More Graduates Defaulting on Their Student LoansMay 4, 2010 - 10:56 am
The number of recent graduates who are caught in the student loan trap continues to rise, according to a new study released by the Department of Education.
Nearly 1 out of every 14 graduates
who began repaying their federal student loans between October 2007 and September 2008 defaulted on their debt by September 30, 2009, the study found, amounting to a 7% increase.
Since 2005, the number of graduates defaulting on their federal student loans has jumped 38%, according to Mark Kantrowitz, the publisher of FinAid, which tracks the student loan industry.
Anyone who defaults on their student loans (which generally means that they haven’t made payments for more than 270 days) will likely see their loans turned over to a collection agency, watch their credit scores plummet and may be barred from obtaining or renewing a professional license.
If you’ve defaulted – or are in danger of it - the best thing to do is to contact your lender to see if you can have your monthly payments reduced. Generally, your loan will be taken out of default if you make 9 out of 10 payments on-time and voluntarily (rather than through wage garnishment.)
blogs.forbes.com
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