Learning how to avoid student loan default with proactive communication is as simple as 1-2-3. Whether you are currently in school, getting ready to graduate or have been out of school for years, there are several creative ways to avoid student loan default with proactive communication. More importantly it is imperative to understand that defaults on student loans can put a student in a situation where not only can their tax refunds be confiscated but also a certain percentage of one’s wages. This is even a more important reason to avoid student loan default with proactive communication.
First and foremost you will need to do a little bit of research and educate yourself. If you don’t already know who your lender is and who you need to contact about your loans, now is the time to find out. There are a wide number of financial institutions that service student loans such as Nelnet and many others. Students receive periodic statements with interest amounts and loan balances. These statements provide a means to contact the lender in addition to other important information.
Where having a large student loan debt can be stressful it does not have to be particularly during today’s rough financial times. With a little bit of patience and research students can avoid student loan default with proactive communication and getting in touch with the lender.
Most student loans do not require repayment until six months after graduation. You will need to determine if you have a private or federal loan. Private lenders may not offer a deferment. If you fall in this category and are unable to make payments contact the lender. You can ask for a deferment. There will be several qualifying factors however the lender would rather have you take advantage of a student loan deferral program than go into default. This program will provide the student with a longer grace period based on one’s financial situation. This is basically called an economic deferment and this will help students to avoid student loan default with proactive communication.
The other option is if you have had economic deferments in the past to avoid student loan default you may need to go into forbearance. This is not as bad as it sounds. In today’s economy many students are going into forebearance which is simply a way to reduce or postpone payments due to unemployment, a hardship situation, and even a partial disability that directly affects one’s ability to make wages. Students who are ineligible for a deferment generally go into forbearance. Students are allowed to go into forbearance in 12 month increments for up to 3 years. This will require contacting the lender every 12 months. Again this is all about how to avoid student loan default with proactive communication. This is important since one never knows when he or she may want to return to the classroom and will need another student loan.
If you don’t qualify for deferment or forbearance there is one other option to avoid student loan default with proactive communication. Remember this is not the time to give up. Contact the lender and use the magic words. Yes there are magic words that must be used in a very specific way. Again think about the fact that your goal is to avoid student loan default with proactive communication. Tell them you are experiencing a hardship and that you are aware that “the law says that you only have to pay what is reasonable and affordable for you.” If the lender says that there is another minimum amount you must pay they are wrong (newstictches.co.uk).
Student loan default is one of the things that are scored very negatively on a credit report. Be proactive, get organized and pick up the phone and avoid student loan default with proactive communication.