Defaulted Student Loans
The Consequences of Defaulted Student Loans
Since Student Loans are usually guaranteed by the Federal Government,
they do not disappear with time if the debtor ignores them. More recently, the government agencies and/or their collection representatives have
become very aggressive in the collection of monies due. Tactics used by these agencies
include, but are not limited to:
Garnishment of wages
Derogatory credit rating
Lawsuit initiated by the Federal Government
Heavy interest penalties calculated daily & high collection charges
Overly aggressive collection agencies
Loss of Income tax refund
Ineligibility for additional financial aid
Revocation of driver's license and/or professional
licenses
Debt Free provides solutions for defaulted student
loans that cannot be reached through traditional debt management or
consolidation. The Defaulted Student Loan Program
(DSLP) was created to fill a need for clients with defaulted federal student loans to assist them in completely resolving their student loan
issues.
Garnishment of wages: This is a popular tactic of collectors to collect
on debts. It is a simple process for wages to be garnished for a student loan and it
guarantees them to collect, unless you quit or lose your job. You could be facing a
percentage of your pay being taken every pay period in an amount that is much higher than
what your normal monthly payments would be. Even if you cannot live on the balance of your
paycheck, it doesn't matter, they will take the garnishment anyway. Some employers even
have policies to terminate employees if they receive a garnishment! We have been able to
stop the garnishment process with our program.
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Derogatory credit rating: One of the most detrimental entries on your
credit report is that of a defaulted student loan. You may not qualify for a
home mortgage or may pay an extremely high penalty to qualify. If you can qualify for an
automobile loan or other financing, you will be penalized with extremely high interest
rates, up to 51% in some states! As long as you owe the funds, the negative
entry could stay on your
credit reports indefinitely! Do not count on it coming off in seven years. With our
program, your defaulted student loan will be reported as paid in full and as long as you
make your payments on time, the new consolidation loan will report a current payment
history and you will begin to build your good credit again.
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The Consequences of Defaulted Student Loans
Lawsuit initiated by the Federal Government: In addition to the defaulted
status on your student loan, you could be summoned to court by the federal government
resulting in a judgment being placed on your record, damaging your credit even further.
These judgments can be renewed every seven years. You could avoid a lawsuit by
taking care of your student loan through our program.
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Heavy interest penalties calculated daily & high collection charges:
Most defaulted student loans carry high interest penalties that more than double the
interest you would pay on a current student loan. In addition, most collection agencies
will add collection charges raising your cost even higher. Some agencies will even charge
higher rates than allowed by law! With these kinds of costs you could pay on your student
loan indefinitely!
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Overly aggressive collection agencies: Although there are laws to protect
your rights in debt collection, there are many collection agencies that are very
aggressive in their collection tactics. You may experience high pressure phone calls at
both home and work that can be disruptive and frustrating. Most employers take a very
negative attitude toward their employees receiving collection calls at work. We work
directly with those collection agencies, so those calls will stop.
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Loss of Income tax refund: Seizure of
income tax refund is a common tactic of collection agencies. Our
program will stop this from happening.
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Ineligibility for additional financial aid: As long as you have a
defaulted student loan, you will be ineligible to receive any additional financial aid or
student loans to continue your education. Once your student loan is consolidated through
our program, you once again may be eligible for those programs.
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Revocation of driver's license and/or professional licenses: Many states are now revoking or refusing to renew the driver's license and/or professional license of individuals who have defaulted student loans. Eliminate this possibility with our program.
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