AVOIDING DEFAULTED STUDENT LOANS
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.