Many college graduates fall on hard times and find that they are unable to make payments on their student debt, which can lead to their student loans going into default. Before you reach this point, options like student loan debt consolidation, forbearance, or deferment may help as you are able to either pool all of your student debt into one place and it makes it easier to manage or suspend payment completely. However, those that are already in default on their student loans may have more options than they think in terms of getting back on track.
Defaulting on student loans can cause a great deal of trouble but there is help available and there are defaulted student loan rehabilitation options that can be of assistance as well. Contacting your lender is going to be the first step and simply explaining your situation is going to get you started. Many lenders require a set number of repayments to be made, on time, in order to get your loan out of default, so this is something you need to look into as a defaulted student loan can cause a lot of trouble in your financial life.
However, before you default you should look into deferment options and forbearance options as well. Many lenders will allow you to put off student loan payments for months at a time, so you are better able to get on your feet financially.
Also, for some, student debt consolidation may lower your monthly payments on your loans if you have a lot of student loans from various sources. Student debt consolidation loans often come with a low interest rate that can make them affordable, but be sure you assess your financial situation and what getting a student loan consolidation will entail for you before proceeding.
There is new legislation as well, from the Obama Administration, which makes repaying student loans easier. Some college graduates can get their loan repayment amount lowered based on their income.
While defaulting on student loans is sometimes unavoidable, realize that it’s not the end of the world and there are many ways to reverse your default status or avoid defaulting altogether.