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If you default on your student loan, the maturity date of each promissory note is accelerated making payment in full immediately due, and you are no longer eligible for any type of deferment or forbearance.
Eventually, unpaid defaulted student loans can have long-term consequences beyond just the loan directly. For example, your credit report will take a hit. Once the loan has been forwarded for collection your wages can be garnished and your federal income tax refunds can be withheld.
However, there are now more ways than ever before to repay your defaulted student loan and certain programs can even remove your loan from its defaulted status.
Some of them are listed below:
You can pay your defaulted student loan in monthly payments at an affordable rate.
You can consolidate your loan through the FFEL loan consolidation program or the William D. Ford Direct Loan Program.
If you have a defaulted student loan held by the U.S. Department of Education, you can mail a check or money order for default student loan consolidation.
You can also repay your defaulted student loan consolidation through credit card.
Certain federal student loans can be forgiven for specific types of service. The most common qualification is for teachers in underserved areas or subject matter.
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