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Prevent your student loans to be defaulted

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Keep your student loan account current, prevent it to be defaulted.

Student loans are such liabilities which are, usually, not charged off easily. Seldom is it written off by bankruptcy. Once you receive the loan you have to pay it back. But most of the students find it difficult to pay multiple loans at high interest rate and as a result the account loses its ‘current' status. Here is a list of mechanisms for preventing your student loan defaults.

  • Consolidation – The main purpose of consolidation is to offer you low interest rate and long repayment period. Usually the rate of interest for a consolidation loan is much lower and as a result borrowers find it within their means.

  • Deferment – Under certain circumstances you can defer the repayment of your loan. Deferment is allowed if you are going back to school or continuing with medical internship or facing a financial hardship. Deferment is also allowed if you are involved in public services like serving armed forces etc.

  • Forbearance – Forbearance is another option to avoid defaults. Here you can holdup the payment of the principal amount. You have to pay the interest, but may delay paying the principal. It cuts the monthly installment down but extends the repayment period.

  • Discharge or cancellation – Your federal loan is forgiven for some special cases. You do not need to pay it back. Discharge is offered for some specific professionals, like teachers serving underserved areas. It will be reported as discharge to the credit bureau and any non payment history on the said account will be deleted. A discharged student loan does not make you inept to apply for more financial aid in future.
The above options you can adopt to keep your loan current, so that you have a smart credit history. If you start your career with a good score it is definitely an added advantage.

If you are already falling back with your payments, you can try a rehabilitation program to regain the current status.

Hope our community finds this useful. Please post your views here and keep us updated on this topic.


I have real experience how bad life can be when your education loan accounts are defaulted. It is very important to keep it current. Whenver I had to run through a tight budget, I stopped payments. I was not aware of the repayment options actually. I think deferment is a good option to avoid defaults.

Sub: #1 posted on Wed, 09/14/2005 - 17:19


This is good info to know Bryan!! I know a couple of people who defaulted on their student loans. It is tough to get anything when you owe the government. My cousin had her income tax refund taken from her when she defaulted on her student loans. There are so many ways to avoid this!!!:)

Sub: #2 posted on Wed, 09/14/2005 - 17:29

Rhonda28 Rhonda28

(Posts: 411 | Credits: )

Good one Bryan, let me learn something interesting from you everyday. Cheers

Sub: #3 posted on Wed, 09/14/2005 - 17:36

roxette roxette

(Posts: 4009 | Credits: )

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