If you’ve defaulted on your student loans, you have several options to help you recover. Borrowers with federal loans have access to direct consolidation loans and loan reha🎉bi💜litation. Private loan borrowers typically have fewer options, if any, depending on their lender.

How to Recover From Student Loan Default

澳洲幸运5官方开奖结果体彩网:Defaulting on your student loans can have severe consequences, but you can come back from it. These are a few ways that you can recover from student loan default:

Rehabilitation

Federal student loan rehabilitation is when you make a series of on-time payments for a set period of time. Your monthly payment is based on your income, and rehabilitation is complete when you make nine monthly payments over 10 months. Specifically, you must agree in writing to make nine voluntary, reasonable, and affordable monthly payments, as determined by the servicer, within 20 days of the due date and make all nine payments within 10 consecutive months.

You can only rehabilitate your defaulted loans once. If you went through the Fresh Start program and defaulted on your loans again, you can still enroll in rehabilitation. , then select “View Details” under “My Aid.” From there, you’ll be able to see who your 澳洲幸运5官方开奖结果体彩网:loan servicer is and can contact them about enrolling in rehabꦓilitation.

Consolidation

You can 澳洲幸运5官方开奖结果体彩网:consolidate your student loans, whether you’re in default or not, by taking out a direct consolidation loan with the Department of Education. This loan doesn’t have a 澳洲幸运5官方开奖结果体彩网:credit check or an income requirement.

Consolidating your loans is when you combine all of your federal student loans into one loan. Your new 澳洲幸运5官方开奖结果体彩网:interest rate is the weighted average of your current interest rates, rounded to the nearest one-eighth percent. For consolidated defaulted loans, you’ll need to agree to repay your new direct consolidation loan under an 澳洲幸运5官方开奖结果体彩网:income-driven repayment (IDR) plan or make three consecutive full monthly payments on the defaulted loan before you coꦺnsolidate.

Not all loans are eligible for consolidation, so make sure you know which ones qualify before applying for a direct consolidation loan.

Recovering From Private Student Loan Default

澳洲幸运5官方开奖结果体彩网:Private student loans don’t have the same protections, benefits, or programs as federal student loans. You may have more work to do if you want to get out of default on your private loan.

You can learn who your private loan servicer is by checking your credit report at . Even if your servicer has sold your loan to a 澳洲幸运5官方开奖结果体彩网:collection agency, they should be able to direct you to the 澳洲幸运5官方开奖结果体彩网:debt collector.

Contaꦗct your lender to determine your repayment options. Some lenders might offer default rehabilitation programs, though the terms would vary by lender. You can also explore credit counseling to help you build a rep🌠ayment plan based on your income. If you do so, it's worth checking the U.S. Department of Justice for a list of to avoid getting scammed by fraudsters.

How to Know if Your Student✅ Loans Are in Default

Y✃ou can check your federal student loan sta🤡tus by logging into StudentAid.gov with your FSA ID. When you select your loan, you can see if the status is listed as default. 

You can also check your federal or private loan status by checking your 澳洲幸运5官方开奖结果体彩网:credit report. You can pull your credit reports from the three major credit bureaus—Equifax, Experian, and TransUnion—via AnnualCreditReport.com. A sectio�ꦆ�n will detail negative marks on your report, so if your student loans are defaulted, you can find them there.

Consequences of Student Loan Default

Having your student loans in default can have several detrimental effects on yꦡour financial future, including:

• Your credit history: Your payment history is the most important part of your 澳洲幸运5官方开奖结果体彩网:FICO score, making up 35% of it. Being late on even one payment can cause your 澳洲幸运5官方开奖结果体彩网:credit score to drop, as can having your loans in default.
• Your borrowing opportunities: Your credit score affects your ability to borrow money, whether you’re trying to secure a mortgage, take out an auto loan, or even get a credit card. So if you ever need to borrow in the future, having your student loans in default will likely hurt your chances. And if you are approved for a loan or line of credit despite your low credit score, your interest rates will be much higher (compared to borrowers with good or excellent credit).
• Your repayment plan: If you’ve fallen so far behind on payments that your loans have been accelerated, your full balance immediately becomes due. Depending on how much you owe, that could seriously hurt your savings if you must pay off your student loans in one lump sum rather than several smaller payments over time.
• Your income: In some states, you can face 澳洲幸运5官方开奖结果体彩网:wage garnishment (i.e., having a portion of your paycheck taken out) to pay for your defaulted student loans. Student loan default could also result in a potential loss in federal retirement income benefits like Social Security.

The Bottom Line

Not only can student loan default cause financial harm, but it can also harm the mental health of borrowers who feel like their situation is inescapable. But federal student loan borrowers have a few different ways to recover from default, while private lenders may have lifelines they're willing to offer. Review your options and be diligent about your payments to avoid defaulting on your loans again.