Defaulted Student Loans
Defaulted student loans by fresh graduates or young peoples have increase, due to the bad economy. According to Department of education, default were up to 6.9% in year 2009 while in year 2008 just 5.2%. Jobless peoples are unable to repay the loan and the income of some fresh graduates are not enough to cover living expenses.
Defaulting the student loans is a very serious matter that will affect your credit history, is a negative impact for your credit score. Once you haven't pay your monthly payment more than 330 days, the government has the right to take your federal tax refund check or garnish up to 15% of your disposable pay in order to collect on a defaulted federal student loan.
In such case, you are allowed to appeal a Wage Garnishment & request a hearing matter on why you can afford the payment and wage garnishment your lender or guaranty agency is seeking.
4 ways of curing the defaulted loans
1) Enter a Loan Rehabilitation Program - This program is to remove your loan from a defaulted status. To rehabilitate your loans, you must make nine voluntary, payment on-time, full payments during a period of 10 consecutive months.
2) Consolidate the loan - to combined the several loans into 1 new loan, the combined loans will be paid and new Direct Consolidation loan is originated for the combined balance of the consolidated loans.
3) Get the loans totally discharged or cancel
4) Pay-off the loan completely in 1 shot.
The item 3 and 4 may sound not realistic, but some peoples may get the big amount in short time, such selling the valuable assets, borrow from parents or friends & etc.
For more student loan information, please check out Student Loans Guide instead of Defaulted Student Loans
Return to Loan-God Home Page
Return to top of the page