Guarantor. After you default on a Federal Family Education Loan Program loan, your guarantor reimburses your lender for 97 percent of the default amount. The guarantor now owns your loan and will attempt to collect payments from you. USA Funds^® is the guarantor for many loans that were made through the Federal Family Education Loan Program.

Collection agencies. Many guarantors and the U.S. Department of Education contract with private collection vendors to collect defaulted loans. Your account may be assigned to one of these collectors.

U.S. Department of Education. If your guarantor is unable to collect from you, your loans may be assigned to the U.S. Department of Education, which will continue to pursue payment from you.