Student loan debt is crushing millennials. The burden of $1.4 trillion in debt is simply too much for many students to handle, and unlike most forms of debt, there is no escaping student loans. You can’t even get rid of your student loan debt through bankruptcy. The debt will continue to follow you your entire life.
And what happens if you choose not to pay your debt? You’ll one day be called into the human resources department at your job with your director standing in front of you with a letter from the Department of Education. The letter isn’t even a nice one.
Instead, the Department of Education is letting you know that they’ll start to garnish your wages to get their money back. So, what can you do to stop wage garnishment?
1. Make Payments On Your Loan
You need to make consistent payments on your loans. If you’re like a lot of people who forget to make payments on their loans, you have a few options. The best option is to set up an automatic payment, but you can also set up payment reminders.
If you keep paying the minimum payment on your loans, there’s no reason for the government to garnish your wages.
2. Consolidation Loans
Refinance Student Loans recommends that if you’ve defaulted on your loans, you should consider consolidating your loans. Consolidation will often lower the interest rates on your loan and put you on a path of being loan-free in the future.
There are also other options:
- Repay your entire loan (a pipe dream for most borrowers)
- Enter a loan rehabilitation program
Student loan consolidation is often the best bet because you’ll be able to enter a repayment plan that you can afford. You’ll have to show the ability to pay for your loans, on-time, for three months before you apply for loan consolidation.
3. Apply For Forbearance Of Deferment
Sometimes, there are no options available to make payments. There are times when a borrower is doing everything in their power, but they simply cannot make any payments. There are options to apply for deferment or forbearance.
These options are possible when you:
- Lose your job
- Suffer a medical emergency
- Suffer an economic hardship
You’ll need to contact your lender and apply for deferment or forbearance. These options allow you to avoid having your loans defaulted on in the first place.
4. Loan Rehabilitation Programs
You remember how we mentioned loan rehabilitation programs earlier? These programs are available to everyone, but they’re often not the first programs a person chooses. The problem is that you need to be in the program for a long time before you can get out of wage garnishment.
Loan officers will work with you and will find a payment that is acceptable for you. The payment is often 15% of your discretionary income. This will be your payment amount per month. You’ll then need to make nine payments over the course of a 10-month period before you’ve been “rehabilitated.” If you have very low income, you may be able to start a rehab program with payments as low as $10 a month.
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