Defaulted student loans bring serious consequences.
Defaulted student loans can create a truly dire financial situation that can be difficult to escape.
Student loan default generally occurs when you have not made payments on a loan for more than 270 days. The consequences are severe – the entire unpaid balance of your loan plus any interest is immediately due and payable. You may no longer be eligible for repayment plans or student loan forgiveness programs, and you certainly will lose eligibility for additional federal student aid. Your credit rating will be damaged, making it hard to buy a car, get a credit card, or rent an apartment. Your wages and tax refunds may be garnished, and you may be sued in court by the lender. It can take years to reestablish credit and to recover from defaulted student loans.
Avoid defaulted student loans with help from ACCC.
There are many ways to avoid defaulted student loans, and the professional credit counselors at American Consumer Credit Counseling (ACCC) can help you to explore them all.
ACCC is a nonprofit organization that offers free credit counseling, affordable debt management solutions, and a wealth of free educational materials to help you manage your money and get out of debt.
Our certified and highly trained counselors can walk you through a wide range of student loan solutions and provide options for how to handle defaulted student loans.
ACCC counselors are also available to answer questions about other kinds of debt and to help you make a plan to get out of debt for good. When you speak with our counselors in person or on the phone, we’ll review your entire financial situation and put together a detailed analysis of your income, expenses, and assets. You’ll receive a personalized list of options for paying down debt, along with the help you need to put the plan you select into action.
How to avoid defaulted student loans.
Some of the most common strategies for avoiding defaulted student loans include:
- Student loan repayment plans that provide more affordable monthly payments.
- Deferment and forbearance arrangements that allow you to suspend payments for a period of time until your finances are more stable.
- Student debt consolidation loans, allowing you to consolidate student loans into a new loan with a lower interest rate and lower monthly payments.
- Student loan forgiveness plans, where the balance of student loans is forgiven for people entering fields such as military service, healthcare, community service, and teaching.
Learn more about avoiding or managing defaulted student loans, and about ways to consolidate private student loans.