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Break Up with Student Loan Default

Missing Student Loan Payments

If you haven’t made a payment on your student loan in months, you’re not alone. One in four student loan borrowers are in student loan default, according to the Department of Education. It may be a common issue, but you don’t have to put up with it.

Defaulted Status

When you default on a loan, it means the lender can now take legal action against you. Your default timeline depends on the loan servicer and its terms. For instance, a federal loan can default after 270 days without payment, whereas a private loan can default as soon as you miss you first payment.

Unlike other debts, your student loan will not disappear regardless of how long you wait. Your debt will only go away on its own if it’s forgiven, discharged, or if you pass away. When none of those situations apply, the best way to get out of student loan default status is to pay the entire amount owed immediately. But when “immediately” isn’t possible, your total balance will accumulate interest – and lots of it.

Aggressive actions from the lender can impact your financial well-being, including:

  • Reporting your default to credit agencies, hurting your credit score
  • Garnishing your income
  • Filing lawsuits and/or judgements against you
  • Imposing collection fees, as high as 40 percent of your total debt

What to Do When You Owe

You have options, even with a defaulted loan. Arrange to settle your owed debt ASAP, even if you’re not paying the entire amount at once. While the right plan can help you resolve the default, it’s difficult to determine that on your own.

Speak with a financial professional such as our Student Loan Advisors to learn what your options are for your unique situation. Remember, your payments won’t get easier or go away unless you know how to address them.

Don’t let your credit, paycheck, and ability to provide for your family take a hit because of owed student loans. Our team will empower you make the best decision to get back to your life.

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MoneySolver
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