s what they should tell you:

  • You can request a hearing;
  • You can set up voluntary payment arrangements (unless they’re part of a rehab agreement, these payments won’t get you out of default);
  • You can enter into a rehabilitation agreement (this is where you make 9 monthly payments of as low as $5);
  • You can pay the balance in full; and
  • You can settle for less than you owe if you can come up with a lump sum in a short time.

If you’re looking to set up a payment arrangement, rehab or otherwise, grab a copy of your tax return and a recent pay stub. The ConServe rep should use that information to calculate your monthly payment.

FYI, since ConServe is a third-party collection agency, you have the right to not provide them with your phone number. You also have the right to instruct them not to call you at certain phone numbers.

Here are a few of the forms they may have you complete:

Can ConServe charge me a collections fee?

Here’s the thing about defaulting on federal student loans:

It’s expensive.

As of 2014, the Department’s policy is to charge up to 25% of outstanding principal and interest as collection fees. That means if your balance is $100 thousand. Your new balance after defaulting could be as high as $125 thousand.

Related: Do Student Loans Affect Credit Scores? Absolutely

Supposedly, as of 2016, this has changed. In a post titled Loan Servicing and Collection - Frequently Asked Questions, the Department indicated that once you successfully complete a rehabilitation, only your principal and interest will be transferred to the new servicer.

conserve collection fees student loans.jpg

So what does this mean about the “up to 25%”?

As it stands, the Department of Education has been waiving collection costs after the first successful rehabilitation.

What are the reviews for the ConServe debt collection agency?

To be fair, the nature of being a collections agency business lends itself to negative reviews. So the fact that the BBB has 92 reviews for ConServe isn’t surprising.

ConServe's job isn't to be friendly; it's to collect on student loan debt (and other debt).

Most of the reviews come down to either miscommunication or alleged poor handling of paperwork. For example, check out this review of ConServe:

conserve debt collection agency.jpg

Frustrating, right?

Situations like these are where it’s helpful to hire a student loan lawyer.

In the absence of getting professional help, try submitting a complaint to the Consumer Financial Protection Bureau. The CFPB is responsible for fielding complaints about companies providing collection services.

Final thoughts

Dealing with ConServe debt collection agency for a defaulted federal student loans can be difficult. But if you prepare in advance, you should be fine.

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