Handling Your Defaulted Student Loan
Now that you have defaulted on your student loan, the maturity date of each promissory note has been accelerated making payment in full due immediately. This also takes away any eligibility of deferment or forbearance. Continued failure to repay a loan now in default may lead to several consequences for you over the long-term including but not limited to:
- Garnishment of Your Wages
- Offset of Your Federal and/or State Income Tax Refunds
- Losing Your Eligibility for Other Federal Loans Such as FHA or VA
- Denial for Title IV Funding
Luckily, there are now more ways to repay your defaulted student loan than ever before and certain programs can remove your loan from its defaulted status without you yourself paying the balance in full. Depending on your individual circumstances we will need to work together to figure out which option is best for your particular situation.
“I want to pay my defaulted student loan in monthly payments that are affordable to me.”
Of course, we want to establish a monthly payment schedule on your account and one of our account specialist representatives will assist you with determining a repayment amount that is right for you.
“I want to return to school for further education and would like to gain eligibility for federal funding to help me do so.”
We want to work with you and make sure that we can gain you this eligibility as quickly as possible. Depending on each accounts circumstances we can work toward this goal in a number of ways. Some accounts may be able to achieve this without the need of monthly payments.
“I’m applying for a FHA or VA loan and I don’t qualify because of my defaulted student loan.”
Your options for reinstating your eligibility to receive a FHA or VA loan are: repay or satisfy the loan in full; consolidate your loan through the Federal Family Education Loan (FFEL) loan consolidation program or the William D. Ford Direct Loan Program (Direct Loan Program). Since defaulted student loans have no statute of limitations for enforceability, you would remain ineligible to receive a FHA or VA loan until you complete one of the options mentioned above.
“My credit record is tarnished because of my defaulted account. Is there anything that I can do to improve my credit record?”
Failure to repay your defaulted student loan can be damaging to your credit record. In fact, the account will continue to be reported for 7 years. However, there are several things that you can do to at least partially, and in some cases fully, restore your credit record. Your options for bettering your credit report include: repay or satisfy the loan in full (settlements may be available), consolidate your loan through the FFEL loan consolidation program or the William D. Ford Direct Loan Program; or rehabilitate your loan through our loan rehabilitation program (this option is provided only on Department of Education accounts).
If you want the negative credit report made by the Department of Education removed, you must successfully pay off the account with an “in full” option.
“Can I pay my defaulted student loan by credit card?
Absolutely. We accept Visa or MasterCard as repayment options. To repay a loan by credit card, please call us at 1-800-377-1904 or visit Help U Pay and please have the following information ready and available:
- Credit card number and expiration date
- Credit card’s 3-digit verification code
- Customer service phone number on back of your credit card
- Billing address and phone number
- ERS account number (if available)
“What address do I send my payments to?”
If you have a defaulted student loan held by Enterprise Recovery Systems Inc, you can mail a check or money order to the address below. If you are at all unsure about the current balance of your account please call us first at 1-800-377-1904, prior to sending in payment.
Enterprise Recovery Systems, Inc.
840 S Frontage Rd
Woodridge, IL 60517
To ensure proper credit to your account, please include your name, social security number, address, and ERS account number (if available) with your payment.
“How can I be sure that this is the only account I need to address?”
The Loan Locator is a tool created to help you find out who currently holds your account(s). You will just simply need to fill in a few identifier questions and it will pull up all of your accounts and their current holder’s information.