Student loan default can be super frustrating to manage. If you want to know where to get started to get out of default, this post is for you. Estimated read  time ~ 5 minutes, estimated watch time at 1.5x ~ 3 minutes.

 

 

Student loans enter default when a borrower hasn’t made the minimum monthly payments for 270 days.

 

Step 1: Find out who holds your student loans

 

When your student loans are in default your federal student loan servicer still owns your loans. However they may have turned over the responsibility for collecting payment to a collections company. Typically the longer your student loans have been in default the more likely it is you’ll have to work directly with a collections company.

 

The best place to look at who holds your loans currently is the National Student Loan Data System (NSLDS). Typically the company name is listed as a hyperlink that you can click to find contact information.

 

Step 2: Contact your loan servicer or the collection agency.

 

When you find out who to contact, contact them. The first step in getting out of default is to get in touch with whoever is going to determine your repayment plan and get started.

 

Step 3: Provide necessary information and fill out necessary paperwork.

 

In order to set up your new repayment plan the company you’re working with is going to need a lot of information. This information includes sensitive stuff like income information. So you want to make sure the company you’re dealing with is legitimate. There are a lot of scammers preying on the desperation of borrowers with defaulted student loans. 

 

You can always make sure you’re working with someone legitimate by contacting the Default Resolution Group at the Dept of Ed.

 

Step 4: Be persistent and keep at it! You can do it!

 

Collections companies are often difficult to work with. Keep your head up and don’t be discouraged. It takes time to get into student loan default and it takes time to get back out. Keep working at it until you have a repayment strategy you can afford.

 

Next week I’ll talk about whether you should consolidate or rehabilitate your student loan default and discuss the pro’s and con’s of each.

 

 

Helpful Links

Student Loan Default Resolution Group (Dept of Ed) Phone number 1-800-621-3115

National Student Loan Data System (NSLDS)

List of Dept of Ed Student Loan Collection Agencies (scroll down page)