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Options and Advice from Bills.com if Delinquent on Student Loans - The Bills.com Blog
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Options and Advice from Bills.com if Delinquent on Student Loans
Question: I already have a Sallie Mae loan. Went to school but could not make it in the field i went to school for. Now I have a job but it doesn't pay very much. I have been delinquent in my payment and am struggling to keep my head above water. I cannot make such large payments. IS THERE ANYTHING I CAN DO? PLEASEHELP ME.
Answer: 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.
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.
While
your federally insured student loans are in default, the U.S. Department of Education (DOE) will not allow you to obtain any more government backed loans. Luckily, the same regulations also state that you do not have pay off the entire balance of your defaulted loans to become eligible to borrow again. The DOE requires that student loan servicers, the companies that lend money and/or manage students loans under an agreement with the DOE, provide borrowers a way to bring defaulted loan current, a process called “rehabilitation.” Rehabilitating your defaulted loans will not only make you eligible for new student loans, it will also clear the delinquencies these accounts are showing on your credit reports, meaning that the accounts should appear as if you never defaulted on the loans.
Rehabilitating your student loans is a relatively easy and straightforward process. First, you need to contact your lender or servicer to express your desire to repay and rehabilitate
your defaulted loan. Once you and your lender have agreed on a repayment plan, you need to make sure that you make all of your payments on time; late or missed payments will jeopardize your rehabilitation plan. After you have made six timely payments on the plan, you will again be eligible to obtain federally backed student loans. After you have made twelve payments on time, the lender will finalize the loan rehabilitation by reporting the account as current to the credit bureaus and removing the past delinquencies from your credit reports.
I encourage you to explore www.finaid.org a wonderful online resource for student loan questions. Bills.com also offers a wealth of information about student loans .
I hope my advice helps you Find. Learn. Save.
Best,
Bill
www.bills.com/blog/
Also, make sure to get a free financial health check-up with Bills IQ!
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Bill has answered all sorts of questions and has been able to provide those in need of financial guidance with helpful and valuable advice and information on their specific financial area of interest. If you need specific guidance on any of the above mentioned financial areas, feel free to Ask Bill your financial questions and get better informed. Also, make sure to get a free financial health check-up with Bills IQ!
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