Student loan collections don’t only
involve phone calls from the U.S. Department of Education's
account management department; collections agencies contracted by the
Department Of Education notify you of your defaulted student loan debt. Defaulting on your student loans causes long
term consequences, especially on federal student loans. The penalties are far
more severe than if you merely stop paying your credit card bills.
Many non-students feel that if their taxes are being taken then
the loan is being taken care of. So
allow me to put this into perspective for you-offsetting your tax refunds
happens once a year so if there is a balance after the offset fees and penalties
are added to that balance also. In
addition to an offset non-student may also face administrative wage garnishment (AWG).
What Can I Do?
Loan rehabilitation is a great option for getting your loans out of default if
you are employed and can demonstrate that you have the financial ability to
repay the loans back.
What’s In It For Me?
If you choose to rehabilitate your loan, at the end of your rehabilitation (9 months) you
are eligible for all of your borrower rights such as deferment and forbearance benefits,
stops possible administrative wage garnishment, stops the possible IRS offset,
credit report is updated and you are now eligible to return back to school.
Individuals that say collection agencies must stop calling you is not correct,
if you default on your loan rehabilitation the collection agencies will call you
(possibly) or they will pursue the governments’ legal rights. (I know this because I was a former student loan collector)
Your Rights During The Collection Process
The good news is that the collection agencies that are awarded contracts from the Department of Education still have to follow
federal law—The FDCPA protects consumers against unfair, abusive, and harassing
debt collectors.
Bottom line: you have options and you have rights
Student loan debt can be
overwhelming, but depending on the type of loans, and the status of your loans,
you should have more than one repayment option. If you need help understanding and
choosing a repayment plan or if your student loans are in collections, please
contact us we can help you.
In the right corner there is a pop up contact request that allows you to ask a question or schedule a free 30 minute consultation.
