How To Recover From a Defaulted Student Loan
In these challenging economic times, many students have fallen behind on their student loan payments. If you have previously defaulted on a student loan, but are intent on going back to school to finish your degree, the Department of Education provides options that can help you achieve your goals!
Basically, there are 4 options available for students who are in default on a student loan:
- Repay or satisfy the loan in full
- Consolidate your loan
- Rehabilitate your loan
- Make six agreed-upon monthly payments over a six month period. Your payment amount must be approved in advance by the Department. Every qualifying payment must be timely (received before the due date) and you cannot make all six payments as a single lump sum payment. Once your eligibility to receive additional federal financial aid has been restored after making six consecutive monthly payments, you must continue to make timely monthly payments to maintain your eligibility or else it will be permanently lost until the debt is resolved entirely. In other words, you may qualify for this program only once.
** Since defaulted student loans have no statute of limitations for enforceability, you would remain ineligible for additional federal financial aid until you complete one of the options mentioned above.
For more detailed information, please visit http://www2.ed.gov/offices/OSFAP/DCS/going.back.to.school.html