Posts Tagged ‘Student loan debt


Loan Consolidation as a Way Out of Student Loan Default


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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