Americans now owe more on student loans than credit cards. Given the nation's high unemployment rate and slow economic recovery, it's not surprising that the default rate on student loans also is up. (The default rate for students who entered repayment between fiscal years 2006 and 2007 was 6.7%, the highest since 1998.)
There are ways to ease the burden of student loans. But if you've already starting missing payments and are in default (or expect to go into default soon), Jane Bennett Clark offers these strategies in the upcoming October issue of Kiplinger's Personal Finance:
Miss a single payment on a private student loan and you will go into default. Miss a few federal-loan payments and you will get dunning phone calls, but you won't go into default until after you have fallen 270 days behind schedule. Once that happens, the feds can demand immediate repayment of the full balance of the loan and wring payments from you by offsetting tax refunds and garnishing wages. Don't think Uncle Sam will drop the matter. The feds can and will stalk you indefinitly.
For the Full Article click the link: Default on a student loan?
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