Defaulted Federal Student Loans – Step By Step Intro
It is easy to establish whether or not you have defaulted federal student loans. By definition you are considered at default if you meet either of the following:
- you have failed to provide payment for 270 consecutive days in the case of federal student loans under a monthly payment scheme; or
- it’s been 330 days since payment was made for a loan under a less frequent payment plan
However, in order to be certain with the exact timeframe one will be held liable for default, it is best to determine it through the terms of the grant. As previously mentioned, the default date will be based on the terms of federal student loans payment wherein the shorter the payment plan, the longer it will take before a person is held in this position.
Determine If You Do Have Defaulted Federal Student Loans
Once you have confirmed that you indeed have defaulted federal student loans, the next step would be to contact the appropriate agency that can help you with your dilemma, provided that you know the type of grant or student loan you obtained. The US Department of Education has a sub-department known as the Default Resolution Group that can assist you if your defaulted federal debt involves:
- any of the following loans: FFEL or Federal Family Education, Federal Perkins, and Direct Federal Student Loans; or
- any of the following grants: TEACH, Federal Pell, SMART, and FSEOG or Federal Supplemental Educational Opportunity Grants
If your defaulted federal student loans are not in the list, then you should contact the agency or agencies involved directly.
What to Do If You Were Wrongly Tagged as Having Defaulted Federal Student Loans
There are instances when individuals have been marked as having defaulted federal debt by mistake. If you think you are a victim of this, pinpoint the cause of the confusion and address it accordingly. For instance: If your loans were deferred or you were granted forbearance, make sure that the information that you and the servicer have correspond. If they don’t, provide the necessary documents to correct the error. Remember that a record of having defaulted federal student loans can affect a lot of things, including your credit standing and future loan applications. This is why it is utterly important to make sure that you pay your debts on or before its due date to spare yourself from the possibility of going into default and marring your records.
Consider the Options for Addressing Your Defaulted Federal Student Loans
If you do have defaulted federal student loans, it would be wise to act on the matter as soon as you possibly can. Of course, the easiest and most effective way to eliminate any defaulted IRS student loans is to pay them off. Nowadays aside from cash payments, you can also issue a check or use your credit card to pay off your debt. If, unfortunately, you do not have the capacity to pay, there is payment relief (which includes deferment of your defaulted federal student loans) or federal student loans forgiveness.