Essay On Student Loan Default

904 Words2 Pages

Student loan default can happen to anyone. All it takes is one unexpected event, such as a medical emergency or job loss, that leads to several missed payments during tight months.

Unfortunately, this is happening more and more. According to Time, 2016 saw 1.1 million people default on their federal student loans for the first time, leading to a 14 percent increase in defaults on federal student loans.

The question is, can you turn the ship around through student loan refinancing? Will refinancing even be an option once you have a student loan in default on your credit report?

Let’s find out.

Can you refinance a student loan in default – or after?

Let’s start with borrowers who currently have a student loan in default. If this sounds like you, refinancing will be likely impossible. …show more content…

However, if your defaulted student loans are private, a Direct Consolidation Loan will not be an option for you. In that case, you’ll need to work with your servicer to find out what their requirements are for rehabilitating your defaulted student loans.

There is life after a student loan default

Being in student loan default can feel hopeless, but it doesn’t have to be. While goals like refinancing your student loans might be far off because of a current or past default, there are other things you can do to tackle your student loans.

For example, you can go through the rehabilitation process to get your loan out of default. Then, sign up for income-driven repayment plans for lower payments. These two things can help to turn your situation around quickly.

What’s more, when the default is in the past, you can try refinancing. When you do, look for student loan refinancing lenders that evaluate more than just your income and credit score. That way, your chances of approval are likely higher and you can finally get that much-needed lower interest

More about Essay On Student Loan Default

Open Document