Depending upon the terms of your loan if you miss one or more payments on your loan and you do not have a deferment or forbearance, your loan may be considered in default. This may happen before or after it is transferred for collection or sold to another lender. Regardless of when it happens, however, your loan will usually go to the following places.
First, your loan will be sold to the state or private guaranty agency that acts as the middle man for your loan. If there was no state or private guaranty agency for your loan, it will usually be sold directly to the United States Department of Education.
Second, the guaranty agency may transfer for collection or sell (see above) your loan to the United States Department of Education. Similarly, the United States Department of Education may transfer for collection or sell your loan to the state guaranty agency. This can go back and forth several times.
Third, as if that weren't confusing enough, either the guaranty agency or the United States Department of Education can transfer your loan for collection to a servicing company. Often, the United States Department of Education and guaranty agencies use the same servicing companies, so you might receive notices from the same servicing company about different loans.
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