Student loan repayment can be stressful, but you have some options if you're having a tough time. You can contact your loan servicer, change your repayment plan, and look into loan forgiveness. Or you can consider loan consolidation, deferment or forbearance.
There are two other instances in which your loans may be forgiven without making a payment:
If you've been walloped by the economic fallout from the coronavirus pandemic, taking advantage of the federal student loan repayment suspension and interest freeze is a no-brainer. You can now stop making your payments and enjoy the six-month, interest-free period handed down by the U.S. government.
Resolving Defaulted Loans
The myeddebt.ed.gov website helps student loan borrowers, who are in default, to arrange debt payments. There are multiple ways to contact the Default Resolution Group, or you may call 1-800-621-3115. For more information on defaulted student loans, see Understanding Delinquency and Default.
Your responsibility to pay student loans doesn't go away after 7 years. But if it's been more than 7.5 years since you made a payment on your student loan debt, the debt and the missed payments can be removed from your credit report. And if that happens, your credit score may go up, which is a good thing.
Public Service Loan Forgiveness
PSLF forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.
Forgiveness is the best kind of student loan debt relief, but it's hard to come by. Income-driven repayment plans and Public Service Loan Forgiveness can erase people's remaining debt after many years of payments. Only federal student loans can be forgiven. Forgiveness can leave recipients with a big tax bill.
Your student loan holder will be able to seize your refund — and your future refunds — until the tax offset stops. You can get federal student loans back in good standing through rehabilitation and consolidation, which will also stop other consequences of default like wage garnishment.
The $90 billion of student loan forgiveness isn't the only student loan debt that has been cancelled during the Covid-19 pandemic. ... If Congress or the president enacts student loan cancellation, it would be incremental to the student loan forgiveness that will continue through September 30, 2021.
Unfortunately, there can be many negative consequences of failing to make your student loan payments, including wage garnishment, a drop in your credit score or a suspension of your professional license.
If you can't pay student loans according to the set payment schedule, then you can expect to be headed for default. Student loans become delinquent after 30 days of nonpayment; delinquent loans may be subject to additional fees and penalty charges, outlined in your original loan agreement.
What Happens to Federal Student Loans When You Die? If you have federal student loans and pass away, your family can apply for loan discharge due to death and have the remaining balance forgiven. Federal loan discharge for borrowers applies if you have any of the following federal student loans: ... Direct grad PLUS loans.
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