What happens to Americans who have taken out student loans from the U.S. government, but aren’t able to pay them back?

Increasingly, the U.S. government is taking them to court to get its money back. National Public Radio’s Bobby Allyn reports on a relatively new policy that the U.S. Department of Education put into place during the last two years of President Obama’s tenure in office:

On Adriene McNally’s 49th birthday in January, she heard a knock on the door of her modest row-home in Northeast Philadelphia.

She was being served.

“They actually paid someone to come out and serve me papers on a Saturday afternoon,” she says.

The papers were from a government lawsuit that represents something more than just an unwelcome birthday gift — it’s an example of a program the federal government has brought to 19 cities around the country including Brooklyn, Detroit, Miami and Philadelphia: suing to recover unpaid student loans, like the ones McNally owes.

Every day, 3,000 people default on their federal student loans — and those lack of payments amount to an unpaid bill of $137 billion for the federal government. For decades, the government has tried to get borrowers to pay up by hiring debt collection agencies to call and send letters. But now the government is trying this new lawsuit strategy.

McNally filed for personal bankruptcy back in 2006, which eliminated all of her debts except for her student loans, which by federal law cannot be discharged in bankruptcy proceedings. Assuming that she now loses her lawsuit for having defaulted on her student loan payments — which is the outcome of nearly every such case brought to court — McNally can expect to have either her wages be garnished, her Social Security or disability payments be docked, or her house or other valuable personal assets have a lien placed on them until the debt has been cleared.

Quite possibly, all three actions may be taken against her. While the first two options would involve seizing a portion of any income she earns or Social Security benefits she receives, the third option of imposing a lien on any property she owns is an indirect form of leverage. NPR’s Allyn describes how imposing a lien on a student loan defaulter can provide a means for the government to recover the money the borrower owes should its more direct seizures be insufficient to fully pay off the government-issued loan.

Jennifer Schultz, an attorney with Community Legal Services of Philadelphia, says that a lien traps a person, like house-handcuffs.

“I describe a lien as a kind of marker on the house,” Schultz says. “Any time a person tries to do a transaction involving their house — a new mortgage, a refinance, or if they try to sell it — they’re going to be expected to clear up any debt that’s attached to that house.”…

Once a lien is in place, the government can force the sale of a former student’s home. That’s “exceedingly rare,” officials say, but it does sometimes happen.

The federal lawsuit program is expected to keep expanding, and with more than 8 million people currently behind on their federal student loans, it doesn’t look like the private firms will run out of work any time soon.

The private firms to which Allyn is referring are the debt collection firms that the U.S. government hires to shake down defaulting and delinquent student loan borrowers prior to taking them to court. According to Bloomberg‘s Shahien Nasiripour, the U.S. government is paying its debt collection contractors $38 for every $1 of debt they succeed in collecting.

When you consider that the U.S. government has so stacked the deck in its favor against Federal Direct Student Loan borrowers, you have to wonder why it costs so much to produce so little benefit for U.S. taxpayers. The U.S. government badly needs to get out of its failing student loan business.