September 13, 1999
Honorable Martin Olav Sabo
Thank you for contacting me regarding letters used by private collection agencies working on our behalf to recover defaulted student loans.
In the past we found that debtors hesitated to deal with our private collection agencies because they questioned the authority of the private collection agency to represent the Department. To remove this confusion, we required contractors to use form letters that prominently displayed the legend "U.S. Department of Education," as well as explaining that the letter was sent from the contractor. We have determined that the need for this practice no longer exists, and we have discontinued the requirement. Since June 30 of this year, the form letters sent by all private collection agencies working on our behalf have been changed to remove this legend.
This change in our practice should eliminate any confusion that may exist with regard to the source of correspondence generated by private collection agencies. I agree that there should be no ambiguity in this area.
Thank you again for your interest in this matter, and I hope that this response completely addresses your concern.
Richard W. Riley
Our mission is to ensure equal access to education and to promote educational excellence throughout the Nation.
[ Return to Key Policy Letters ]
This page last updated September 14, 1999 (pjk)