Across the country, more and more student loans are ending up in default. To learn what the repercussions may be if you find yourself in this situation, read on.
Many student loans which are paid on a monthly installment will wind up in default if they have not been paid for 270 days. Student loans which are paid by a different installlment period, will be considered in default if they have not been paid for 330 days. As you probably already know, the government can do several things to obtain payment for your defaulted student loan. Listed below are a few of the recourses which the governement can use:
- Any tax refunds you are expecting could be intercepted by the IRS. These refunds can be withheld until your student loan is paid in full. It may be possible to challenge this action.
- Another recourse the government has is to garnish your wages. This process includes taking a percentage of your wages to repay the loan. The percentage taken can be up to fifteen percent (15%) of your wages. You may be able to challenge this garnishment.
- It is also possible for the government to take federal benefit payments and apply them to your student loan balance. Social security payments are a form of federal benefit payment, though there are several more. Thankfully, the amount which may be taken for repayment of your student loan is limited.
- A less common recourse would be to initiate a law suit against you to obtain payment of the student loan. Additionally, there is no statute of limitations on this recourse, which means they can file suit at any time they like, even ten or fifteen years down the road.
If all of these sound like nothing you want to go through, then it might be time to visit the web site of Student Loan Borrower Assistance at www.studentloanborrowerassistance.org. Student Loan Borrower Assistance can help answer a large range of questions with regard to defaulted student loans. They can also help you to find a solution to your problem.
To obtain addiitional assistance, you can contact the Department of Education\’s Ombudsman at (877) 557-2575. This department also has a web site, www.fsahelp.ed.gov. Make note that the Department of Education\’s Ombudsman office cannot assist you unless you have already attempted to resolve this issue on your own.
It is never a good thing to default on your student loan. In addition to several recourses to obtain payment of the student loan, your default could be reported to the three credit reporting agencies which will immediately drop your credit score. If the government should decide to use a collection agency to obtain payment of your defaulted student loan, you will end up paying additional collection costs. Don\’t allow this to happen! Try to negotiate a repayment plan so you don\’t affect your credit history adversely.
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categories: student loan,student loans,payment of student loans,payment of student loan,default of student loan,default of student loans,repayment of student loans,student loan repayment,government student loan,government student loans,school loan,school loans
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