06
Dec
12

Loan Consolidation as a Way Out of Student Loan Default

student-loan-debt

If you’re drowning in student loan debt you can consolidate defaulted student loans into a new Direct consolidation loan with a repayment plan tied to your income.  After obtaining a consolidation loan, the borrower gets a fresh start with a new loan.  After consolidation, you are eligible for new federal student loans, grants and even deferments.  The loans will also no longer be listed as in default on your credit record and no longer subject to tax intercepts, garnishments, or other collection efforts.

All federal loan borrowers may obtain Direct consolidation loans.  However, they must have at least one Federal Family Education Loan (FFEL) Program loan or Direct Loan Program loan (“Direct Loan”) to qualify.

There are some drawbacks including the following: your balance may increase after consolidation due to the addition of collection fees.  Also, you only get one shot – Direct consolidation loans cannot be re-consolidated.  To learn more please contact us here or call us at 619-800-3082.

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The content found on the financialfreshstart Blog is not legal advice and is purely for informational purposes. The Zarcone Law Firm does not guarantee the accuracy, integrity or quality of submissions. The information provided by the bloggers on this site may not represent the opinions of the Zarcone Law Firm or its affiliates. The information contained herein is not a substitute for the advice of an attorney.

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