If you haven’t made a payment on your student loan in months, you’re not alone – one in four student loan borrowers are in default, according to the Department of Education. It may be a common issue, but it’s something you need to address as soon as possible.
When you default on a loan, it means the lender can now take legal action against you. Your default timeline depends on the loan servicer and its terms. For instance, a federal loan can be considered default after 270 days without payment, whereas a private loan can default as soon as you miss you first payment.
Unlike other debts, your student loan will not disappear regardless of how long you wait. Your debt will only go away on its own if it’s forgiven, discharged, or if you pass away. When none of those situations apply, the best way to get out of default is pay the entire amount owed immediately. But when “immediately” isn’t possible, your total balance will accumulate interest – and lots of it.
Additional aggressive actions from the lender can impact your financial well-being, including:
You have options, even with a defaulted loan. Make arrangements for settling your owed debt ASAP, even if you’re not paying the entire amount at once. While the right plan can help you resolve the default quickly, it’s difficult to determine that on your own.
Speak with a financial professional such as Student Loan Solver’s Student Loan Advisors to learn what your options are for your unique situation. Remember, your payments won’t get easier or go away unless you know how to address them.
Don’t let your credit, paycheck, and ability to provide for your family take a hit because of owed student loans. Our team will empower you make the best decision to get back to your life.