You could suffer far-reaching and devastating consequences if you default on your student loans. Your balance will become due immediately. You could face thousands of dollars in fees, damaged credit scores and wage garnishments. These are only a few of the many consequences that may result from a student loan default. Job loss is a common reason why people default on their student loans. After a job loss, many people find they are unable to make payments. Fortunately, there could be several options that may help you avoid a student loan default until you can find another job. Option 1: Enroll in an Income-Driven Repayment Plan If you have federal student loans, then you may be eligible for an income-driven repayment plan (IDR plan). These are plans that limit your monthly payments to a percentage of your household income. If you do not have income, then you could owe $0…
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You can face multiple consequences if you default on your student loans. The possible consequences include lower credit scores, wage garnishment and thousands of dollars in fees. However, there could also be professional consequences for defaulting. You could have your professional license suspended or made ineligible for renewal. While Missouri and Kansas licensure boards will not take away your professional license for defaulting, you may run into problems if you move to another state. How you could be affected depends on the state and other factors. In Texas, licensing agencies will not renew your professional license if you are in default. This applies to all professions. In Illinois, licensing agencies can deny you a professional license or they can refuse to renew one. States also have different rules for how you can contest or correct your student loan default. You should determine your state’s options for scheduling a hearing or…
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The vast majority of student loan debt in the US comes from various federal loan programs. However, a smaller percentage of student loans are privately held. These are loans that originate from banks or other financial institutions. Private student loans do not have the same protections as federal student loans. However, a Senate banking bill would add multiple protections for private student loan borrowers. The Economic Growth, Regulatory Relief, and Consumer Protection Act could add the following protections to private student loans: Encouraging default rehabilitation. Private student loan borrowers could complete loan rehabilitation programs through their lenders. Completion of these programs would remove records of defaults from credit reports. Ending default acceleration. Lenders can accelerate the default process or declare loans in default when cosigners pass away or file for bankruptcy. This practice would end if new bill is signed into law. Protecting cosigners. Cosigners can be on the hook…
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