Resources for Borrowers Having Trouble Repaying Education Loans

With the current economic situation in this country, we understand that some borrowers may be facing challenges in repaying their student loans.

Please bear in mind that you have both rights and responsibilities as a borrower. Know what these are so that you can responsibily resolve any issues that arise during repayment. You do not want to jeopardize your credit history as this will have long-term consequences.

Grace Period and Repayment counseling for Stafford and Direct Loan borrowers -- This online counseling session provides information about how to manage your student loans after college, whether your loans are in the grace period (payment will start soon) or already in repayment. The information can be especially beneficial if you are having difficulty repaying your student loans.

•  Federal Direct Student Loan Deferment Forms
• Learn more about the new Income Based Loan Repayment Program that debuted on July 1, 2009.

The Economic Surival Tips on NEFE's Smart About Money Web site provides information on what you can do if you are out of work and starting to panic.  It will show you what steps to take to minimize the money-related aspects of your layoff and prepare to move on to better days ahead.

• Non- profit agencies which provide a variety of services to individuals and families in need
• Services offered to Alumni through the Career Development Center

Stimulus and First Time Home Buyers Credit Payments Can Be Withheld to Pay Student Loans

 The American Recovery and Reinvestment Act of 2009 provides stimulus payments of $250.00 to recipients of Social Security, Supplement Security Income, Railroad Retirement Benefits and Veterans Disability Compensation or Pensions. These payments can be withheld if you have a defaulted federal student loan. Other federal payments (such as First Time Home Buyers Credit) may also be subject to offset to collect on defaulted federal student loans. Ask your loan holder how to make payment arrangements to avoid offset.

Resources

• The Federal Student Aid Ombudsman of the Department of Education helps resolve disputes and solve other problems with federal student loans.
  • Student Loan Default Facts and Repayment Tips for Struggling Borrowers

• "11 Steps to Relief from Federal Student Loans" - May 10, 2010
• Federal Student Aid Collections- handle the servicing of defaulted student loans that are administered under the Federal Family Education Loans (FFEL) program, which include Federal Stafford and Federal PLUS loans, and Federal Direct Loans Program. 
• Find Solutions for Student Loan Repayment Problems - from Mapping Your Future
  • Another resource is Solutions for Borrowers Who Are Having Trouble Repaying Educational Loans
  • Borrowers whose loans are serviced by Sallie Mae  should review the"After Graduation" on their website
• The "SLBA" Program -(The Student Loan Borrower Assistance Program ) - The Student Loan Borrower Assistance Project (SLBA) is a program of the National Consumer Law Center (NCLC). The National Consumer Law Center is America 's consumer law expert, helping consumers, their advocates, and public policy makers to use powerful consumer laws to build financial security and assure marketplace justice for vulnerable individuals and families.
  • Frequently Asked Questions About Federal Student Loan Rehabilitation
  • Five Steps the Government Can Take to Help Private Loan Borrowers
  • Too Small to Help:The Plight of Financially Distressed Private Student Loan Borrowers
• The Prolect on Student Debt

Policy Questions:

• Student Debt: Denying the American Dream - from the United States Students Association

• For Disabled Borrowers of Student Loans, Big Barrier Is Education Department

   

Additional Legislative Help:

 The  President signed the Higher Education Opportunty Act Technical Corrections Bill  (H.R. 1777) into law on July1, 2009.

Rehabilitating Borrowers

An important provision in the bill is designed to help borrowers who are eligible to rehabilitate their loans, but remain in default because disruptions in the credit market prevent many lenders from participating in the Loan Rehabilitation Program. The provision allows guaranty agencies to assign loans to the Secretary of Education if they have secured nine payments within 20 days of the due date for 10 consecutive months and the agency is unable to sell the rehabilitated loan due to current market conditions.

Updated May 7, 2012