"Defaulting on student loans has a host of negative consequences, including credit damage and wage garnishment. The best strategy is to avoid student loan default in the first place, but if you’re already behind, don’t fret — there are ways to get your loans out of default. Federal borrowers can apply for a limited-time program called Fresh Start, or you could consider loan rehabilitation, consolidation or recovery," CNN reports.

... "'Struggling borrowers should reach out to their loan servicers to review their options or find ways to lower their monthly payment,' said Jill Desjean, senior policy analyst at the National Association of Student Financial Aid Administrators."

"This is especially important if you’re repaying private student loans, since they don’t typically come with built-in protections like income-driven repayment or deferment. Some private lenders offer payment modification or temporary forbearance to help you stay current on your debt and avoid default, but this is more likely to be successful if you’re proactive and contact them before you miss a payment."

... "'One way to set yourself up for success in student loan repayment is to plan ahead,' said Desjean. 'There are resources available to help borrowers estimate what their monthly payment will look like, so they can account for those payments among their total monthly expenses.'"

"One such resource is the Education Department’s Loan Simulator, which allows you to compare your monthly payments on different repayment plans."

NASFAA's "Notable Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Articles included under the notable headlines section are not written by NASFAA, but rather by external sources. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.

Publication Date: 5/7/2024