From 2006, consumer credit debt grew approximately 70% and mortgage debt grew by 24%, but student loan debt grew by 232% (Fig. While student loan debt remains smaller than consumer credit debt ($4.1 trillion) or mortgage debt ($15.5 trillion), the rate of growth of student debt is significant. (Billion of Dollars), b: Debt Trends U.S. Click on a program below for more information.A Debt Trends U.S. There are a number of different programs available. Loan Cancellation, Discharge, and Forgiveness Programsĭepending on your circumstances, you may be able to have a portion or all of your Federal Direct Student Loans cancelled, discharged, or forgiven. Get more information or contact your loan servicer. If you ever find yourself in the unfortunate circumstance of defaulting on your student loans, there are options available to you. You may be charged court costs, collection fees, attorney’s fees, and other costs associated with the collection process.Your loan servicer can take you to court.This means your employer may be required to withhold a portion of your pay and send it to your loan holder to repay your defaulted loan Your tax refunds and federal benefit payments may be withheld and applied toward repayment of your defaulted loan (this is called a “Treasury offset”).You may not be able to purchase or sell assets such as real estate.It may take years to reestablish a good credit record.The default is reported to credit bureaus, damaging your credit rating and affecting your ability to buy a car or house or to get a credit card.You lose eligibility for additional federal student aid.You can no longer receive loan deferment or forbearance, and you lose eligibility for other benefits, such as the ability to choose a repayment plan.The entire unpaid balance of your loan and any interest you owe becomes immediately due (this is called “acceleration”).Defaulting on your Federal Direct Loans has serious consequences. You’re considered to be in default if you don’t make your scheduled student loan payments for at least 270 days. The last thing you want to happen is to default on your Federal Direct Loans. Please don’t hesitate to reach out to your loan servicer.

You can also discuss consolidating your student loans. They may be able to switch you to a more affordable repayment plan or grant you deferment or forbearance. You will want to contact your loan servicer as soon as possible. If you ever experience financial difficulty while repaying your student loan, you can ask for help. What to Do If You Experience Financial Difficulty Switching from the Standard Repayment Plan to one of the income-driven repayment plans can make your student loan payments more affordable. By default, all loans enter the Standard Repayment Plan when entering repayment. Once you enter repayment, you have the option of selecting one of the plans listed below. There are a number of different repayment plan available to you. If your circumstances change at any time during your repayment period, your loan servicer will be able to help.įind the Name and Contact Information for Your Loan Servicer Repayment Options Keep your contact information up-to-date so your loan servicer can help you stay on track with repaying your loans. Your loan servicer will work with you on repayment options (such as selecting a repayment plan or loan consolidation) and will assist you with other tasks related to your Federal Direct Loans. Department of Education to handle the billing and other services for your Federal Direct Loan on their behalf. A loan servicer is a company that is assigned by the U.S. Students may have a grace period longer than six months if they are on active duty in the military.īefore you enter repayment, your loan servicer will contact you about the date your repayment will begin and the monthly amount of each payment. This period of time is called a grace period. Repayment of your Federal Direct Loans begins six months after you graduate, leave school or drop below half-time enrollment.

Alumni student loan defaults rankings