How to Get Student Loans Out of Default
When you get a federal student loan, everything seems so good and you often ignore a possible default that may be hanging over your head. It is easy to apply for a student loan and get it. However, if you have not paid your loan for the last 270 days, you have crossed the line and are in default.
Facing a default is not unusual as many students fail to make their payment on time and eventually resort to seeking expert help. There are several ways to get out of default without hurting your financial position any more.
Instructions
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1
Get a loan consolidation plan
If you have acquired multiple loans for education, the best thing you can do is to get a loan consolidation plan. Consolidation loan is nothing but a package that combines all of your different loan payments in one single loan, allowing you to repay it on new terms and conditions. When students apply for loans, they usually get multiple packages and this is what hurts them the most when they default on their payments.
The best thing about the consolidation loan is that you are no longer in default once your application for the plan has been approved. Consolidation plan is not limited to more than one loan; you can even consolidate one loan as well. The eligibility criterion for applying for consolidation loan is pretty simple. The types of loans that can easily get consolidated include Direct loans, Perkins loans, subsidized and unsubsidized Stafford loans (GSLs), FISLs, Supplemental Loan for Students (SLSs) and PLUS loans. -
2
Get a reasonable and affordable payment plan
If you fail to get your loan consolidated, the next best option is to get a reasonable and affordable payment plan for your loan. Talk to your loan holder and told him/her about your situation. You need to provide solid reasons and evidence of your financial position, making it easy for the loan holder to come up with a reasonable plan. Be mindful that when you default, your loan gets held by a collection agency that works in coordination with Education Department. -
3
Cancel your loan
Another way to get out of loan default is to get your loan discharged. Once your loan is cancelled, you are no longer required to make any payments. However getting a loan cancelled is not easy as there are certain conditions that a student has to meet before benefiting from this option. These conditions vary from one institution to the other.
