Collection Agencies

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An organization that specializes in debt collection is known as a collection agency or debt collector. Most collection agencies operate as agents of creditors and collect debts for a fee or percentage of the total amount owed.

There are many types of collection agencies. First-party agencies are often subsidiaries of the original company the debt is owed to. Third-party agencies are separate companies contracted by a company to collect debts on their behalf for a fee. Debt buyers purchase the debt at a percentage of its value, then attempt to collect it.

The Department of Education contracts with collection agencies to administer certain collection activities. According to the Department, only those accounts that fail to establish and adhere to a repayment arrangement are subject to assignment to a collection agency. The list of collection agencies is posted on the Department’s website and is current as of October 2014. The list is also available online at: