How to Get Financial Aid After Defaulting on Student Loans

Learn how to get reinstated after defaulting on a student loan.

Difficulty: Moderately Easy

Instructions

Things You'll Need:

• Imagination
• Well-written letter

1. I once defaulted on a student loan and was initially rejected for any further financial aid. I relocated and had forgotten to update my address with my student loan servicer, plus I had forgotten that I was in repayment status, so it never occurred to me to make a payment. This resulted in one big headache.
   The first thing you must do is decide on a good reason for defaulting on your loan in the first place. My excuse would probably work best for you, even though, in your case, it may be a little white lie. Another excuse would be that you were under extreme stress due to an illness such as anxiety or panic attacks. This seems to be very poplular among students trying to get reinstated for loans. You would, however, have to go to a doctor and explain that you have been having panic attacks just so you will have documentation. The reason this route is so popular is that it can't be proven that you do or don't suffer from this particular type of illness.

2. The next step is to put together a well-written letter stating your above reason for defaulting on your student loan. Note that you will have to provide documentation. In the case of unemployment, all you have to do is get a friend to write a short letter stating that you were unemployed during that time. Then you can get it notorized. Don't worry, they never check into these things--there are simply to many appeals coming in for them to check.

3. Next, you will need to try and make the payments you missed. If you can't pay the full amount, simply apply for a hardship or deferrment with the institution that manages your student loans.

4. The last step is to send a copy to your school's financial aid office and send a copy to the Department of Education's financial aid division. Wait a week and then go to your financial aid counselor and check on the status (going in person is always best--be sure to looked stressed!).
   These are the steps I took to begin receiving financial aid again. Good Luck!

[sixstring2slim]

on 6/3/2008 Alright Cooler, Good Advice and well written! Bailey here.. my explanation to the Student Loan Statements, (that arrived at my door before I recieved my Cap an Gown..) was applying for disability at the VA hospital and therefore unemployed! I was never asked for a letter of proof or anything substantive. But I would also suggest being prepared to do so! Consolidating your loans to one Loan Company, like NelNet.. can sometimes (as in my case) get you of the grips of the Educational Institution you attended! They are even more relentless (and simply deny future attendance until paid in full) If I sound Jaded, your listening correctly.. I now teach Science in an low income urban High School in Indy! I pass out information on Pell Grants and Scholarships, but eventually they will have to get a Student Loan also. So, I don't want anyone thinking of me or you, as cold hearted, manipu