My original loan was for $5,200 and it defaulted in 1985. With interest it is about $10,000 now, with penalties about $12,000. DCS got my account about a year ago but they have not found me yet. My question is how do i go about negotiating a payment in full sans penalties with the DOE. DCS has a long history of deceit and dificulty and of course their fee is based in no small part on the penalties. Is there any way to negotiate with the DOE directly or do the debt collectors "own" the account once DOE deputizes them?

You have to keep in mind that the collection agency only gets about 9% of the 18.5 collection fee. The DOE gets the rest of the collection fees to offset the cost of maintaining your default.

Once your account is assingment to an agency, you must work with the specific agency. Calling the DOE will have you forwarded directly to DCS. It is unlikely that they will negate 100% of the collection fees. 50% is possible. They may refer to your agreement to pay "all collection costs applicable by law" on your loan docs. The 18.5% has been the going rate for collection costs for years so it is not a figure that the collection agencies make up.

Thanks Lynn,
I appreciate your response. I have one more question. For 2 years (in the late nineties) my wages were garnished at the rate of 300/month prior to the assignment to the CA, but i do not see that accounted for anywhere on my loan statement. How do i get a copy of all payments made on my account so i can speak with the CA with all the facts in hand?

this company now has a hand on my student loan as well...please let me know what your outcome is with DCS and what tactics you used to have them work with you. what they are offering me is far from acceptable or reasonable so i'm at a bind as to what to do...

thanks for your help!