Student loan question ?
The U.S. Department of Education has in formed me that my student loans were declared in default 2 years ago (!) and they're only telling me now. They have yet to give me a reason. Is that a thing? I was in communication with various lender organizations for years and they assure me that I am the model borrower. Does the U.S. Department of Education arbitrarily declare loans in default without reason at random? And not to inform people? Is this normal? Has this happened before? What can I do?-Lost
EDIT: First of all thank you for your quick responses. I applied for a grace period and the various lender organizations accepted; the U.S. Department of Education apparently did not care or get that message. I repeatedly tried talking to the U.S. Department of Education but they haven't answered a single question and just repeat the same thing over and over. I think I am talking to a bot.
- nancyLv 72 months ago
Federal student loans automatically go into default if the borrower has not made a payment for apx. 9 months. This is clearly explained in the Entrance Counseling and Exit Counseling sessions you were required to take, as well as in the Master Promissory Note you signed when you received the loans. You may have been considered a model borrower by other lenders in the past because your federal loan had not yet been declared in default. The D.O.E typically tries to contact a borrower several times when the loan becomes delinquent (i.e. when you fall behind in your payments) to offer options such as forbearance or an income based payment plan. When they do this, they use the contact information you provided them in the Exit Counseling session you were required to take when you left school. If you failed to do the Exit Counseling, they use the most recent information they have for you. However, it is not uncommon for students to move or otherwise change their contact information later and it may take quite a while for them to locate you. The fact that they did not contact you does not change the status of the loan. If you didn't make the payments, then it is a fact that the loan is in default and that doesn't change whether it takes 2 days or 20 years for them to catch up with you. It is possible for there to be an error in the record, so if you have made all the required payments, you should contact the servicer of the loan to discuss the matter and provide proof of payment. The servicer's name and contact information should be on any notices that were sent to you, but if you don't know who it is, you can find out from the National Student Loan Data System at https://nslds.ed.gov. If, in fact, you haven't made the payments you were supposed to, you have a few options for getting out of default. 1. You can pay the balance in full. 2) You can contact the servicer of the loan to set up a payment plan and make 9 consecutive, on-time payments under that agreement. 3. If you have a federal student loan that is not in default, you can consolidate the defaulted loan with the undefaulted loan. As part of this process, the defaulted loan will be paid off and replaced by a new Consolidation loan. You can find full information about default and your options at https://studentaid.gov.
- 2 months ago
Well have you been paying off your student loans or not? That is the piece of information that you need to provide us with. If they are in error meaning that you have in fact been paying off your student loan debt, you will need to get in touch with your lenders and clean this up. Of course if you have not been paying off your loans, you have only yourself to blame.