You should call your loan servicer to inquire about your defaulted student loan. They will be able to provide you with information on repayment options and help you navigate the process of resolving the default.
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As an expert in student loans, I can offer detailed insights on who to call about a defaulted student loan. Dealing with a defaulted loan can be overwhelming, but taking the right steps to address it is crucial.
First and foremost, you should reach out to your loan servicer. Loan servicers are companies contracted by the Department of Education or other loan holders to manage and collect student loans. They have the necessary expertise to guide you through various repayment options and help you resolve your default status.
Calling your loan servicer is an important initial step as they can provide personalized information tailored to your specific loan. They can inform you about available options such as loan rehabilitation, consolidation, or income-driven repayment plans. Moreover, they can help you establish a new repayment plan that fits your current financial situation, effectively reducing the stress and burden of your defaulted student loan.
It’s worth noting that loan servicers are there to assist you, and their primary goal is to help you get back on track by providing guidance and support. Therefore, prepare any relevant information, such as your loan details and financial situation, before making the call to ensure a productive conversation.
To emphasize the significance of reaching out to your loan servicer, let’s consider a quote from finance expert Dave Ramsey: “Ignoring your student loan bills won’t make them go away. In fact, it will only make things worse. Don’t let your student loans spiral out of control. Take control today.”
Now, let’s delve into a few interesting facts about defaulted student loans:
- Defaulted student loans can negatively impact your credit score, making it difficult to obtain future loans or credit cards.
- In the United States, the default rate on student loans is around 10%, indicating a significant financial burden for many borrowers.
- Loan rehabilitation is a common option for resolving default, which involves making several consecutive on-time payments to bring the loan back to good standing.
- Loan consolidation allows borrowers to combine multiple federal student loans into a single loan, potentially simplifying repayment and reducing monthly payments.
- Income-driven repayment plans, such as Income-Based Repayment (IBR) and Pay As You Earn (PAYE), calculate monthly payments based on your income and family size, ensuring affordability.
To summarize, if you find yourself with a defaulted student loan, don’t panic. Reach out to your loan servicer to explore the available options and work towards resolving the default. Taking control of your financial situation is crucial, and with the right guidance, you can regain stability and pave the way for a brighter financial future.
Table:
| Loan Repayment Options | Feature |
|---|---|
| Loan Rehabilitation | Helps remove the default status by making consecutive on-time payments |
| Loan Consolidation | Combines multiple federal student loans into a single loan, potentially simplifying repayment |
| Income-Driven Repayment | Monthly payments based on income, ensuring affordability |
Video response
In this YouTube video, Katie and Dr. D assist a couple who have defaulted on their $52,000 student loans for over five years. They discuss the couple’s options, including offering a settlement or starting monthly payments. While it is unlikely that the lender will accept a settlement, Katie advises them to begin making payments and to use their current $20,000 towards the loan. With a household income of $120,000 and five children, Katie emphasizes the importance of budgeting and encourages the couple to work hard and hustle to pay off the remaining $42,000. She commends their progress and motivates them to strive for a debt-free life.
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If you don’t know who your loan servicer is, call the Federal Student Aid Information Center (FSAIC) at 1-800-433-3243.
If you have a defaulted federal student loan owned by the U.S. Department of Education (ED), immediately contact ED’s Default Resolution Group. They will help you figure out the best way to resolve the default based on your individual circumstance. Default Resolution Group. 1-800-621-3115.
Call the Default Resolution Group at 1-800-621-3115. Besides the new program, the Education Department offers three clear ways to recover from federal student loan default: repayment, consolidation and rehabilitation.
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Who to talk to about defaulted student loans?
As a response to this: 1-800-621-3115
If you need help with your defaulted loan, contact our Default Resolution Group online or by phone at 1-800-621-3115.
Similarly one may ask, Will my defaulted student loans be forgiven? Whether or not student loan forgiveness applies to defaulted loans depends on the program the Education Department offers. For example, defaulted Direct Loans aren’t eligible for the Public Service Loan Forgiveness Program or income-driven repayment plan forgiveness.
Moreover, How do I settle a defaulted student loan? Answer: How to get a student loan settlement
- Make contact yourself. Reach out to the company that’s been in contact about your defaulted loan.
- Hire an attorney. Choose a student loan lawyer or an attorney who specializes in debt settlements.
- Work with a debt settlement company.
What happens if you don’t pay defaulted student loans? Answer will be: Once a loan is in default, it’s subject to the collection processes mentioned above. That means the government can garnish wages (without a court order) to go towards paying back the loan, intercept tax refunds, and seize portions of Social Security checks and other benefit payments.
Correspondingly, What should I do if my student loan is defaulted?
As a response to this: Remember, it’s in your best interest to act quickly to resolve the default, because the consequences of default can be severe. If you have a defaulted federal student loan owned by the U.S. Department of Education (ED), immediately contact ED’s Default Resolution Group.
Secondly, When do private student loans go into default? Private student loans often go into default as soon as you miss three monthly payments (90 days). You can also default on a private student loan if you declare bankruptcy, default on another loan, or die. Private lenders may attempt to collect on your debt directly, or they may hire collection agencies to try to collect on your debt.
Subsequently, What percentage of student loan borrowers default? Answer to this: Student loan default can feel overwhelming. But if you’ve defaulted, you’re not alone: Within three years of entering repayment, 9.7% of student loan borrowers default, according to the Education Department.
Just so, What happens if you default on student aid?
In reply to that: You lose eligibility for additional federal student aid. The default is reported to credit bureaus, damaging your credit rating and affecting your ability to buy a car or house or to get a credit card. It may take years to reestablish a good credit record. You may not be able to purchase or sell assets such as real estate.
In respect to this, What should I do if my student loan is defaulted? The answer is: Remember, it’s in your best interest to act quickly to resolve the default, because the consequences of default can be severe. If you have a defaulted federal student loan owned by the U.S. Department of Education (ED), immediately contact ED’s Default Resolution Group.
In respect to this, When do private student loans go into default?
Private student loans often go into default as soon as you miss three monthly payments (90 days). You can also default on a private student loan if you declare bankruptcy, default on another loan, or die. Private lenders may attempt to collect on your debt directly, or they may hire collection agencies to try to collect on your debt.
Also to know is, What percentage of student loan borrowers default?
Answer: Student loan default can feel overwhelming. But if you’ve defaulted, you’re not alone: Within three years of entering repayment, 9.7% of student loan borrowers default, according to the Education Department.