Guarantor
After you default on a federal student 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 a guarantor.

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 Debt Collection Service of the U.S. Department of Education, which will continue to pursue payment from you.