HELP! My Student Loan Is in DEFAULT

If you think your any of your student loans are in default, you need to take immediate action. Do not wait because you probably have more options than you are aware of.

Be aware that defaulting on your student loan can severely damage your credit rating for years. And worst of all, your student loans will never simply go away. Bankruptcy does not apply to student loans.

If you have defaulted on any of your federal education loans, here are some options:

1. Contact the agency that is billing you. Do not wait!
2. Explain your situation fully.
3. Ask them what options are available to resolve your problem.
4. Let them know that you are willing to repay your loan and ask them to work with you.
5. Always stay in touch with your lender, servicer, or collection agency. This is especially important if you have changed your address, phone number, or email address.

If your student loan is in default by mistake, here are some other options:

1. If you are enrolled: You have been attending school on at least a half-time basis. Contact your school registrar to get a record of all of your dates of at least half-time attendance. Contact each school you have attended since you received your loan so your documentation is complete. Ask your loan servicer for the last date of attendance on file for you. If your last date of attendance is not correct, provide your loan servicer with a copy of your documentation showing the correct date.

2. If you have a deferment or forbearance: Deferment or forbearance may allow you to temporarily stop your monthly loan payments. Both of these options need to be approved by your loan servicer. They are not automatic. Ask your loan servicer to confirm the start and end dates of any deferments and forbearances that have been applied to your loan account. If the loan servicer has incorrect information, provide documentation with correct information.

3. If your lender is not receiving your loan payments: You may believe that you have made payments that were not credited to your account. Ask your loan servicer for a statement that shows all payments made on your student loan account.

If you want to get your student out of default, here are some options:

1. Pay the loan in full.
2. Discuss a repayment plan with your lender. -- You have several ways to repay your loan by making monthly installment payments on your account.
3. Consider Graduated Repayment monthly payments will begin low and increase gradually over time.
4. Consider Extended Repayment lowers monthly payments over a longer period of time and has a predictable payment schedule.
5. Consider Income-Sensitive Repayment monthly payments are calculated as a percentage of your income.
6. Ask your student loan servicer how you might rehabilitate your defaulted student loan.
7. Consider a Federal Consolidation Loan to combine your student loans and reduce your monthly payment.
8. Ask your student loan servicer if you qualify for payment relief.