Default Avoidance Assistance
For student loan borrowers is available through various government and private programs
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, its should be nearly impossible to default on a student loan. Yet, it happens because borrowers fail to identity, recognize or navigate the information and sources available to help. At Student Financial Assistance Center, we have friendly and knowledgeable advisors who can provide the guidance you seek to avoid becoming a default statistic. Consultation is free. Call 888-658-0035 today.
l 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, 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 Nationwide Student Loans. Default can occur when borrowers fail to keep Student Financial Assistance Center aware of changes in their address and name changes which could cause billing statements to go astray. In addition, Student Financial Assistance Center can offer alternatives when borrowers have trouble making monthly payments. Borrowers may apply for a deferment or forbearance, or even change repayment plans. Speak to a Student Loan Advisor for a no cost analysis of your student loan needs.
Rehabilitation or Consolidation?
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 Student Financial Assistance Center.
Call today: 888-658-0035.
Experience and Professionalism are Key
Student Financial Assistance Center has friendly and knowledgeable Student Loan Advisors eager to assist with your Student Loan needs. Student Financial Assistance Center 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 Student Financial Assistance Center 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!