| So you have finally made it out of school and you are | | | | have a $15,000 loan and you end up being 30 days |
| just starting to make your way into the real world. | | | | late then there can be a $900 late fee. |
| Unfortunately you may have many payments due on | | | | 3) Credit Bureau notice - As stated above they are |
| your school loans and it feels like you will be repaying | | | | mandated to send in your account activity to the credit |
| them for your entire life. While surfing the internet you | | | | bureau companies but they are also required to send |
| run into a website that offers information about | | | | you a notice 30 days before they report so you can |
| consolidating your school loans, it promises a low rate | | | | contest the validity of the late payments. If you do see |
| and quick turnaround. | | | | a problem with what was sent to you and you believe |
| Discipline and organization is what it is going to take to | | | | a mistake has been made then immediately contact |
| pay off your school loans. But what happens if you | | | | the credit bureaus as well as the government. |
| are one of those people that got the degree and have | | | | 4) Deferment or Forbearance - Deferment and |
| had a hard time getting steady employment or now | | | | forbearance are a way of postponing or delaying your |
| that you are out of school the loan payment is too high | | | | payments because of certain hardships or special |
| for you to pay? Many people look at using school loan | | | | situations. A deferment will allow you to stop making |
| consolidation as a way of putting off the day of | | | | your payments temporarily. For example, if you have |
| reckoning for paying for their degree. Many make | | | | to go to war, are enrolled part time at school, or are |
| horrible mistakes thinking these types of debts are the | | | | unemployed. Forbearance will help stop your payments |
| same kind that they have with their credit cards or car | | | | for now until you are done with school or find a new |
| payments. These are not debts owed to a private | | | | job. You can also extend the life of the payments |
| company, these are owed to the federal government, | | | | citing the hardship you are going through now if you |
| and the federal government has ways of punishing | | | | can prove it. The key is to stay on top of the situation |
| and collecting that your bank can only dream about. I | | | | you are in and communicate with the government |
| will outline some of the problems you could run into if | | | | regarding your loan. You are not eligible for these two |
| you ever think about treating these debts like anything | | | | benefits of having a federal loan if you are currently in |
| else you have in your financial life. | | | | default on your loan, so make sure that you do |
| 1) Defaulting on Your Loan - One of the biggest | | | | everything possible to make payments on time in case |
| warnings I can give is to do anything in your power to | | | | of financial trouble. |
| never default on you loan. If you do you could be | | | | 5) IMMEDIATE REPAYMENT - If you have lied about |
| forced into paying the full amount of your loan balance | | | | anything you put down on your paperwork the |
| right away. Obviously that is not going to be possible | | | | government can demand that you repay the entire |
| for you so the government will do whatever they | | | | amount of the loan instantly. Especially if the false |
| have to do to collect their money. This may include | | | | items allow you to get a better consolidation than you |
| garnishing your wages immediately or taking your next | | | | should have received. Again if you default on your loan |
| federal tax refund. They can even sue you and make | | | | than the payments will start immediately and the |
| you pay for all of the court fees and costs of | | | | government will do whatever they can to collect it. |
| attorneys they use to sue you. Most likely you will | | | | The best advice we can give you is that if you are |
| never be able to apply for another financial assistance | | | | going to consolidate your student loans make sure you |
| program again, which could be detrimental if you ever | | | | know what you are getting into, because the penalties |
| want to go back to graduate school. The punishment | | | | can be severe. Stay on top of what your options are |
| however does not stop there though because the | | | | for your school loan consolidation. If you are in a tough |
| default is quickly reported to all of the credit bureaus | | | | financial situation then start looking at postponing your |
| out there which will eventually affect your entire | | | | payments through the hardship clauses or deferment |
| financial life. | | | | program. Know that you are ultimately responsible for |
| 2) Collection Cost and Late Fees - The government | | | | finding out which program will work and repaying your |
| can also tack on a late charge after your loan is 30 | | | | loan. The government is just interested in receiving their |
| days past due, which is no more than 6 cents per | | | | money regardless of what you are dealing with in your |
| dollar of the loan. Let me put this in perspective, if you | | | | current circumstances. |