student loans

Mar 12, 2010

Student loans after collections
by: Gerri

Tonya,

According to the Department of Education, you can restore your eligibility to receive additional Title IV federal financial aid by doing one of the following:

* Repay or satisfy your delinquent student loan in full.

* Make six agreed-upon monthly payments over a six month period. Your payment amount must be approved in advance by the Department. Every qualifying payment must be paid on time and you cannot make all six payments as a single lump sum payment. Once your eligibility to receive additional federal financial aid has been restored after making six consecutive monthly payments, you must continue to make timely monthly payments to maintain your eligibility or else it will be permanently lost until the debt is resolved entirely. In other words, you may qualify for this program only once.

* Consolidate your loan through the FFEL loan consolidation program or the William D. Ford Direct Loan Program.

* Rehabilitate your loan through our loan rehabilitation program.

Since defaulted student loans have no statute of limitations for enforceability, you would remain ineligible for additional federal financial aid until you complete one of the options mentioned above.

Tonya, please be careful about taking on more student loan debt and please avoid private student loans. When student loans are affordable, they can be a low-cost source of funding. But unlike other consumer loans, it is nearly impossible to wipe them out in bankruptcy, and the amount you owe can mushroom quickly.

I'd also encourage you to check out the IBR program at IBR.org to see if it can provide relieft.

student loans

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