How to Get Defaulted Student Loan Repayment Options
If the student loans you took out for college are coming back to haunt you because they are defaulted, then you're not alone. Student loan debt accounts for a high amount of personal debt and is the source of many people's poor credit score and history. There are very few ways to actually "get out" of repaying your student loans, but there are repayment options available.
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Instructions
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Before you start doing anything with your student loan repayment make sure to have a concrete financial plan in mind. If your loans are in good credit standing or you have not gone into the repayment period yet, then this is an optimum time for you to decide your student loan repayment options.
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Go to the website www.1800iwillpay.com. Copy and paste the website into your browser. You'll notice that the URL will change from 1800iwillpay.com to the U.S. Department of Education's Federal Student Aid web page. This is a just a redirect for the Department of Education. Oftentimes when you call the Department of Education they will direct to this website or to the National Student Loan Data System although the database is mainly for tracking down your loans not finding payment options.
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Look for the repayment option that most accurately reflects your financial situation. There are different repayment options available. You may also find that you have a combination of circumstances. Once you contact someone make sure to continue asking them what your options are for getting out of default. It seems that although there are supposedly clear lines that there are times these waver. The person that you talk to could know about a plan that can help you when another person has no idea about it.
If you are low income, your student loan debt to income ratio is high, or you have a family then it is worth asking about the Income Based Repayment (IBR) program (see resources below). There may be some circumstances when this can apply to defaulted loans.
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Make sure to know what type of student loan that you defaulted on as well as have a list of all of your defaulted student loans. In many cases, the number of loans you owe may be more than one because the loans are sold and transferred to different credit collection agencies. For example, if you owe a sum of $10,000 in defaulted loans this may actually be one to five (or more) different loans lumped together as one sum.
It's very important to find out the status of all of your student loans and find the holder of the loans. Don't assume that because a collection agency is contacting you for repayment that this is the only defaulted loan you own. The best resource for finding all of your student loans is to go to the National Student Loan Data System (NSLDS) online. See the resources section for an article on how to find your loans through that system.
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Be patient. Because you are no longer eligible for deferment or forbearance once you default on your loans the total amount becomes due immediately and you will end up with garnished wages and tax returns, including any stimulus checks. Unless you have the money to pay the loan outright the repayment process can be long and hard.
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Tips & Warnings
Document any conversations that you have with collection agencies or the U.S. Department of Education regarding repayment.
Always be nice on the telephone. You borrowed from the government and now they have rights to your money. It doesn't always seem fair, but a courteous attitude can go a long way in getting better assistance.
If a collection agency threatens you or is abusive call the U.S. Department of Education directly and report the harassment. There are situations where they will pull the loan from the agency that has been assigned to collect. When this happens you may get the collection fees dropped.
Resources
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