Defaulting on student loans is normal, but it can damage your credit and your finances. And that’s why you should act as soon as you realize you’re about to miss payments.
If you need help with your student loan, this guide will help you find several options to look into. Then, hopefully, you won’t have to deal with further setbacks.
Let’s begin.
Start By Contacting Your Student Loan Servicer
When you take out a student loan, you’re assigned to a student loan servicer by private lenders and the federal government. So if you need help, you should contact your servicer first.
Logging into your My Federal Student Aid account will help you find your federal student loan servicer. If you have a private loan, find out who to contact for repayment questions from the original lender.
Your student loan servicer can help you:
- Find student loan forgiveness and cancellation programs you may be eligible for, such as Public Service Loan Forgiveness, borrower defense to repayment, total and permanent disability discharge, etc.
- Lower your student loan repayments via income-driven repayment.
- Reduce your payment temporarily through forbearance and deferment
While loan servicers should be able to address any of your queries, many borrowers claim that the information they receive is insufficient or incorrect. So we recommend that you do your research on the Federal Student Aid website.
If you find any information wrong, ask to talk with a call center supervisor.
Seek Help From National Organizations
Many national organizations provide student financial assistance – both free and paid. But you can get the help you need for your student loans. Here are a few of them:
-
The Institute of Student Loan Advisors (TISLA)
TISLA provides quick, free, and unbiased student loan advice. There is no need to register or pay to receive assistance; TISLA is entirely funded through donations.
You can get assistance determining if you qualify for PSLF, whether your loan is in default, enroll in an income-driven repayment plan, and many more. Also, if you’re having problems with your loan servicer, TISLA can help.
TISLA can provide student loan help in the following areas:
- Selecting a Repayment Strategy
- Paying off your debts
- Getting out of delinquency on your student loans
- Student loan forgiveness eligibility
- Completing forms for IDR plans or forbearance
TISLA doesn’t give legal advice or manage your loans on your behalf. Instead, it’s a resource center that equips you with the knowledge you need to act as your own and manage your debt.
-
American Consumer Credit Counseling (ACCC)
No matter the stage in your repayment, the ACCC can offer their assistance. You can meet with a counselor to learn about loan repayment strategies and find help to come out of default.
-
National Foundation for Credit Counseling (NFCC)
The NFCC can provide you with a personal guide to assist you through your options. In addition, you can talk to a loan counselor to get a personalized plan for getting back on track and a thorough analysis of your finances.
The NFCC is a non-profit organization, and depending on your financial situation, you may be eligible for free assistance.
Other NGOs, such as those that deal with different sorts of debt, may be able to aid with student loans. Look for non-profits that provide free or low-cost assistance to low-income borrowers.
Consider Your Legal Alternatives
When you miss payments, your federal loans default after nine months. Private student loans have a shorter grace period. Your credit will be harmed by default, and it will be on your credit report for seven years, regardless of whether you repay.
In a student loan default, the government provides clear paths to recovery through student loan rehabilitation. Your servicer can assist you in determining which option is appropriate for you.
However, defaulting on a private loan might be very problematic.
If a private lender sues you to collect a debt, look for a student loan lawyer through the National Association of Consumer Advocates to help you negotiate a student loan settlement or organize your defense.
Final Thoughts
Be wary of for-profit debt-relief companies that promise loan consolidation, help you get loan forgiveness, or put you in income-driven payments at a charge.
Many companies claim to work in good faith, but instead of paying your student loan servicer, they take your money from the escrow-like account and retain it. In short, there are scammers out there.
However, companies sometimes charge for services like consolidation or participation in a payment plan. But you can do these things yourself for free. Unfortunately, some may accept your money and fail to deliver on their promises.
Others may charge you for extra services such as credit monitoring. If you think you’ve been defrauded, you can submit a complaint to the government.
