Here’s what happens when you default on a student loan, what to do about it, and how to prevent defaulting on student loans if you’re on the brink.Financial hardship doesn’t always enter with a bang.And that leads to even more debt and a damaged credit score.If you’re facing student loan default, you’re not alone.Federal student loan consolidation basics How to consolidate federal student loans Benefits of federal consolidation Drawbacks of federal consolidation Private student loan consolidation (student loan refinancing) When you consolidate federal loans, the government pays them off and replaces them with a direct consolidation loan.You’re generally eligible once you graduate, leave school or drop below half-time enrollment.
I had no idea what I wanted to do career-wise — I had some vague idea of doing something in book publishing — but other than that, I was at a loss. I funded all of my college and graduate school living expenses on my own by waiting tables.Chances are, a student loan in default will stand in the way between you and refinancing.However, that isn’t the case for loans previously in default that have since been rehabilitated.When I began taking out student loans for university, I had a fool-proof five-year plan for paying them off. Although being a server in New York City can be wildly lucrative at the right establishments, I was working at the kind of restaurant where breaking 0 during a weekend shift was considered good money, and a “raise” meant helping ourselves to as much beer as we could handle without getting caught by the manager.I was going to go to graduate school, become an elementary school teacher, work in a high-needs public school for five years, and have the rest of my federal debt forgiven. If I stuck with the plan, I didn’t need to worry about those loans at all. We cannot reduce, amend or discontinue the deduction without written authorization from the U. Between paying for both my rent and living expenses, and saving a little bit of cash for going out, it felt like I had nothing left over for my student loan payments.Your repayment term will generally start within 60 days of when your consolidation loan is first disbursed and will be based on your total federal student loan balance, among other factors; click on the link below for more details.