Does student-loan default mean marshal law?

IF YOU'VE DEFAULTED on federal student loans, you can breathe more easily. You won't be arrested for simply failing to make payments.

For a hot second, people were panicking after a Houston television station reported that a local man, Paul Aker, had been arrested because he owed $1,500 for a federal student loan he took out in 1987.

"What's the worst that can happen to you if you don't pay your old federal student loans?" the anchor began the segment. "Garnishment, something on your credit report? Or how about being arrested by the U.S. Marshals office?"

Aker, who appeared on the newscast, was incredulous. "Why are the marshals knocking on my door? It's amazing."

Public outrage ensued.

But as I watched a video of the interview, something didn't seem right.

I've been reporting on debt collection for decades, and never had I heard about anyone being arrested just because they hadn't paid their student loans. People get their wages garnished. Their credit scores get decimated. But arrested?

I immediately thought that unscrupulous debt collectors must be jumping for joy. They could use Aker's plight to pressure people into paying debts they didn't owe or scare others that they would be arrested and hauled off to jail.

Just recently, the Federal Trade Commission slammed four debt-collection outfits and their affiliates, which the agency said engaged in abusive practices, including impersonating law enforcement officials and threatening to arrest people.

Well, thank goodness, there was more to Aker's story. And there are two lessons to be learned.

First, there is no need to panic. You cannot get arrested simply for defaulting on your federal loans.

"If anyone out there thinks that it is the top priority of the U.S. Marshals Service to arrest student-loan violators, they are sadly mistaken," Richard Hunter, chief deputy for the marshals' Southern District of Texas, told me.

Marshals made several attempts to contact Aker to appear in federal court, according to Hunter. Notices were sent to numerous addresses. Marshals spoke with Aker by phone and requested that he appear in court, but Aker refused, a statement from officials said. So a federal judge issued a warrant for Aker's arrest for failing to appear at a December 2012 hearing.

"A big misconception is, people are being arrested for not paying their loans, when in fact they are being arrested for failure to appear in court," Hunter said. "At the point the U.S. marshals show up at your door, there have been months - perhaps many years - of notices, summons, etc., issued."

Here's the second lesson in this story.

During the Houston news broadcast, Rep. Gene Green (D., Texas) asked Aker if he had been notified by anyone ahead of time about the state of his loan. "You didn't receive any kind of notice?" Green said. "No certified mail? Nobody coming out saying, this is the debt you owe?"

"Nothing in almost 30 years," Aker said.

We now know from court records dating back to 2007 that Aker had indeed been contacted about the debt. A default judgment was entered for $2,709.47. But more to the point, even if he hadn't been served about the loan, he is ultimately accountable for keeping track of how much he borrowed. It's your responsibility to know what you owe. If you move, let your lenders know. If you haven't been receiving bills, call and find out why.

"The key to all of this is communication," Hunter said. "If you have a loan that you're behind on, call the Department of Education and get a deferment or request a payment plan. If you have received a court summons, by all means communicate with the court. If you choose not to, at some point the federal judge handling your matter may order the U.S. marshals to bring you to court."

The National Student Loan Data System is the Department of Education's central database for student aid. Go to www.nslds.ed.gov to find information about your federal loans. The Consumer Financial Protection Bureau has a useful tool to help you figure out how to pay off your loans. It can be accessed at www.consumerfinance.gov/paying-for-college/repay-student-debt.

With more than $1.3 trillion in outstanding student loans in the United States, the effort to collect will only increase. In addition to paying back the loan plus penalties and interest, Aker has to pay $1,258.60 to reimburse the U.S. marshals for arresting him. Still, his case is extreme.

"People should not be afraid that U.S. marshals will kick down their door for student loan violations," Hunter said.

What you should be afraid of is the interest and penalties that accrue if you let your loans go into default.