This presentation reveals the reasons why one of the worst mistakes you could make would be to default on a federal loan including the fact that not even a bankruptcy will discharge it. It also covers Direct Consolidation Loans as one of three ways to get out of default

1. Helpful Financial Information from National Debt Relief …
Your Worst Mistake
Ever Could Be To
Default On a Student
Loan
Do you have a student loan or loans? If you’ve
been out of school for six months or more you
should be paying them back… unless. What's
the unless? It's unless you have a loan
deferment, forbearance or if you were able to
get the loan cancelled. (Continued …)
Brought To You By:

2. Helpful Financial Information from National Debt Relief …
Note: If you believe you might be eligible for any of these three options, contact the
organization that services your loan to discuss it.
Serious consequences
The reason why it would be a real mistake to default on your student loan is because it
would have serious consequences. The financial institution that owns your loan, your
school, the federal government or your loan guarantor could all take action to recover the
money you owe. This makes it important for you to understand what a problem it can be
if you miss a loan payment, what default means and what the consequences of going into
a default would be. You also need to know how to get a loan out of default.
Definition of default
You'll remember you were required to sign a promissory note when you took out your
loan. If you fail to make payments on it as scheduled according to that note, you will be
in default. Technically, you are default the day after you miss a payment. Your
delinquency will continue until you have made all of your payments and brought your
loan up to date. Your delinquency will be reported to the three major credit bureaus after
90 days, which will cause your credit score to drop dramatically.
The consequences of going into default
As noted above, if you go into default, your school, the federal government or the bank
that loaned you the money could take action against you to recover it. In addition, there
are other consequences of default that are really severe. For one thing, the unpaid balance
of your loan and any interest that has accrued will be immediately due and payable. You
will lose your eligibility to get forbearance, deferment and choose your payment plans.
In addition, you will no longer be eligible to get any additional federal student aid. It is
likely that your loan will be assigned to a collection agency. It's possible that your federal
and state taxes will be withheld through what's called a tax offset. This means that the
IRS could take your federal and state tax refunds to help collect on your defaulted student
loan debt.
Moreover, your debt will increase due to the additional interest, late fees, collection fees,
court fees, attorney fees and other costs related to the process of collecting from you. The
federal government could request your employer to withhold money from your pay and
send it in to help pay off your loan. This is called wage garnishment. The holder of your
loan could take legal action against you so that you might not be able to purchase or sell
any asset like real estate. And finally, if you're a federal employee you could have 15% of
your disposable pay offset toward repayment of your loan through a Federal Salary
Offset.
In short, the consequences of defaulting on a student loan can be disastrous.

3. Helpful Financial Information from National Debt Relief …
Not even bankruptcy can help
What makes a student loan debt different from any other type of unsecured debt is that
you can't get it discharged through a chapter 7 bankruptcy. If you were to file for a
chapter 7 bankruptcy you could get other unsecured debts such as credit card debts,
medical bills and personal loans discharged but not student loan debts – unless you could
convince the bankruptcy judge that you're in such dire financial circumstances there's just
no way you could ever pay off the loan. However, it’s very, very rare for a bankruptcy
judge to discharge a student loan debt.
How to get out of default
If you default on a student loan the consequences can be serious but not the end of the
world. There are ways to get out of default.
For one thing, you could repay the loan in full. A second option is what's called loan
rehabilitation. If you had a Direct Federal Loan then you and the Department of
Education (ED) would have to agree on an affordable and reasonable payment plan. In
the event you had a Perkins loan, you will need to contact your school. In either event,
your loan will be rehabilitated after you have voluntarily made the agreed-upon payments
on time and a lender has purchased your loan. Do be aware that if there are outstanding
collection costs these may be added to your principal balance.
The benefits of rehabilitation
If you rehabilitate your loan, you may regain eligibility for the benefits that were
available on your loan before you defaulted. These could include deferment, forbearance,
a choice of repayment plans, loan forgiveness and even eligibility for more federal
student aid. Plus, the default status would be removed on your loan and this will be
reported to the national credit bureaus. This would also eliminate the possibility of wage
garnishment or the withholding of your income tax refund.
Direct Loan Consolidation
A third option – beyond loan rehabilitation or complete repayment – is a Direct Loan
Consolidation. This would allow you to pay off all the outstanding balance or balances on
your federal student loans with a new single loan that would have a fixed interest rate.
You could even include a defaulted federal student loan in a Direct Loan Consolidation
after you've made arrangements with the ED and have made several voluntary payments.
In general, you would have to make at least three consecutive, voluntary and on-time
payments before you could include that loan in a consolidation.
Do be aware that a guaranty agency might charge collection or late fees up to 18.5% of
your outstanding loan – including the interest and principal. These fees would then
become part of the consolidation loan. As an example of this if you had a defaulted loan
of $8500, plus $1500 of accrued interest this would equal $10,000. Fees of $1850 could

4. Helpful Financial Information from National Debt Relief …
then be added to that $10,000, meaning that the consolidation loan would be for a total of
$11,850.
What types of loans can be consolidated?
Most federal student loans, including the following, are eligible for consolidation:
• Subsidized Federal Stafford Loans
• Unsubsidized Federal Stafford Loans
• Direct Unsubsidized Loans
• Direct Subsidized Loans
• PLUS loans from the Federal Family Education Loan (FFEL) Program
• Direct PLUS Loans
• Supplemental Loans for Students (SLS)
• Federal Perkins Loans
• Federal Nursing Loans
• Health Education Assistance Loans
• Some existing consolidation loans
The benefits of Direct Loan Consolidation
In addition to getting you out of the default, having a Direct Loan Consolidation would
simplify repayment because you would have just one payment to make each month. It
should also lower your monthly payments because you would have up to 30 years to
repay the loan. It's also possible that you could access alternative repayment plans that
would not have been available before. However, keep in mind that if you increase the
length of your repayment period, you'll make more payments and pay more in interest.
Plus, you will lose any borrower benefits that were offered with your original loans.
The requirements for getting a Direct Consolidation Loan
In order to get a Direct Consolidation Loan, you must have at least one FFEL Program
Loan or Direct Loan or that is in repayment or a grace period. To consolidate a defaulted
loan means you must make repayment arrangements that would be satisfactory to your
current loan servicer or you will need to agree to keep your Direct Consolidation Loan
under the:
• Income-based repayment plan
• Pay as you earn replacement plan, or
• Income-contingent repayment plan

5. Helpful Financial Information from National Debt Relief …
What is the interest on a Direct Consolidation Loan?
If you get a Direct Consolidation Loan, it will have a fixed interest rate for the term of the
loan. This will be based on the weighted average of the interest on the loans you’re
consolidating, rounded up to the nearest 1/8th of 1%.
When you begin repayment
You will begin repaying a Direct Consolidation Loan 60 days after the loan is dispersed
or possibly sooner. Your loan servicer will tell you when the first payment is due. Your
payment term could range from 10 to 30 years, depending on the amount you
consolidated, your other student loan debts and the repayment plan you select.
In the event you're having a problem with your student loans, National Debt
Relief has a program that can provide you with consultation services. Their
trained experts can advise you about you student loan repayment options based
on the type of debt that you have and your employment situation. They will even
help you with the paper work involved. This service has a one time fee that will be
placed in an escrow account. When you are satisfied with the service and the
documentations done on your behalf, that is the only time the fee can be released.
There is no upfront or recurring maintenance fee.

6. Helpful Financial Information from National Debt Relief …
Does this sound familiar?
• You are tired of worrying about money…
• You are losing sleep due to mounting credit
card debt…
• You are fighting with your partner about the
bills…
• You are living paycheck to paycheck…
• You are falling behind on your debts…
• You are losing hope…
It’s time to talk with National Debt Relief!
Go To
http://www.nationaldebtrelief.com/free-
student-loans-quote-now/?src=PDFs
Or Call 1-888-275-4499