Understanding your student loan options is crucial, especially if you are struggling to repay student loans. If you already have defaulted student loans or are delinquent on your loans, you may be able to get temporary or permanent relief from making payments. Our debt counselors can help you look at options.
Student Loan Options With ACCC
One common mistake struggling student loan borrowers make is to postpone payment on their student loan. Deferment and forbearance are temporary fixes (1-3 years). They do not address underlying financial issues which may require budget counseling.
What happens when you postpone your student loan payments? You may most likely be responsible for paying the interest that accrues during the period of postponement.
What are your options with ACCC?
American Consumer Credit Counseling can help you explore your student loan options regardless of how much you owe or your loan status (current/delinquent/default) including:
- Eliminating the loan altogether through loan cancellation
- Considering other, more affordable payment plans or loan consolidation. Monthly payments on some income-driven plans can be as low as $0.
- Postponing payments through deferment or forbearance programs to avoid delinquency/default
What if you have delinquent or in default on your loans?
If you have are delinquent or in default on your loans (1-270 days behind on loan payments), you must take actions to avoid default! When you default on your student loans, you will suffer negative consequences. For example:
- Your credit will be damaged.
- Your loan balance will increase dramatically as collection fees of up to 18-25% of loan balance are added.
- IRS can intercept any income tax refund you may be entitled to until your student loans are paid in full.
- The government can take (“garnish”) a limited portion of your paycheck.
- The government can take some federal benefit payments (including Social security retirement benefits and Social Security disability benefits) as reimbursement for student loans.
- Private lenders and the government can sue you to collect defaulted student loans. Unlike other debts, there is no time limit on suing to collect student loans — you can be sued indefinitely.
Don’t get discouraged if you are in default! Our counselors can help you explore your options for getting out of default including Loan repayment (payment can be as low as $0), loan rehabilitation, and loan consolidation.
If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today.