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 Student Loan Articles


Are you a recent college graduate who has defaulted student loans? Or are you suffering financially and cannot afford to pay back your student loans? Defaulted student loans occur when you fail to make payments on your student loan for 180 days. During this 180 day period, your lender’s collection agency is required to make numerous efforts to contact you about your loan repayment. If the collection agency’s efforts are deemed unsuccessful, your lender will hand over your defaulted student loan to your state’s guarantee agency. These agencies will then pay off your student loan and charge you high interest rates and penalty fees, while demanding you to payback your loan in full. If you have a record of a defaulted student loan you may have a hard time finding a job, apartment, or health insurance.

If you default on a student loan your credit history will suffer. When you have bad credit, it is much harder to get a loan, a new car, and even housing; since most landlords look at a potential tenants’ credit history. Even worse, if you have bad credit due to defaulting on your student loans, many employers are hesitant to hire you; thus, undermining the reason why you went to college in the first place.

Another consequence of failing to pay your student loans is the IRS can seize your tax refund until your student loans are paid off. Additionally, the Department of Education and guarantee agencies are able to take up to fifteen percent of your income if you default on your student loans.

If you default on a student loan, there are ways to get back on your feet. The simplest method is to payback your loan in full; however, if you are unable to do so you can consolidate your loans under the Federal Family Education Loan Program. This program was created by the federal government in order to alleviate the challenges for student loan repayment. It is a flexible program which consolidates your loans and creates one simple monthly payment; however, this program does require you to repay your loan quickly and at a higher rate of interest. Nevertheless, it does allow you to get back in control of your financial future. You could also ask for a deferment of payment if you are unable to pay back your student loans. However, this hard to qualify for since you need to prove that you are suffering from serious financial hardships such as high medical or insurance costs.

Having defaulted student loans is serious and comes with numerous consequences; nevertheless, there are ways to repay your student loans. Therefore, you should research repayment programs such as the Family Federal Education Loan Program as well as conventional loan consolidating companies in order to repay your old student loans.



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