Student Loan Law: 18.2.3.1 Violations Unique to Federal Student Loans
A number of collection violations relate to the unique ways that federal loans can be collected—administrative wage garnishments, tax refund intercepts, and government benefit offsets. Dunning letters threatening that the Department will garnish borrower wages without “legal action” may violate the FDCPA.70 These letters imply that the former student will receive no notice before the wage garnishment and that there will be no opportunity to either contest the validity of the student loan or to present defenses.