Loan Default Options

My Perkins loan is delinquent or in default.  What is the difference, and what can I do?

The following is a list of options for borrowers who are past due. Delinquent is generally 30 days or more past due. Default is more than 240 days (8 months) past due.   If your loan is 6 or more months past due, it may be accelerated and sent to a collection agency.  Acceleration means that the full balance of the loan has been legally called due and is payable immediately. Many of the options below apply to default or acceleration situations.  Loans are reported to the credit bureaus monthly by Heartland Campus Solutions ECSI (ECSI).

If you have a loan other than a Perkins loan, contact ECSI at 888-549-3274 to discuss the options that are available to you.  If your loan has been sent to a collection agency, you will be directed to contact the collection agency.  The collection agencies that the University of Iowa is contracted with are listed below.

Loan Consolidation

Student loan consolidation is a useful tool that can be used to combine existing federal student loans into a single loan with one monthly payment. University of Iowa institutional loans are not eligible for consolidation.  Consolidation is not for everyone.

Consolidation loans offer a fixed interest rate and the possibility for lower monthly payments by extending the repayment period. However, the interest rate may be slightly higher and borrowers normally pay more in interest over the life of the loan by extending the repayment period. Borrowers could also lose some benefits on existing loans by taking out a new consolidation loan that does not offer those same benefits.

Some things to consider before consolidating:

  • Some subsidized loans (not accruing interest in school or during most deferment periods) become unsubsidized (accrues interest from date of issue) when consolidated.
  • What deferment options are available before and after consolidation? 
  • Federal Perkins loans offer forgiveness provisions that may not be available under a consolidation program.

Borrowers should research and understand all of their options before making this important decision on whether to consolidate their loans. To determine if loan consolidation would benefit you, review the information provided at


Federal Regulations allow a Federal Perkins loan borrower to rehabilitate a defaulted loan. The borrower must request this. To rehabilitate, 9 consecutive monthly payments must be made on time (to be determined by the Billing & Loan Collection office). Once the loan is rehabilitated it will return to current status, restoring lost rights and benefits of the promissory note. Derogatory credit will be removed from the credit bureau. This is a good option if credit is of a concern to you.  The borrower may rehabilitate a loan ONE TIME ONLY.

If your loan is with a collection agency, contact the agency (see contact information below) to request a rehabilitation agreement.  If your loan is not with a collection agency, contact ECSI at 888-549-3274 to request a rehabilitation agreement.

Total/Permanent Disability

You may be eligible to cancel 100% of your loan. Apply at

Consequences of a Past Due Loan

  • Negative Credit Rating
  • A hold being placed on your student records
  • A debt owed to a state agency may be offset with your state tax refund
  • Ineligible for further financial aid
  • Your account may be turned over to a collection agency and you will be responsible to pay collection costs

The University of Iowa is contracted with the following collection agencies:

  • CBE Companies
    1309 Technology Parkway
    Cedar Falls, IA 50613
    Phone: 800-798-5156

  • General Revenue Corporation (GRC)
    PO Box 495999
    Cincinnati, OH  45249-5999
    Phone: 800-234-6258
  • Windham Professionals
    384 Main Street
    Salem, NH  03079
    Phone: 800-969-0059
  • Williams & Fudge, Inc.
    300 Chatham Avenue
    PO Box 11590
    Rock Hill, SC  29731
    Phone: 800-849-9791