If your student loan has fallen into what is know as default status, there is still hope for you. By paying close attention to your debts, you can dig your way out of the situation you have found yourself in.
First, you should try to make arrangements with your lender to start repaying the amount you owe them. After you have made 6 monthly payments on time, you will most likely qualify for additional help once you have shown your interest in getting the debt paid off. After 12 months of making your payments on time, you can apply for what is known as rehabilitation. Once you receive your rehabilitation, you will no longer be in default with this loan and the record of it with the credit bureau will be removed.
What is Student Loan Rehabilitation?
Student loan rehabilitation is a program that has been set up to assist borrowers who have slipped into default with their student loan. The end result is to return your original loan to a favorable status and get you back on track with your payments. The program is set up so that you can make 12 monthly payments of an amount that you and your lender have agreed upon.
If you have contacted your lender and can not come to an agreeable amount for the rehabilitation program, you can contact the office of the Federal Student Aid Ombudsman. Their office acts as a neutral party designed to resolve disputes over student loans between you and your lender.
The most important thing you can do if you are in default with your current student loans is to contact your lender to work out a repayment plan that is agreeable to both of you, you would not want to enter into a repayment agreement that you can not stick to, as this would look even worse on your credit report. Make sure you can handle the amount of the monthly payment before entering into any agreement for repayment.
Student loan default is a serious matter that will never go away on its own. You need to work towards getting your debts paid off as soon as possible because ignoring the debt can lead to damages on your credit record and other consequences that we have already mentioned. Ignoring your student loans will only cause your trouble to snowball into something bigger if not handled right away.
By : Ian Wilkie
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