The Default Resolution Group Letter (Why You Got It and What to Do Now)

Quick Facts

• The Default Resolution Group works directly for the U.S. Department of EducationU.S. Department of Education (ED)The federal agency that oversees federal student aid programs, issues regulations for federal student loans, and is the ultimate lender on Direct Loans.. They're in charge of collecting defaulted federal student loans.
  • If you got a defaultDefaultThe status of a federal student loan after the borrower has failed to make required payments for 270 days. Default can trigger collection actions such as wage garnishment, tax refund offset, and damage to credit reports. resolution letter from the DRG, your student loan has defaulted, and collections will start soon. So you need to act fast.
  • You can fix it through loan rehabilitation (9 monthly payments) or loan consolidation (faster, but resets IDR forgivenessIDR ForgivenessThe forgiveness of any remaining federal student loan balance after a borrower has completed 20 or 25 years of qualifying payments under an income-driven repayment plan, depending on the specific plan. progress).

Overview

The Default Resolution GroupDefault Resolution GroupThe office within Federal Student Aid that manages defaulted federal student loans, including collection activity, rehabilitation, and consolidation of defaulted debt. (DRG) collects defaulted federal student loans for the U.S. Department of Education (ED). If you got a letter from them, it means your loans are in default (i.e., you've missed at least 270 days of payments) and collections are about to get serious. Wage garnishment, tax refund seizure, and credit damage are all on the table. But you still have options. You can stop collections by getting out of default through rehabilitationRehabilitationA federal program for borrowers in default that requires nine voluntary, on-time monthly payments over ten months. After rehabilitation, the default is removed from credit reports and federal aid eligibility is restored. It is available once per loan. or consolidation. The sooner you act, the more control you keep. Here’s exactly what the DRG letter means and what to do next to protect your money.

What Is the Default Resolution Group?

The Default Resolution Group is a collections unit that works for the ED. Their job is to collect defaulted federal student loans, including Direct Loans, Federal Family Education Loans, and Perkins Loans. They’re not a loan servicerLoan ServicerThe company that manages a borrower's federal student loan account, processes payments, and handles applications for repayment plans, deferment, forbearance, and forgiveness on behalf of the U.S. Department of Education.. You might’ve dealt with MOHELA, Nelnet, or AidvantageAidvantageA federal student loan servicer operated by Maximus that manages Direct Loan accounts on behalf of the U.S. Department of Education, including many accounts previously serviced by Navient. before, but once your loan hits 270+ days past due, it gets kicked to DRG. That’s when things escalate. The Department of Education's Default Resolution Group handles the enforcement side of the student loan collections system. Their job is to track down defaulted student loan holders, send collection letters, and coordinate wage garnishment or tax refund offsets after a judgment.

Why You Got a Letter from the Default Resolution Group

Receiving a letter from the DRG means your federal student loan has moved from simply being delinquent to officially defaulted. Related: Student Loan Delinquency vs Default Once that happens, the U.S. Department of Education labels your loan “in default” and hands your account to the DRG. The default resolution letter is a warning and a collection notice. It means:

• The government wants the full loan balance back
• You’re now at risk of wage garnishment or losing your tax refund

You still have one last shot to fix this through rehabilitation or consolidation Collections resumed on May 5, 2025, after the pandemic pause. That means the DRG is now actively collecting defaulted loans again. If you’ve been holding off or are unsure what to do, now’s the time to act.

What to Do After Getting a Default Resolution Letter

Once the DRG contacts you, you only have enough time to get your federal student loan out of default. Here’s what to do next:

1. Verify Your Default Status: If this is the first time you’re hearing about a default, don’t assume the letter is accurate. Log in to the Federal Student Aid (FSAFederal Student Aid (FSA)The office within the U.S. Department of Education that manages federal grants, work-study, and student loans. It runs the FAFSA, the StudentAid.gov website, and oversees the federal loan servicers.) website and check your loan status. If your loan shows as “in default,” the letter is legit. If not, call the DRG and ask for details. They’re listed under the U.S. Department of Education’s Default Management division.
2. Ask AboutLoan Rehabilitation: Rehabilitation lets you get out of default by making nine on-time, income-based payments. These are usually affordable. After the ninth payment, your default status is removed from your credit report, and collections stop.
3. See If You CanConsolidate Instead: Consolidation is faster. You apply for a Direct Consolidation Loan and agree to repay under an income-driven repayment plan (IDRIncome-Driven Repayment (IDR)A category of federal student loan repayment plans that calculate monthly payments based on income and family size rather than loan balance. Any remaining balance can be forgiven after 20–25 years of qualifying payments.). It gets you out of default in weeks, and collections stop once the new loan is processed.

Both rehabilitation and consolidation stop collections and restore your eligibility for federal aid. Plus, they restore your eligibility for income-driven repayment plans and student loan forgiveness programs. For example, once you're back in good standing, you can enroll in the Income-Based RepaymentIncome-Based Repayment (IBR)A federal income-driven repayment plan that caps monthly payments at 10% or 15% of discretionary income, depending on when the loans were taken out. Remaining debt is forgiven after 20 or 25 years of qualifying payments. Plan and then access federal loan forgiveness programs like PSLFPublic Service Loan Forgiveness (PSLF)A federal program that forgives the remaining balance on Direct Loans after 120 qualifying monthly payments made while working full-time for a government or qualifying nonprofit employer. or IDR forgiveness again. Related: Student Loan Rehabilitation vs. Consolidation As of May 5, 2025, the government restarted student loan collections. That means wage garnishment, tax refund offsets, and Social Security withholding are all active again. If you don’t respond, the DRG can (and will) move forward. Note: The Fresh StartFresh StartA temporary federal initiative that allowed borrowers with defaulted federal student loans to return to good standing with a simple opt-in, restoring eligibility for aid and income-driven repayment. The enrollment period ended in 2024. Program ended in 2025. So now, the best way to get out of default quickly and avoid the consequences of default is by applying for a Direct Consolidation Loan.

How to Contact the Default Resolution Group

If you got a letter or need to take action on your defaulted federal loan, you’ll need to contact the DRG directly. Here’s how to reach their customer service representative: Default Resolution Group Hours & Contact Information

• Phone: 1-800-621-3115 (for teletypewriter or TTY: 1-877-825-9923)
• Hours: Monday–Friday, 8 a.m. to 8 p.m. Eastern Time
• Mailing Address: Default Resolution Group, P.O. Box 5609, Greenville, TX 75403
• Fax: 1-903-454-3893

When you call, you'll need to verify your identity. Have your Social Security number ready. Ask for a breakdown of the debt, your current options (rehabilitation or consolidation), and what steps to take next. Be ready to take notes or request a follow-up in writing. If the line is busy, try calling early in the morning or later in the afternoon. Don’t wait days to call again. Collections won’t pause just because you couldn’t get through.

What Happens If You Ignore the Letter

Ignoring a default resolution letter will only make things worse. Here’s what happens if you don’t act:

• Wage Garnishment: The government can take money directly from your paycheck without taking you to court. You won’t get a hearing first. They just notify your employer and start pulling 15% of your disposable income.
• Tax Refund Seizure: Your entire federal tax refund can be taken and applied to your defaulted loan. If you file jointly, your spouse’s portion can be taken, too, unless they file an injured spouse claim.
• Social Security Offsets: If you’re receiving Social Security benefits, a chunk can be withheld every month to pay off your loan, even if you rely on that income to survive.
• Long-term Credit Damage: A federal student loan default stays on your credit report for 7 years. That means higher interest rates, denied loan applications, and limited housing options.
• No New Federal Student Aid: You won’t qualify for new federal student aid until your default is resolved. That includes FAFSA grants, loans, financial aid, or work-study programs.

The collections system is built to act fast, with or without you. Responding to that letter is the only way to protect your income, your credit, and your future options.

Bottom Line

Getting a letter from the DRG means your loan is already in default, and the government is ready to collect soon. But default doesn’t have to be the end of the road. You still can rehabilitate or consolidate your loan to get it out of default and stop garnishment. We're here to help you take the next step before things get worse. Book a call with our student loan expert today. We help borrowers resolve default and clear their student loan debt with personalized, expert guidance. Related reading:

• Private Student Loan Default
• Can Student Loans Take Your House?
• Can Student Loans in Default Be Forgiven?
• What is a Delinquent Student Loan?
• Is It Too Late to Address a Student Loan Defaulted 20 Years Ago?