My private student loan disappeared, so I thought it was forgiven — now a debt collector is after me. Am I in trouble?

Private lenders weren't required to follow the same forbearance rules as the U.S. Department of Education during the pandemic, though some did (2). The different rules not only between the government and private lenders but between private lenders themselves has left many Americans confused.

One Redditor with a private loan with Navient posted that they had defaulted on their payments in 2008 but subsequently set up automatic loan payments with their bank to prevent any future defaults.

The auto-withdrawals continued into the COVID-19 pandemic, then "suddenly stopped," leaving the Redditor — milkmanrichie — assuming it had something to do with the loan forbearance (3).

"They never resumed taking money out of my account," he posted. "Then [the student loan] disappeared off my credit report about a year or 2 ago. Just got a letter and a text message from General Revenue Corporation looking to collect."

He's concerned about his defaulted payment showing up on his credit report again (4), along with the collection demand.

So what happened? And can a private lender have the right to take legal action and demand repayment in this case (5)?

Private and federal loans changing hands

Navient used to service both federal and private student loans for 12 million borrowers (6). But it got out of the student loan business.

It sold General Revenue Corporation to Single Point Group International in 2019 — prior to the pandemic (7).

Meanwhile, the Consumer Financial Protection Bureau (CFPB) sued Navient, arguing that the company failed to inform borrowers about income-driven plans, misallocated payments and hurt borrowers' credit reports (8).

As a result, in 2024, Navient was permanently banned (9) from servicing federal student loans and had to pay the CFPB $120 million to compensate student loan borrowers. That same year, Navient transferred its remaining public and private student loans to another servicer, MOHELA (10).

The Redditor was likely experiencing the complications and mixups of Navient transferring student loans to new companies and servicers.

For example, in the loan-transfer process, a student loan might temporarily be marked as "paid in full" on your credit report, but it doesn't mean it is. It just needs to be uploaded onto the new system.

There may be errors in your credit report during the transfer, so it's a good idea to dispute credit report errors directly with credit reporting agencies (11).