Professional Bureau of Collections of Maryland (PBCM) is a private debt collection agency hired by the Department of Education to collect defaulted student loan debt. While PBCM didn't buy your loans for pennies on the dollar, it does have the power to garnish your wages without first taking you to court.
Sending debt validation letters to PBCM won't stop them from collecting from you. Student loan collections operate differently from credit card debt or personal loans. Here's what you need to know to get your student loans away from PBCM and back into good standing.
COVID-19 Emergency/Coronavirus Freeze
The federal government has suspended collections on defaulted student loans owned by the Department of Education through September 30, 2021.
Suspended collection activities include:
- wage garnishment
- tax refund offset and
- Social Security offset
In addition to suspending collections, the Department will also cover the payments you're supposed to make under your loan rehab agreement.
However, the student loan pause does not include removal from CAIVRS. So if you're trying to close on a home using an FHA mortgage, you need to get out of default.
What is PBCM?
The Professional Bureau of Collections of Maryland (PBCM) is a debt collection agency. They are also a full-service accounts receivable management company. They handle 1st party collections and 3rd party collections for credit unions, healthcare organizations, and other portfolios.
The PBCM mission is to provide the highest compliance, competitive returns, and "unparalleled customer service." However, looking at their customer reviews, plenty of student loan borrowers would disagree with that last part.
Weirdly, PBCM isn't located in Maryland. Instead, they are headquartered in Denver, Colorado.
PBCM did not buy your federal student loan debt
PBCM did not buy your federal student loans from the US Department of Education.
Instead, the Department hired PBCM to be the debt collector for defaulted federal student loans.
You have to deal with PBCM to get out of default. You can't force your defaulted student loans to be moved to a different collection agency. You're stuck working with PBCM.
Once you're out of default and back in good standing, your loans will return to a regular loan servicer.
How to stop a wage garnishment from PBCM
The federal government authorizes private collection agencies like PBCM to use administrative wage garnishment orders to collect from borrowers in default on federal student loans.
Before a student loan wage garnishment starts, you have four options to the garnishment from starting:
- negotiating a settlement
- applying for a new Direct Consolidation Loan
- entering into the loan rehabilitation program
- entering into a loan repayment program
However, after the garnishment has already started, you have only three options to stop it:
- negotiating a student loan settlement
- entering into the loan rehabilitation program
- filing bankruptcy
Negotiating a student loan settlement is an option. In fact, a settlement is the only time you can get some of the capitalized interest and collection fees waived. But depending on your balance, federal student loan settlements can be expensive. Under the current Department of Education guidelines, your settlement will be for about 85-90% of the current balance.
Given the high settlement cost, most student loan borrowers use loan consolidation or the loan rehabilitation program to get out of default.
Consolidation gets you out of default by consolidating one loan with another loan to create a brand new loan.
The loan rehabilitation program gets you out of default by requiring you to make 9 monthly payments of an amount approved by the Department of Education.
Bankruptcy will stop a wage garnishment from the Professional Bureau of Collections of Maryland. But it will not bring your loans back into good standing or discharge your student loan debt. You'll need to file an adversary proceeding to get rid of your student loans in bankruptcy.
Consolidation: How your monthly payment is calculated
When you consolidate a student loan that's in default, you'll have to agree to pay your loans under one of the income-driven repayment plans:
- Revised Pay As You Earn
- Income-Based Repayment
- Pay As You Earn
- Income-Contingent Repayment
Your monthly payment under an IDR plan is based on your family size and adjusted gross income. You can estimate your monthly payment by using the Federal Student Aid's Loan Simulator at studentaid.gov.
Loan Rehabilitation: How your monthly payment is calculated
Under the loan rehabilitation program, your monthly payment is first calculated using the adjusted gross income and number of dependents on your federal tax return.
The representative will ask if you can afford that payment.
If you can afford the payment, the inquiry ends there, and the rep will send you a loan rehabilitation agreement letter to sign and return.
But what happens if you can't afford the initial payment you're offered? In that case, you can get a monthly payment as low as $5. You may be able to get a lower payment by providing your current monthly income and expenses and your current family size, which may be more or less than the number of dependents you claimed on your tax return.
The PBCM representative will use the information you provided to complete the Loan Rehabilitation Income and Expense Form.
Most of my clients who go through this process end up paying less than $100 per month.
And that includes my clients who earn over $100 thousand per year.
PBCM contact information
- PBCM phone number: (844) 225-5501
- Fax number: (303) 488-2505
- Mailing address: Professional Bureau of Collections of Maryland Inc., 5295 DTC Parkway, Greenwood Village, CO 80111
- Web: www.pbccorp.com
How to file a complaint against PBCM
As a debt collector, PBCM is not allowed to, among other things, make harassing phone calls to you, lie to you about your options, etc.
If that happens, they may have violated the Fair Debt Collection Practices Act.
And if that happens, you can file a complaint with the Consumer Financial Protection Bureau.
You could also hire an FDCPA law firm to sue them for damages.
Want help with the Professional Bureau of Collections of Maryland?
Dealing with a debt collector is never fun. It can be completely intimidating. They seem to have all the power, and they don't seem interested in helping you clean up a mess you didn't try to make.
Schedule a free 10-minute call with me today. Let's work together to get a game plan to tackle this problem in a way that fits your current situation and your future goals.