Information on the modalities if daughter defaulted on student loan - The Bills.com Blog

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Information on the modalities if daughter defaulted on student loan

Question: I have a wayward daughter that decided to stop going to school. She didn't drop out. She just stopped in her 2nd year. She applied for FASFA and was approved for 2 yrs. We had to give our financial info. Does this make us cosigners? Are we ultimately responsible for these payments? Will they effect our credit? When will they effectour credit-do they wait to see if she pays and then come after us, or are we as responsible right from the 1st payment? Thanks for your help.

Answer: There is a federal loan where a parent can "help" a student with eligibility for school. This loan is called a parent plus loan. If you have a parent plus loan, you (the parent(s)) are responsible for the payback of the loan. This loan will show on your credit report. Therefore, not making payments can negatively affect your credit.

A student loan is in default if the student has not made

payments for 270 days. One primary consequence of a defaulted student loan is loss of eligibility for future student loans or any type of state or federal student aid. The default is reported to all national credit bureaus which generally eliminates the option of credit-based alternative loans. Another possible consequence of a default would be wage garnishment.

If you are having trouble meeting your student loan payments, contact your loan servicer. You may qualify for a deferment, forbearance, or repayment alternative that is more affordable.

Consolidation can help by extending your loan's repayment term beyond the standard ten years. While this will increase the total interest charges, the monthly payments will become more manageable. Bills.com is partners with Freedom Student Loans. If you would like a free consultation, please visit www.freedomstudentloans.com or call toll free at 1-866-902-9641.

I hope the information helps you Find. Learn. Save.

Best,
Bill
www.bills.com

Also, make sure to get a free financial health check-up with Bills IQ!

User Comments

1. Posted by Salx on Thursday 17th January 2008 05:33

For a long time I've been looking for loan to enable me pursue my education in U.S for I'm not a US citizen and I completed my secondary Education on October last year. So what can you help me i to reach that point?

2. Posted by Robert on Thursday 17th January 2008 11:28

You can still apply for private student loans but, you will need a co-signor who is a US citizen to guarantee the loan.

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