Will There Be Repercussions If My Student Loan Goes Into Default?
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.
After 270 days, a student loan can be considered in default, if it is a monthly installment loan. If the student loan is paid by a different installment method, the student loan can be considered in default after 330 days. The recourses which the government can use to obtain repayment of the defaulted loan are numerous. Following is a list naming a few of these actions:
- The IRS can intercept any income tax refunds you have coming to you and withhold these monies until your student loan is paid in full. If this should happen to you, you may be able to challenge the offset.
- Your wages could be garnished by the government. The government can take a percentage, up to fifteen percent (15%) in some cases, of your wages in order to repay the loan. Again, it may be possible 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.
- A less common recourse would be to initiate a law suit against you to obtain payment of the student loan. Additionally, there is no statute of limitations on this recourse, which means they can file suit at any time they like, even ten or fifteen years down the road.
If you would like to get in touch with someone about your defaulted student loan to see what you can do to avoid these actions, you can reach out to the Student Loan Borrower Assistance office at www.studentloanborrowerassistance.org. This office can answer many questions regarding defaulted student loans and possibly guide you to a solution.
Another source of assistance is the Department of Education’s Ombudsman. This department may be reached at (877) 557-2575 or www.fsahelp.ed.gov. You need to make sure that you have already attempted to resolve this matter yourself prior to calling as the Department of Education’s Ombudsman will not be able to assist you otherwise.
It is never a good thing to default on your student loan. In addition to several recourses to obtain payment of the student loan, your default could be reported to the three credit reporting agencies which will immediately drop your credit score. If the government should decide to use a collection agency to obtain payment of your defaulted student loan, you will end up paying additional collection costs. Don’t allow this to happen! Try to negotiate a repayment plan so you don’t affect your credit history adversely.
Lexington Law Erased of This Woman’s Bad Credit - For Good. See Documented Proof at www.lexingtonlawreviews.com.
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