Defaulted On Your Student Loan? You Can Recover From It
I’ve kept on harping about the need to repay student loans fast, and I’ve even mentioned methods of doing it. While, it’s all very good to say that you should repay student loans fast, what happens if you just cannot? What if you just don’t have the finances to repay your loan? What should you do then? The problem is that once a student loan goes into "default" status the full balance of the loan becomes due immediately. This also means that you lose the right to use other options for delaying payment, including student loan deferment and forbearance.
The problem is that an unpaid defaulted student loan can have long-term consequences. These consequences go much beyond just the loan directly. One of the first things that will happen is that your credit report will take a hit. You can also lose your eligibility for other types of federal loans. So, how do you recover from a defaulted loan? Studentdoc.com reports:
We recommend working with a company that specializes defaulted student loans. Several such companies exist, and can be found online. In general their services are free - eventually they plan to take you from a defaulted loan to a "current loan" status and consolidate your other loans. The long-term benefit is reducing your interest rate, monthly payments and student loan debt. The short-term benefit is that they will guide you through the processes of "fixing" your defaulted loan.
Read more: Recovering from Defaulted Student Loans