Millions of student loan borrowers are senselessly defaulting on their debt while failing to take advantage of programs meant to protect them financially. With all the repayment plans and programs available to borrowers, it should be near impossible to default on a student loan. And yet it happens because borrowers fail to identify, recognize or navigate the information and sources available to help. At the Student Loans of America, we have friendly and knowledgeable Student Loan Advisors who can provide the guidance you seek to avoid becoming a default statistic. The consultation is free. Call 888-267-1996 today.
Borrowers who fail to make a payment on time are considered delinquent on their Direct Consolidation Loans. Borrowers who do not make payments for 270 days are in default. Defaulting has severe and long-lasting consequences, as follows:
• The Department of Education can immediately demand repayment of the total loan amount due.
• The Department of Education will attempt to collect the debt and may charge collection costs.
• The Department of Education reports defaulted loans to national credit bureaus, damaging borrowers’ credit ratings and, making it difficult for borrowers to make purchases such as cars or homes.
• Borrowers with loans in default are ineligible for Title IV student aid.
• Borrowers with loans in default are ineligible for deferments
• The Internal Revenue Service can withhold borrowers’ Federal income tax refunds.
• Borrowers’ wages may be garnished.
It is important that borrowers with Direct Consolidation Loans stay in touch with the Student Loans of America. Default can occur when borrowers fail to keep the Student Loans of America up to date on address and name changes, causing billing statements to go astray. In addition, the Student Loans of America can offer alternatives when borrowers have trouble making monthly payments. Borrowers may apply for a deferment or forbearance, or change repayment plans. Speak to a Student Loan Advisor at the Student Loans of America for a no cost or obligation analysis of your student loan needs.
There are many benefits to rehabilitating a defaulted loan before consolidation. If you consolidate a defaulted loan without rehabilitating it, your credit record continues to show a default status on the loan. This is true even after the consolidation loan pays off the defaulted loan in full.
• Consolidating a defaulted loan will result in your credit report bearing the notation that the loan was in default but then “paid in full.” This notation will remain on the credit report for up to seven years. While a “paid in full” notation is preferable to an unpaid default, , there is still the possibility that lenders will deny you future credit, such as mortgages, auto loans, or credit cards because of this notation.
However, if you rehabilitate a defaulted loan before consolidating it, the loan holder will update your credit record to no longer reflect the default status of the rehabilitated loan or loans.
• Rehabilitating a defaulted Direct Loan or FFEL loan requires that you make at least nine (9) full payments of an agreed amount within twenty (20) days of their monthly due dates over a ten (10) month period. Rehabilitating a defaulted Perkins loan requires twelve (12) on-time monthly payments. Contact your loan holder to obtain additional rehabilitation terms and conditions for your loan type.
Keep in mind that if you default on your loan, you are liable for any collection costs incurred to collect the loan. If you pay off the defaulted loan by taking out a Consolidation Loan, the amount you borrow must be enough to pay off your defaulted loan, including principal, interest, and collection costs. This means that the amount of the new loan may need to be up to 18.5% larger than the principal and interest outstanding on your defaulted loan.
Both rehabilitation and consolidation will reinstate your eligibility for additional Federal student aid under Title IV of the Higher Education Act (Pell Grants, FFEL and Direct Loans etc.)
If you are currently facing the stress of defaulting on your student loan, help is available. Free advice from a Student Loan Advisor is available from the Student Loans of America. Call today: 888-267-1996.
The Student Loans of America has friendly and knowledgeable Student Loan Advisors eager to assist with your Student Loan needs. We have assisted thousands of student loan borrowers apply and qualify for government approved programs that are designed to ease the financial stress many are facing when dealing with their student loan payments.
For some people, a reduction in their overall student loan payment is all they need to get back on stable financial ground again. It’s never too late to apply and qualify for payment relief programs that are available today. Contact a Student Loan Advisor at the Student Loans of America for a free, no cost or obligation consultation. A 10-minute phone call is all you’ll need to determine what payment programs are available so you can stop stressing and start saving!
At this point in time you’ve undoubtedly given your present financial situation a lot of thought. Our goal is to provide you with accurate, up-to-the-minute information regarding your various options so you can now make a decision on the best ways to tackle your outstanding student loan debt.
But now you’re really going to have to do some hard thinking about how you want the next chapter of your financial future to unfold. Are you going to continue to let the stress of your outstanding student loan payments worry you sick and keep you up at night; unable to focus on anything else? Or are you going to take the bull by the horns and take action toward solving your burdensome student loan debts once and for all?
Remember, nothing will happen unless you decide to do something about your current financial situation. Your student loan obligation will still be there when you wake up tomorrow morning. It will not go away.
So it’s your call now. Either continue down the same path or begin taking action to get your financial situation straightened out so you can relax (at least a little bit) and start enjoying life again.
Make no mistake. We know this is a difficult decision for you. No one ever thinks they are going to have financial challenges themselves. These types of things are only supposed to happen to “other people.” But we give you a lot of credit, because many people would just stick their head in the sand and pretend everything is just fine… when it really isn’t.
Anyway, we thank you for inquiring about your student loan needs and hope this information was helpful to you. If you are interested in the benefits of possibly applying and qualifying for student debt assistance, your first step would be to contact us for a free review and analysis of your current situation.
Student Loans of America
1660 Hotel Circle North, Suite 102
San Diego, California 92108
Toll Free: 888-267-1996
Student Loans of America offers private, fee based application assistance services to assist consumers in applying for government offered programs. While such programs may be available for free directly by various government agencies, our services are fee-based and focused on application and document preparation. We do not charge fees for access to such programs, only to prepare and counsel relating to such applications programs. Services may be fulfilled by a third party processing agency. Copyright © 2014, Student Loans of America. All Rights Reserved. STUDENT LOANS OF AMERICA, SLA and their logos are trademarks and service marks are owned by Student Loans of America. All other trademarks used on this site are the property of their respective owners. Site design and maintenance by Design Strategies, Inc.