Working with your student loan servicer becomes especially important if you experience difficulty in making your monthly payment.
If default is inevitable
With most student loan servicers, you have more options available to you if you contact them before you default. Temporary hardship forbearance can gain you as much as six months of nonpayment before you even default. You may even be able to renew the hardship, depending on your type of loan. You may also be able to change to a different type of repayment plan with a more affordable monthly payment.
If default is inevitable, talk with your servicer. Don’t simply stop paying and stop communicating with them. Instead, take a proactive approach, call them up, and explain your situation. If you default, your servicer may transfer your loan to a collection agent. At that point, your options become more limited.
If you have already defaulted
You must stay in touch with your student loan servicer even if you can’t make the payment. If you default on your student loans, you have options. But those options are only available to you if you work with your servicer. Forbearance, deferment, temporary suspension, and consolidation may be good options for you. Contact your student loan servicer and see which of these solutions are available.
If you defaulted on your loans due to loss of income but you can now afford a monthly payment, call your student loan servicer. Work out a repayment plan. Many loan servicers have different types of repayment plans based on disposable income.
Working with your student loan servicer
It can be frustrating dealing with a servicer whose sole task is to ensure that you make your monthly payments without fail. What can be even more frustrating is a servicer that insists upon payment in full when you can’t afford to make any payment at all.
Still, you must try to work with your lender. Student loan debt is nondischargeable in bankruptcy, and your loans won’t just disappear by ignoring your lender. Working with your servicer, while often unpleasant, is better than defaulting without a recovery plan in place. Keep your cool and work out a plan with your servicer if you can.