@Sabii wrote: How long ago was this? At some point the Dept of Education made the decision to no longer service student loans themselves. Hence why everyone deals with the contractors, the loan servicer's. D of Ed couldn't be bothered. Similarly, I'm pretty sure when you default it will eventually get sent to a collection company or companies to collect. You said the Feds arranged something with her. If I'm not mistaken, today it would be the collection agency. If they had started the wage garnishment procedures, nothing can stop it short of rehabbing or consolidation.
Sabii, The timeline on my original post was incorrect. It wasn't a 15 year old SL, it was about 15 years since her last payment when her wages were garnished. The loan originated in the early 70's, she defaulted in the late 70's and her wages were garnished about 1992. Soon after her employer received the garnishment order, she contacted the US Dept of Treasury and her monthly payment plan was negotiated. I didn't mean to infer anything else and I apologize to anyone who read my post. I wanted to point out that the feds have garnished wages even for old SLs. I'll have to ask her if any collection agencies contacted her ( could be as she did have a +120 on her CBs) or if it was just the IRS and Dept of Treasury.