Hearings on the question of debt collection on student loans are presented. It is noted that in 1981 the Department of Education decided that collections on student loans would be shifted from the public to the private sector. The following concerns are addressed: the reasons for the Department's decision to transfer collection of defaulted student loans to private contractors; the possible negative effects of a hiatus in collections during the process of transferring collections from the federal to the private sector; the relative effectiveness of the private sector collection agencies compared to the Department of Education's collection efforts; and the contents of the Department's request for proposals and the rules or regulations that the Department is developing to insure proper conduct on the part of the private collection agencies. Findings of a 6-week study of the debt collection process and the cost effectiveness of federal staff compared to two prototype collection agencies' efforts are summarized. In addition, departmental problems regarding student aid programs are identified, and the debt collection bill proposed in H.R. 2543 is discussed. (SW)