Educational Series

Debt Management Credit Counseling Corp.501(c)3 Nonprofit Organization

3310 N Federal Hwy, Lighthouse Point, FL 33064Tel 866.618.DEBT (3328) / Fax 954.545.4510

Your Guide To Debt Freedom

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What happens if my loans go into default?

If you are delinquent making your student loan

payments, you should take advantage of the relief

options available to you before your loans go into

default. Federal loans go into default when they become

270 days past due, while private loans are generally

placed into default at 120 days past due.

Defaulting on a student loan can have a number of

negative consequences, including reduced credit scores,

assessment of collection costs, loan acceleration, wage

garnishment, and in the case of federal loans, seizure of

your tax refunds.

If you continue to be unable to make your student loan

payments you will face an ongoing negative credit

history, which may impede your ability to obtain

employment, rent an apartment, purchase insurance,

and, of course, access mortgage financing and other

credit.

Do I have to repay my loans if I file bankruptcy?

In short, yes. In 2005, the Bankruptcy Code was

amended so that all loans made for a qualified education

expense became exempt from discharge in bankruptcy

absent “undue hardship” to the borrower and his/her

dependents.

There is a heavy burden to prove “undue hardship",

which makes all student loans, whether federal or

private, virtually immune from discharge in bankruptcy.

What are my options for relief?

If you are struggling to repay your student loan debt, there

may be options available that can provide you the relief you

need. The options available to you depend on the type of

loans you have (federal or private), your current finances,

your student loan history, and even your current

employment status.

Typical relief options for federal loans include:

- Loan Rehabilitation

- Deferment or Forbearance of Monthly Payments

- Loan Consolidation

- Income Based or Contingent Repayment Plans

- Forgiveness of Debt for Public Service Employees

Relief options for private loans are at the discretion of your

lender and are generally limited to short-term forbearance

periods.

How do I get relief?

In general, you must contact your loan servicer, or the

school financial aid office through which you obtained the

loans, to request repayment relief. Your servicer or school

should advise you what relief options are available to you.

Please note that if your loans are already in default, your

options for relief will be limited. Federal loans must be

rehabilitated or consolidated through the Direct Loan

Program to cure the default before other options for relief

are available. There are no current cure programs that

eliminate a record of default for private loans.

www.dmcconline.org Educational SeriesDMCC 2013 Educational Series Available Online.

STUDENT LOANSRepayment Options

StudentLoans

Get Help With Your Student Loans From DMCC

Utilizing your recent credit report, DMCC will

help you identify your available relief options

for free, and provide you a no obligation quote

to help you obtain the option you desire.

You may then choose to obtain the option

yourself or retain DMCC to assist you. If you

choose to do it yourself, DMCC will point you in

the right direction and, if available, provide you

self-help materials to get it done.

www.dmcconline.org/studentloans/

Loan RehabilitationOption to clear the default on a federal loan and regain eligibility for benefits; requires consecutive voluntary on-time monthly payments as agreed. Not available for private loans.

Deferment or Forbearance of Monthly PaymentsOptions to have monthly loan payments temporarily suspended or reduced under certain circumstances. Private loans usually limited to one-time only for a short period of time.

Loan ConsolidationOption to consolidate multiple loans into one new loan; federal loans are typically provided lower payments over extended terms at the average interest rate of the original loans.

Income Based or Contingent Repayment PlansOptions for reduced payment plans on federal loans based on annual income; provide extended terms up to 25 years. Not available for private loans.

Forgiveness of Debt for Public Service EmployeesOption for public service employees to have federal Direct Loans forgiven after 10 years of consecutive payments beginning October 1, 2007. Not available for private loans.

Visit the National Student Loan Data System (NSLDS®) at www.nslds.ed.gov to view information about all of the federal student loans you have received and to find contact information for the loan servicer or lender for your loans.

You will need your Federal Student Aid PIN to access your information. You can request a PIN, or get a copy of your PIN, at www.pin.ed.gov.

The following are loan servicers for federally held loans made through the William D. Ford Federal Direct Loan (Direct Loan) Program and the Federal Family Education Loan (FFEL) Program.

Loan Servicer Contact

Aspire 1-855-475-3335

Cornerstone Education 1-800-663-1662Loan Services Direct Loan 1-800-848-0979Servicing Center EdFinancial Services 1-855-337-6884 EdManage 1-855-479-0490

FedLoan Servicing 1-800-699-2908(PHEAA)

Granite State Management 1-888-556-0022and Resources

Great Lakes Educational 1-800-236-4300Loan Services

Mohela 1-888-866-4352

Nelnet 1-888-486-4722

OSLA Servicing 1-866-264-9762

Sallie Mae 1-800-722-1300

If you have other types of federal student loans, here’s whom to contact for repayment information.

Federal Perkins Loans — Contact the school where you received your Federal Perkins Loan for details about repaying your loan. Your school may be the servicer for your loan.

Privately owned FFEL Program loans — Contact your lender for details about repayment options and tools for your FFEL Program loans that are not owned by the U.S. Department of Education.

ReliefFederal Loan Resources

Options

Federal Student Aid800-433-3243 / www.studentaid.ed.gov

Direct Loan Consolidation800-557-7392 / www.loanconsolidation.ed.gov

National Student Loan Access System 800-730-8913 / www.nslds.ed.gov