After you graduate, leave school, or drop below half-time enrollment, you have six or nine months before you begin repayment. You will receive information about repayment and will be notified by your loan provider of the date loan repayment begins. If an account has been placed with our representatives then satisfactory repayment has not been established on the account. Now, we must work together to satisfy the remaining balance on these accounts.
How Did I Get Here?
The most common reason for an account to fall into a default status is due to failure to make payments, but other circumstances may lead to the same result. Your loan holder has decided, most commonly in a nine month period, the account is not being satisfied as agreed to in the signed contract. The process to get here has been as follows:
Repayment -> Delinquency -> Default
The delinquency period begins the day after missing a payment. During the first 15 days, the account holder had sent a written notice or collection letter and also provided an opportunity for communication in order to work on solutions. The notices and other tactics would have increased as the account became more delinquent. After nine months of this continued behavior without resolution your account was placed into a default status and placed with our company to aid in establishing a resolve. Now that you have reached this point the balance on your account has become due in full. Obviously, not all accounts will are at a point where they can be simply paid off with a lump payment, but this is where we can begin to work with you and make arrangements that can satisfy both parties.
Negative Actions That May Be Taken
Failure to work toward a resolution of your account can lead to one or more of the Government Collection Options:
The government has the ability to withhold all of your income tax returns, in an effort to satisfy your account, if you are in default. This could include both your State and your Federal depending on where you live and the types of accounts you have defaulted on. The I.R.S. keeps an electronic file of any with a defaulted account and will flag those accounts for offset, given that person is entitled to a return. Someone with accounts in default can expect to have all or a portion of their tax refund taken and applied automatically to federal student loan debt. (Read More)
To check your status for this program, you may contact the Treasury Offset Program Call Center at (800) 304-3107
Administrative Wage Garnishments
The government may require employers to deduct 15% of the account holders disposable paycheck toward repayment of their defaulted account. Garnishment may continue until the entire balance of the outstanding accounts are paid. This again is just another option used for those accounts where no voluntary payments arrangements have been established on a defaulted account. Once the garnishment has begun it may continue until the entire balance of the outstanding account is paid. The best way to avoid this occurrence is to continue to make regular and timely monthly payments. (Read More)
Professional License Revocations
States may allow professional and vocational boards to refuse to certify, certify with restrictions, suspend or revoke a member’s professional or vocational license. This could also lead to imposed fines, when a member defaults on student loans. The state laws apply to members of the various professions working in that state. Laws that suspend or revoke professional licenses because of student loan defaults typically give affected individuals notice of the action and an opportunity for a hearing. Some state laws may also provide certifications to be re-instated once the licensee enters into a loan repayment plan. (Read More)