The Department of Education and private loan lenders provide six-months of grace period to the students before they start making repayments on their student loans. This is for giving enough time to the graduates so that they can secure a job and prepare themselves to return the amount.
Looking towards the current situation of unemployment, we can guess why they fail to manage a job. Moreover, it leads them towards defaulted loan amounts.
Now, when the situation of defaulted loans arises, it triggers lots of horrid consequences, such as:
* Your wages can be garnished by the lenders.
* Your tax refunds may be withheld.
* Your credit score will be dismissed.
* Your professional license can get cancelled.
* You will not be able to have any more financial assistance.
The College Board announced that around 2/3 of graduates borrow student loans for having their bachelor’s degree every year. Students with a good job can manage returning the loan amount but the rest of them land into the above-mentioned troubles.
Looking towards such situation of defaulting student loans, President Obama has planned some way-out, such as:
First, Loan consolidation
Second, Expanded income-based repayments
But these two changes won’t help the borrowers with private student loans and the borrowers who are already in default.
So, it is advised to the students with federal student loans contact your federal loan lenders before landing into the horrible consequences of defaulting student loans. This will help you to finish the studies at your ease and having the joy of tension-free life.