According to the Federal Reserve, student loan debt has exploded since 2010 from $800 billion to $1.7 billion today. Student loans also come only second to mortgages in average balance size per person.
To make matters worse, about 10% of all student loan accounts for the most recent cohort are in default. Allowing a federal student loan to go into default can do a lot of damage to a borrower's credit and financial well being. And, unlike other loans, they are hard to get rid of in bankruptcy. Of course, sometimes the situation is out of your control.
The Department of Education (DE) recently contracted out some of its responsibilities, including collecting on defaulted student loans. F.H. Cann received one of those contracts. If your student loan has gone into default, you might have to deal with this servicer. In this article, we’ll discuss who F.H. Cann is and what it means if you're hearing from them.
Who Is F.H. Cann?
F.H. Cann & Associates (FHC) was established in 1999. It's based in North Andover, MA. The company specializes in "revenue recovery efforts." That’s just a fancy way of saying that FHC is a debt collector.
FHC supports a variety of government organizations and for-profit companies in the education, healthcare, financial, and utility sectors. In addition to loan servicing, it offers account receivables management and contact center outsourcing.
FHC does have a Better Business Bureau (BBB) profile with an A+ rating and 90 historical. Most of the complaints cite harassment (in the form of mail and phone calls) or not being able to speak with anyone about their student loans. Over the last 12 months, 33 complaints have been closed.
How Is FHC Associated With Student Loans?
F.C Cann received its first contract from the DOE in 2016 to service accounts that were in default. Recently, FHC and four other companies received new contracts from the Federal Student Aid office to be the only servicers in its soon-to-be-launched "Next Gen" environment.
This new contract could signal that F.H. Cann will receive more federal student loan servicing responsibility moving forward. But it's most likely that it will continue to service defaulted accounts. In fact, once the new contracts take effect, FHC may become the exclusive federal servicer for student loans in default.
What To Do If FHC Contacts You
If FHC contacts you, one of the first things you’ll likely want to do is get debt validation from FHC. This will verify if they, in fact, have the right person and correct amount of debt. You are entitled to request debt verification.
If FHC decides not to comply, you are no longer responsible for the debt, and any marks on your credit reports (from the three main credit bureaus) must be removed. You’ll want to speak with an attorney to be sure all of the right steps are followed.
How To Handle Student Loans In Default
If FHC is contacting you, it’s likely because your student loans have gone into default. This happens after a student loan has been past due for 270 consecutive days. At this point, the loan is turned over to a collections agency, which tries to recover the loan. Note that a defaulted loan is due in full. Because the loan is now due, it will incur penalties as well, which only compounds the problem.
As mentioned above, federal student loans are some of the worst loans to let go into default. First, collectors will try to voluntarily collect payment from you. This is part of the rehabilitation program. But if that fails, they will seek involuntary payment options, which include federal and state tax refund offsets, wage garnishments, and Social Security benefits offset.
If you have a student loan in default, it can be rehabilitated. The rehabilitation program works by making nine consecutive payments for ten months. After that, the loan default is removed from your credit report. If your wages are being garnished, that will stop after five payments. Note that the rehabilitation program is only available once per loan.
If your loans aren't in default yet, there are other ways to get student loan relief. For example, borrowers can join an Income-Driven Repayment (IDR) plan. Or if you need to temporarily stop making payments altogether, you may be able to apply for a hardship forbearance or deferment period.
How To Contact F.H. Cann Customer Service
You can reach out to F.H. Cann customer service through the following:
Phone number: (877) 677-9131
Hours of operation: 8-5 Mon-Fri (ET)
General mailing address:
1600 Osgood Street
North Andover, MA 01845
Address for sending payments:
U.S. Department of Education
National Payment Center
P.O. Box 790336
St. Louis, MO 63179-0336
Email/online contact form: EDComplaint@fhcann.com ; Contact form
F.H. Cann is a debt collector on defaulted student loans. Steering clear of FHC altogether by taking steps to avoid default is your best option. But if FHC is contacting, it’s best not to ignore them, even if you feel like you can't make payments right now.
Try going back to your original loan servicer and download any records that might be available. You'll also want to begin documenting all contact with FHC for your records. Finally, try to take advantage of the student loan rehabilitation program to get your loans out of default and back on track.
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.