Student loans in default to be referred to debt collection, Education Department says

Or mandatory service.

Edit: appears they will be going into federal garnishment, not private collections.

Right, but once they are taken by a private collections company, would they still carry that with them? I assume at some point the collections company actually buys out the loan in hopes of collecting more. Once they buy out the loan, they are owed, but at this point it's arguable the non-defaultable student loan was paid.