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Educational Series
Debt Management Credit Counseling Corp.501(c)3 Nonprofit Organization
3310 N Federal Hwy, Lighthouse Point, FL 33064Tel 866.618.DEBT (3328) / Fax 954.545.4510
Your Guide To Debt Freedom
www.dmcconline.org
What happens if my loans go into default?
If you are delinquent making your student loan
payments, you should take advantage of the relief
options available to you before your loans go into
default. Federal loans go into default when they become
270 days past due, while private loans are generally
placed into default at 120 days past due.
Defaulting on a student loan can have a number of
negative consequences, including reduced credit scores,
assessment of collection costs, loan acceleration, wage
garnishment, and in the case of federal loans, seizure of
your tax refunds.
If you continue to be unable to make your student loan
payments you will face an ongoing negative credit
history, which may impede your ability to obtain
employment, rent an apartment, purchase insurance,
and, of course, access mortgage financing and other
credit.
Do I have to repay my loans if I file bankruptcy?
In short, yes. In 2005, the Bankruptcy Code was
amended so that all loans made for a qualified education
expense became exempt from discharge in bankruptcy
absent “undue hardship” to the borrower and his/her
dependents.
There is a heavy burden to prove “undue hardship",
which makes all student loans, whether federal or
private, virtually immune from discharge in bankruptcy.
What are my options for relief?
If you are struggling to repay your student loan debt, there
may be options available that can provide you the relief you
need. The options available to you depend on the type of
loans you have (federal or private), your current finances,
your student loan history, and even your current
employment status.
Typical relief options for federal loans include:
- Loan Rehabilitation
- Deferment or Forbearance of Monthly Payments
- Loan Consolidation
- Income Based or Contingent Repayment Plans
- Forgiveness of Debt for Public Service Employees
Relief options for private loans are at the discretion of your
lender and are generally limited to short-term forbearance
periods.
How do I get relief?
In general, you must contact your loan servicer, or the
school financial aid office through which you obtained the
loans, to request repayment relief. Your servicer or school
should advise you what relief options are available to you.
Please note that if your loans are already in default, your
options for relief will be limited. Federal loans must be
rehabilitated or consolidated through the Direct Loan
Program to cure the default before other options for relief
are available. There are no current cure programs that
eliminate a record of default for private loans.
www.dmcconline.org Educational SeriesDMCC 2013 Educational Series Available Online.
STUDENT LOANSRepayment Options
StudentLoans
Get Help With Your Student Loans From DMCC
Utilizing your recent credit report, DMCC will
help you identify your available relief options
for free, and provide you a no obligation quote
to help you obtain the option you desire.
You may then choose to obtain the option
yourself or retain DMCC to assist you. If you
choose to do it yourself, DMCC will point you in
the right direction and, if available, provide you
self-help materials to get it done.
www.dmcconline.org/studentloans/
Loan RehabilitationOption to clear the default on a federal loan and regain eligibility for benefits; requires consecutive voluntary on-time monthly payments as agreed. Not available for private loans.
Deferment or Forbearance of Monthly PaymentsOptions to have monthly loan payments temporarily suspended or reduced under certain circumstances. Private loans usually limited to one-time only for a short period of time.
Loan ConsolidationOption to consolidate multiple loans into one new loan; federal loans are typically provided lower payments over extended terms at the average interest rate of the original loans.
Income Based or Contingent Repayment PlansOptions for reduced payment plans on federal loans based on annual income; provide extended terms up to 25 years. Not available for private loans.
Forgiveness of Debt for Public Service EmployeesOption for public service employees to have federal Direct Loans forgiven after 10 years of consecutive payments beginning October 1, 2007. Not available for private loans.
Visit the National Student Loan Data System (NSLDS®) at www.nslds.ed.gov to view information about all of the federal student loans you have received and to find contact information for the loan servicer or lender for your loans.
You will need your Federal Student Aid PIN to access your information. You can request a PIN, or get a copy of your PIN, at www.pin.ed.gov.
The following are loan servicers for federally held loans made through the William D. Ford Federal Direct Loan (Direct Loan) Program and the Federal Family Education Loan (FFEL) Program.
Loan Servicer Contact
Aspire 1-855-475-3335
Cornerstone Education 1-800-663-1662Loan Services Direct Loan 1-800-848-0979Servicing Center EdFinancial Services 1-855-337-6884 EdManage 1-855-479-0490
FedLoan Servicing 1-800-699-2908(PHEAA)
Granite State Management 1-888-556-0022and Resources
Great Lakes Educational 1-800-236-4300Loan Services
Mohela 1-888-866-4352
Nelnet 1-888-486-4722
OSLA Servicing 1-866-264-9762
Sallie Mae 1-800-722-1300
If you have other types of federal student loans, here’s whom to contact for repayment information.
Federal Perkins Loans — Contact the school where you received your Federal Perkins Loan for details about repaying your loan. Your school may be the servicer for your loan.
Privately owned FFEL Program loans — Contact your lender for details about repayment options and tools for your FFEL Program loans that are not owned by the U.S. Department of Education.
ReliefFederal Loan Resources
Options
Federal Student Aid800-433-3243 / www.studentaid.ed.gov
Direct Loan Consolidation800-557-7392 / www.loanconsolidation.ed.gov
National Student Loan Access System 800-730-8913 / www.nslds.ed.gov