Question : What Loan company will take over my federal student loans when the loans are in default?
What Loan company will take over my federal student loans when the loans are in default so I can go back to school?My loans are government loans from Saillie Mae. I owe them under $5000.I heard about this company that will take over your school loans from them but I don't know the name of the company.I am at the point where I can't get a federal student loan until I pay this off.
- asked by Dat_1_Chiq
All Answers:
Answer #1
When your federal educational loans are indefault, you have several options:You can repaythe loan in full.You can negotiate a new paymentplan with your lender.You can "rehabilitate" yourloan.You can consolidate your loan.Obviouslyoption one is rarely attractive or possible fordefaulted borrowers. Option two (renegotiate)should be investigated fully - most borrowers skipthis step, but it's probably the best option formost people. Call your lender and ask to speak tosomeone in the "Workout" Department. Explain yoursituation to them (there's nothing unusual aboutit) and ask what options are available to you forswitching to a graduated, extended orincome-sensitive repayment plan. If your lenderwill agree to change your repayment plan, a fewregular payments will get your default statusremoved, and the new plan may be easier for you tokeep up with.Option three (rehabilitation) isreally a specific form of a workout agreement. Itprobably won't help you much in your situation,because it requires an agreement between you andthe lender that will allow you to make 9consecutive on-time payments of some agreed-uponamount.Option four is everyone's favorite, but youmust absolutely understand what a consolidationloan will do. To keep this utterly simple - aconsolidation loan is a brand new loan that willpay off your old, defaulted loan. A consolidationloan MAY lower your monthly payments, butunderstand how this works. A consolidation loannever lowers your payments by wiping away some ofyour debt - a consolidation loan lowers yourpayments by stretching out the length of yourloan. If you pay less every month, you'll makemany additional monthly payments, and - in the end- you'll pay far more back than you would havepaid on the original loan.As an example: Suppose Ilent you $100 and you agreed to pay me back in 2weeks by paying me $50 a week. You came back a fewdays later and explained that you weren't going tobe able to afford to pay me $50 - is theresomething else we could do? "Oh, absolutely," I'dsay, gallantly. "Instead of paying me $50 a weekfor 2 weeks, how about if you only pay me $10 aweek for 17 weeks?"See - in the end, you'll pay meback $170 instead of $100 - that's how aconsolidation loan works. But remember - we're nottalking a $100 loan for a couple of weeks - by thetime you pay that $5000 loan of yours back overmany years, you'll pay a few thousand more thanyou might have paid if you didn't consolidate thatloan.I've attached some information aboutconsolidating from the Department of Education -take a few minutes to read it over. If you dochoose to go this route, be sure to consolidatewith a reputable lender (or directly with thegovernment) and not with some fly-by-nightoperation that you learn about from somepay-per-click site shilled on Yahoo! Answers. Goodluck to you!
- answered by NotAnyoneYouKnow
Answer #2
Right now it's taking over 9 months of consecutivepayments to get out of 'default'. I have no wayof knowing which lender is going to take over yourloan because quite frankly, student lenders havereally clamped down on who they will workwith.This can also mean that you could stay incollections until it's paid off.The collectionagency will work to find a lender to take yourloan back over once you're out of collections.Onceyou are deemed out of 'default', you can thenapply for student financial aid.
- answered by beut_els_guese
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