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It's almost impossible to imagine getting a college education without getting a student loan, and while most students make a concerted effort to repay the money that they borrow, some students for a variety of reasons have loans that go into default. Defaulting on these loans can have serious consequences. There are a few things a student should keep in mind if he feels he's nearing default on a loan, which can help save him future grief and get him back on the right track.
Student Loan Default Quick FactsStudent loans are one of the few debts that a person cannot discharge through bankruptcy. It doesn't matter if the student has completed his degree program or hasn't yet found a job after graduation. A student's loans go into default between 270 and 360 days after the due date if he has not paid on them. To avoid this, the savvy student should seek financial counseling before he embarks on his school career. A financial aid counselor in his school should be able to tell him what to expect when his loans are due and what his options are if he cannot pay.
Default ConsequencesNot paying back a student loan can wreak havoc on a student's post-college life. Among the steps that the federal government can take to get the student to repay his loans are wage garnishment, suing the student for the whole amount of the loan and withholding social security benefits. Additionally, the default of student loan will affect the student's credit rating for many years after he defaulted, making it difficult for him to purchase necessary big ticket items like a home or a car in the future.
Getting Loans Back on TrackStudents can defer paying on their loans if they are not employed or under employed after graduation. Additionally, some students are eligible for modified repayment plans based on their income, which allows them to pay their student loans back in smaller monthly amounts. Before a student begins his college career, he should sit down with a school financial aid counselor to get guidance. This school administrator can introduce the students to alternative methods for paying for school as well as educate him on how to borrow responsibly.
To learn more, visit FinAid.Org [http://www.finaid.org/loans/default.phtml] or the Federal Student Aid website [http://studentaid.ed.gov/PORTALSWebApp/students/english/index.jsp].
What else can I help you with?
Student loans in the state of WV?
It is very, very advisable to avoid defaulting on your student loans in any location. Some negative consequences of defaulting on a student loan can be found here http://www2.ed.gov/offices/OSFAP/DCS/default.html. However, if you have already defaulted, or are very close to defaulting, here is a guide to getting out of a defaulted student loan: http://www2.ed.gov/offices/OSFAP/DCS/repaying.html. Don't give up, defaulting on your loan is not worth it!
Avoid Defaulting on Your Student Loan Payment?
Student loans are nice in the beginning of your education because you don't really have to worry about coming up with the money for your education. Once you've finished your degree, however, loan institutions typically want their reimbursement immediately. How can you avoid defaulting on these loans? You can avoid defaulting by doing a number of things including requesting a flexible repayment plan, paying more than the minimum amount due for each student loan payment, loan deferment or forbearance and more. There are loads of options available other than simply not paying your student loan payment. Check into these various options.
How does the debt management and collections system for student loans work?
The debt management and collections system for student loans involves tracking and collecting payments from borrowers. If a borrower fails to make payments, the loan may be sent to a collections agency. The agency can use various methods to recover the debt, such as contacting the borrower, garnishing wages, or seizing tax refunds. It is important for borrowers to communicate with their loan servicer to avoid defaulting on their loans.
What happens if you don't pay student loans?
Defaulting on student loans is like defaulting on any other type of loan. Derogatory entries will be placed on your credit report for some time. This will make it difficult or impossible to get new loans. Since employers these days also check credit reports, it will be more difficult to get a job. After some time of not paying the loans, the lender will file a suit against you in state court to garnish your wages. The lenders will then get money out of your paycheck before you even see it; the amount that is taken out depends on state law. Suffice it to say, you should not default on student loans. Since these loans are non-dischargeable, it is not possible to get rid of them in bankruptcy (unless you die or are permanently disabled).
How do you get rid of student loans?
The only way to make student loans go away is to pay them off. Recent changes in bankruptcy laws makes it almost impossible for student loans to be discharged in a bankruptcy filing. Or simply avoid students loans, check out the Related Link.
What is the best way to avoid student debt?
You can try to avoid student debt by paying off your loans right away or as soon as possible. Save up and don't splurge on unnecessary items and foods. Try to be thrifty.
Do you have to pay a loan back?
Yes. Defaulting on your loans is against the law.
Can the government seize my inheritance to pay off student loans?
In some cases, the government can seize your inheritance to pay off student loans if you default on your payments. This typically happens if the loans are federal student loans and you are in default. It's important to stay current on your loan payments to avoid this situation.
Can you apply for a private student loan before you apply for a grant?
Yes, but you should find out how much Grant money and Federal student loan money you are eligible for before applying for Private student loans. Grants are free and Federal student loans are cheap. Private student loans are very expensive. Avoid them if you can.
What happens when you default on your student loans?
Defaulting on loans have pretty severe consequences. For example, your wages could be garnished or your income tax refunds taken from you. In regard to your credit score, the defaulted loans can show up on your history for up to 7 years. To learn more about the consequences, go to http://www.finaid.org/loans/default.phtml.
Where can student loans be obtained?
from various lending institutions. ^While true, avoid getting private student loans when possible as you aren't entitled to certain rights such as forbearance and deferments, These lenders also have interest rates that vary month to month depending on market conditions. If possible, always get Federal student loans.
Can they send you jail for a federal student loan on defaul?
Only if you gave fraudulent info to get it, keep it, or obstruct collection of it. Keep in mind that most student loans are federal government-backed financial aid, so there are enhanced penalties for those that abuse them. Borrowers guilty of no crime can have their tax refunds and wages taken, without a court order, for defaulting on their federal student loans in the US.
