DON’T DO IT

 

I can completely understand the temptation of stop paying on your student loans. Many student loan borrowers find themselves overwhelmed with their student loan payments. I do understand. I have been there myself. However, I strongly urge you to do what it takes to make sure you do not put your student loans into a default status. That would be very bad for you. Let’s talk about student loan defaulting and what it could me to you:

• Getting hounded by a collection agency
• Having your federal tax refund intercepted by uncle sam
• Having your paycheck garnished by at least 15%
• If receiving social security, those payments can be taken by government
• You will eventually get sued and have to show up in court
• Your FICO credit score will drop like a lead balloon

There is nothing good that will come from defaulting on a student loan. Luckily a student loan does not go into default status until about 9 months of not receiving a payment. Even if you can’t make a full payment, you can make a partial payment to keep from defaulting. That’s a better part of a year so you do have some time to get your student loan back on track before it goes into default. Not in any particular order, I would suggest trying all of these strategies with your lender to get current on your student loans:

1. Request a hardship deferment.
2. Request a forbearance.
3. Call your lender and tell them your financial situation.
4. If you can’t make a full payment, make a partial payment.
5. Financially focus on getting your student loan current again.
6. Consolidate! If you haven’t consolidated your loans already, now would be a good time.

If you have already consolidated your student loan with your current lender and have exhausted all of your deferment and forbearance requests, look into consolidation your loan to Direct Loan. Direct Loan is a government student loan holder. I was on the verge of defaulting on my student loan with Nelnet and was able to consolidate that one single loan to Direct Loan at a lower interest rate.

 

While defaulting on your student loan may seem like a solution at this moment in time, believe me it is not. You will be better off taking care of it now rather than dealing with all of the negative consequences down the road. The grass is not greener on the other side. Take care of your student loan troubles now and you will be much less stressed out later in life.