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“How do I get out of default?” is one of the most frequent questions we get from borrowers. Being in this situation can be overwhelming, but you have options.
A federal student loan is considered to be in default if payments haven’t been made for 270 days. If you’re in default, it’s important to have a plan in place, as defaulting can have serious negative consequences. It can lead to the garnishment of wages and tax returns, a lower credit score, and losing one’s eligibility for federal student loan benefits. We’ll take a look at the three main options available if you’re in default:
Loan RehabilitationLoan ConsolidationPay off the loans in fullLoan Rehabilitation
Loan rehabilitation involves making nine on-time monthly payments of a predetermined amount to your servicer.
How to Get Started:Let your servicer know that you want to start the loan rehabilitation process. To find your servicer, log in to the Federal Student Aid website or call the Default Resolution Group if your defaulted loans have been transferred to a collection agency.Present