Do I Need to Worry About Defaulting On My Student Loan?

There is a rapidly increasing number of defaulted student loans across the country. This article is devoted to explaining the government’s recourses against you and what you can do about the situation.

Many student loans which are paid on a monthly installment will wind up in default if they have not been paid for 270 days. Student loans which are paid by a different installlment period, will be considered in default if they have not been paid for 330 days. As you probably already know, the government can do several things to obtain payment for your defaulted student loan. Listed below are a few of the recourses which the governement can use:

- Any tax refunds you are expecting could be intercepted by the IRS. These refunds can be withheld until your student loan is paid in full. It may be possible to challenge this action.

- Another recourse the government has is to garnish your wages. This process includes taking a percentage of your wages to repay the loan. The percentage taken can be up to fifteen percent (15%) of your wages. You may be able to challenge this garnishment.

- Federal benefit payments meant for you can also be used to repay your student loan. Social security income is a form of federal benefit payment. Limits apply pertaining to how much may be taken.

- It is less likely that the government will file a legal action against you as they have so many other forms of recourse. However, it is still an option they have open to them. Additionally, it is good to keep in mind that there is no statute of limitations regarding student loans. This means the government can file a law suit against you for repayment of the student loan at any time they would like. This can even be many years down the road when you have all but forgotten about your defaulted student loan.

If all of these sound like nothing you want to go through, then it might be time to visit the web site of Student Loan Borrower Assistance at www.studentloanborrowerassistance.org. Student Loan Borrower Assistance can help answer a large range of questions with regard to defaulted student loans. They can also help you to find a solution to your problem.

To obtain addiitional assistance, you can contact the Department of Education’s Ombudsman at (877) 557-2575. This department also has a web site, www.fsahelp.ed.gov. Make note that the Department of Education’s Ombudsman office cannot assist you unless you have already attempted to resolve this issue on your own.

It is never wise to allow a student loan to go into default unless there is absolutely nothing you can do. Even so, as the government has so many actions they may take to obtain payment, it is far better to try to reach a repayment plan to ward off any of these possible actions. Try everything you can to keep from defaulting on your student loan.

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Category: Student Loans