How to Dispute Student Loans in Collections: A Step-by-Step Guide

Updated on June 2, 2025

Quick Facts

You can dispute student loans in collections, but the process depends on whether your loan is federal or private.
A valid dispute needs more than frustration. Student loan borrowers will need proof of error, fraud, or illegal collection activity.
If the collector ignores you or denies your claim, you can escalate to oversight agencies or take legal action.

Overview

If your student loans have landed in collections, you’re probably feeling blindsided and overwhelmed. As of May 2025, wage garnishments, tax refund seizures, and frozen bank accounts are back, making matters even worse.

You still have rights, though. And one of your most powerful tools is disputing the debt itself.

This article specifically covers how to dispute student loans already in collections—debts being pursued by collection agencies or debt buyers.

(For issues involving incorrect credit reporting, see our guide on How to Dispute Student Loans on Credit Reports. If your loan isn’t in collections yet, check out How to Dispute Student Loans.)

Whether your balance seems inflated, the collector crossed legal lines, or your loan never should’ve defaulted in the first place, you can take immediate action to challenge it. Often, filing a dispute can pause aggressive collection actions while your claim gets reviewed.

This guide walks you step-by-step through the most common dispute scenarios, empowering you to stand your ground confidently.

Confirm Whether Your Loan is Federal or Private

Most borrowers facing collections have federal student loans, but yours might be private, and that difference matters.

If your loan is federal, you’ll start by disputing directly with the collection agency the Education Department assigned to your loan, typically the Default Resolution Group. If that doesn’t help, you can escalate your complaint to a government office called the FSA Ombudsman, which handles federal student loan issues.

But if your loan is private (from a bank or company like Sallie Mae or SoFi), the process is different.

You’ll typically dispute your debt by sending a written request, called a debt verification letter, directly to the collection agency. If that doesn’t resolve things, you may consider filing a complaint with a consumer protection agency, such as your state’s student loan ombudsperson or attorney general, or the Consumer Financial Protection Bureau (CFPB), which helps borrowers deal with unfair debt collection practices.

How to Dispute Student Loans in Collections

Disputing student loans with a debt collection agency involves five steps:

Step 1: Clearly Identify the Reason for Your Dispute

Not every frustration or issue with your student loans will qualify as a valid dispute. Common valid reasons to dispute include:

Incorrect loan balance (the amount seems wrong or inflated)
Fraud or identity theft (someone took out loans in your name)
Improper default (you defaulted without proper notice or while payments were current)
School closure or fraud (your school shut down or defrauded you, and you qualify for discharge)
Improper collection actions (collector harassment or abuse)

Clearly pinpointing your dispute reason makes the process faster and your claim stronger.

Step 2: Gather Evidence to Support Your Dispute

Before you dispute, assemble supporting documents to prove your case. This typically includes:

Loan statements or payment histories
Enrollment records (especially if disputing due to school closure or fraud)
Copies of letters, emails, or notices from servicers or collectors
Police reports or FTC identity-theft affidavits for fraud cases

Clear documentation significantly strengthens your dispute and increases your chances of a positive outcome.

Step 3: Submit Your Dispute in Writing

Always dispute in writing to establish a paper trail. Keep your letter clear, concise, and professional, outlining the specific issue and including evidence where possible. (You can use our sample student loan dispute letter as a starting point.)

Where to send your dispute:

Federal Loans: Submit your dispute to your current federal loan servicer or the assigned federal collection agency. If they’re unresponsive or your issue isn’t resolved, escalate directly to the FSA Ombudsman.
Private Loans: Send your dispute directly to the collection agency handling your debt. Additionally, if you live in a state with a Student Loan Borrower Bill of Rights (like California), you can submit what’s known as a Qualified Written Request (QWR). A QWR compels the servicer or collector to provide specific documents and respond within set timelines. If they fail to respond adequately, you may have the right to legal action or damages. (Learn more about Qualified Written Requests here.)

Step 4: Track and Follow Up on Your Dispute

After submitting your dispute, closely track the status. Collectors typically have 30 days to respond (federal servicers may have different timelines depending on your issue). Mark this deadline clearly, and if they fail to respond, send a follow-up letter documenting their lack of response.

Always keep detailed records—copies of your letters, postal receipts, and their responses (or lack thereof). This documentation could prove invaluable if your dispute escalates further.

Step 5: Escalate Your Dispute If Ignored or Denied

If your initial dispute is ignored or improperly denied, you have the right to escalate. Here’s how:

Federal Loans: Escalate unresolved issues first to the FSA Ombudsman. If still unresolved, your next step could involve filing a formal complaint with the U.S. Department of Education.
Private Loans: File a complaint with the Consumer Financial Protection Bureau (CFPB), your state’s student loan ombudsperson, or your state attorney general. If your servicer or collector violated collection laws (FDCPA/FCRA), you may also consider legal action to enforce your rights.

Bottom Line

Filing a dispute is important, but it’s not enough on its own. Collectors don’t always follow the rules, and borrowers often get trapped in back-and-forth delays or denied without explanation. What matters is knowing how to respond, what to push for, and how to stay one step ahead.

That’s where we come in.

We help borrowers figure out what’s behind the collections notice, build the right case, and take action that leads to real results. Whether you’re trying to stop a garnishment, challenge a debt in court, or get a discharge approved, we’ll walk you through it.

Book a call with our student loan expert.

We’ll review your situation and give you a clear, realistic plan for what to do next.

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