Avoiding Disgracing Your Credibility as a Loaner How to Deal with Student Loan
Students who were given loans (under Title IV of the Higher Education) are entitled
to pay their loan on its due date. Failure to pay the loan [for (1) 180 days, for
monthly installment basis (2) 240 days, for frequently payment basis would mean a
default on your loan. It is the lender’s responsibility to remind you about the
repayment of your loan.
If still unsuccessful, the guaranty agency would take over and place your loan on a
fail to pay status. Your lender then would have the privilege of making up for the
time you missed to pay and would require you paying the entire balance on a single
payment.
Bearing the consequences of a defaulted loan
If your student loan is on “fail to pay” status, you’re forced to pay the due amount
immediately. This would require you to pay the whole amount on single payment and
delayed payments could no longer be excused.
This would also result on long term effect such as (1) your salary can be trimmed (2)
your tax refunds are withdrawn (3) your qualifications for application of other types
of loans can be affected.
If a guarantee agency took over your loan
A possibility of additional collection cost may be charged to you.
Your employer might be required to surrender 15% of your salary for the
repayment of your loan.
The agency is entitled to do some legal actions to oblige you of repaying
your loan.
Credit agencies would be noted about your credibility as a loaner. This might
hinder you from having future federal loans.
How to prevent this situation?
You have to consolidate your student loans the result of this idea would be
(1) degraded interest rates (2) extension of terms on your student loan.
Student loan suspension common reason of suspending your loan would be (1)
medical internship (2) economic incapability (3) public service (4) other reasonable
incapacity.
Leniency this means that the loaner can pay the interest first and pay the
principal depending on what the loaner and the lender have settled. This could extend
the repayment period of the loan.
Cancellation of Loan there are certain qualifications for you to be able to
cancel your loan. (1) In case of death [if you die] (2) If you become totally
disabled [this would be regarded on certain basis in accordance of the school you’re
attending] (3) If you engaged in permanent teaching or join in military service.
How to cancel my loan?
1. You have to detect who is currently keeping your loan.
2. Check the received collection notices.
3. Call the information center of the Federal Student Assistance.
4. In case of a guarantee agency took over, make an agreement with them.
5. Deal with the administrative section of Education if they are the one holding
your loan.
6. If DoE has ascribed your loan through a collection agency, notify the agency
that you’re filing a discharge of the debt.
Those who qualifies in attempting to discharge their loan
If the school you’re attending is closed while you were enrolled or of leave
of absence this means that you haven’t completed the course curriculum the school
offers because the school you’re attending stopped its operation.
Withdrawal from school within a period of 90 days before its closure.
If the loaner is already released of its responsibility, he/she is entitled of
reimbursements of previous payments made. If there was a poor credit background had
been imposed, the agency is responsible in informing other federal loan agencies that
the concerned individual is free from liability and its history of bad credit is
deleted.