When you take out federal student loans, the U.S. Department of Education is your lender. The Department pairs you with another company — a loan servicer — that handles your payments, answers questions about your student loan debt, and changes your repayment plan, if necessary. When you miss more than 270 days of payments, your loans default. And when that happens, your account is moved to a collection agency like National Credit Services, Inc. (NCS).
If your defaulted student loans have been placed with National Credit Services, here's what you need to know about the debt collection agency.
What is National Credit Services, Inc.
National Credit Services is a private debt collector hired by the Department of Education to handle federal loans in default. Since 2016, the company has been awarded $169.9 million for its collection activities. NCS's contract is set to expire September 2024.
Is National Credit Services legit? National Credit Services is a legitimate collection specialist for the U.S. Department of Education. Although the company is not accredited with the Better Business Bureau or your original creditor, it is not a scam.
What Can National Credit Services Help You With?
If NCS is assigned your defaulted student loans, you can contact the company about the following repayment options:
- Settlement: is the only option to save collection fees and reduce some of the accrued interest on defaulted loans. Many federal student loan settlements save the borrower about 10-15% of the current loan balance. But that doesn't stop you from offering half of the total amount as a settlement.
- Loan Consolidation: allows you to get out of default fast. You do not need good credit to qualify. Your credit score won't be checked in the application process. Instead, you're eligible to get a Direct Consolidation Loan if you're not under an active administrative wage garnishment and you have at least two loans to include in the application.
- Loan Rehabilitation Program: gets you out of default, qualifies you for new financial aid, and allows you to clear CAIVRS after making 9 payments in 10 months. This program also stops wage garnishment after you make your fifth payment.
- Voluntary Repayment: does not get you out of default. Choose this option only if you're not eligible for consolidation or rehabilitation. Setting up monthly payments can stop your wages from being garnished and tax refund from Treasury Offset.
Can you remove National Credit Services from a credit report? A collection account can be removed from a credit report when the information is inaccurate. If NCS is contacting you about a defaulted federal student loan, sending a debt validation letter is typically a waste of time. Even if you don't get a response, you still owe the loan to the Department of Education. The credit bureaus will keep reporting the negative information.
What NCS Can't Help You With
Until you get your loans back into good standing, you're ineligible for:
- income-driven repayment plans
- deferment and forbearance
- new financial aid
- student loan forgiveness programs
- FHA mortgage
National Credit Services Rehabilitation Program
National Credit Services helps borrowers bring defaulted Federal Family Education Loans (FFEL) and Direct Loans back into good standing with the student loan rehabilitation program. Under this program, the loan holder (US Department of Education) allows borrowers to make 9 monthly payments within a 10 month period. The payment amount is based on your adjusted gross income or monthly income, expenses, and family size.
You're eligible for the Loan Rehabilitation Program if you have not previously completed it for the loan in default.
To fully enroll in the program you must:
- Complete and submit the Financial Information Statement with proof of income (tax return or pay stub)
- Sign the Loan Rehabilitation Agreement Letter
- Make 9 monthly payments within 20 days of the due date.
Once you complete the program, the default status will be removed from your credit report (the late payment history will remain) and your loans will be sent to a new loan servicer. You will need to set up a payment plan with the servicer.
How to Make Student Loan Payments With National Credit Services
You can make payments in the following ways:
- Phone: NCS customer representatives can take payments using a debit card. You can set up the payments by calling the company at its phone number, 800 324-7564.
- Mail: You can mail payments for Department of Education Loans to National Payment Center, P.O. Box 790336, St Louis MO 63179-0336.
- Online: For Department of Education held loans, you can make payments at myeddebt.ed.gov.
To start making payments online, follow these three simple steps:
- Create an account on MyEdDebt. To sign up for an account, click on "Borrower/Student" and "Create Account". The site will prompt you to enter your Social Security Number, Date of Birth, email, etc.
- Add a U.S.-based debit card. Once your account has been activated, you can make a one-time payment. The system doesn't accept credit cards or cards from foreign banks.
About National Credit Services, Inc.
NCS was founded in 1995 and is registered in Bothell Washington. The company's main office is at 2525 220th St SE, Bothell, Washington 9802. NCS provides collection services for health care, higher education, and financial institutions.
Contact Information for National Credit Services
You can contact NCS's customer service representatives by phone by calling 888-253-4239. The call center is open Monday through Friday 8 am to 5 pm PST.
You can send general correspondence to its mailing address: 2525 220th St SE, Suite 200 Bothell, WA 98021-4440.
How to Complain About National Credit Services
If you're having difficulty with National Credit Services that you've been unable to resolve, start by filing a complaint directly with the Default Resolution Group. It oversees the collection process. Call 800-621-3115.
Another option is to file a complaint with the Federal Student Aid Feedback Center.
You can also file a complaint with the Department of Education's highest customer service office, the FSA Ombudsman. Call 877-557-2575.
If your issue goes unresolved, you can also make complaints about NCS to:
- the Consumer Financial Protection Bureau (CFPB)
- the Better Business Bureau (BBB)
- your congressional representative
- your state attorney general's office
Lastly, because NCS is a debt collector, the company must adhere to the Fair Debt Collection Practices Act and other consumer rights laws (e.g., no harassing phone calls. no use of obscene language or communicating false information, etc.). Contact an FDCPA attorney/law firm near you to learn if you can take legal action.
Need help with National Credit Services? Let's talk
If you want to go over your options, schedule a free 10-minute phone call with me. I've got years of experience helping people like you get their federal student loans out of default.
Let's talk. I can help you find a way to bring your loans into good standing while saving the most money and preserving your eligibility for loan forgiveness.