Note that only federal student loans are eligible for consolidation and rehabilitation. Private student loans are eligible for consolidation through refinancing with a private lender, but you’ll probably have a tough time qualifying if you’re in student loan collections.
In this manner, can I default on private student loans?
Private student loans often go into default as soon as you miss three monthly payments (90 days). You can also default on a private student loan if you declare bankruptcy, default on another loan, or die.
Likewise, do private student loans go away after 10 years?
Private student loans don’t go away unless you pay them off, but in most cases, they’ll fall off your credit report after seven years. But keep in mind that lenders can still contact you to collect an old debt, even if it’s decades old and they can no longer take you to court over it.
Does credit consolidation ruin your credit?
Debt consolidation loans can hurt your credit, but it’s only temporary. When consolidating debt, your credit is checked, which can lower your credit score. Consolidating multiple accounts into one loan can also lower your credit utilization ratio, which can also hurt your score.
What to do if you need private student loan forgiveness
- Talk to your lender.
- Refinance your student loans.
- Explore private student loan repayment assistance programs.
- Optimize your federal loans (if you have them)
- Look for updates on private student loan forgiveness.
- Find new ways to increase your income.
Nelnet is a federal student loan servicer working on behalf of the U.S. Department of Education, the government agency that lends you or your child student loans.
Firstmark Services is a student loan servicer and a division of Nelnet, which is a company that manages federal student loans.
Federal student loan servicers, such as Nelnet and Navient Corp., are companies that collect payments, respond to customer service inquiries and perform other administrative tasks on behalf of the U.S. Department of Education.
Many people get confused over whether they’re the same company or not. Here’s the fast answer: No, but they used to be. These days, they are two separate companies. Sallie Mae is offers private student loans and Navient acts as a servicer for federal and private student loans.
Nelnet will continue servicing federal student loans through Dec. 14, 2023, getting a two-year extension on a contract that was scheduled to end this December. Nelnet will keep a significant piece of business that it had been in danger of losing for at least two more years.
Let your lender know if you may have problems repaying your student loan. Failing to pay your student loan within 90 days classifies the debt as delinquent, which means your credit rating will take a hit. After 270 days, the student loan is in default and may then be transferred to a collection agency to recover.
You may face a lawsuit if you default on your private student loans. If the lender has trouble collecting payment on a private student loan default, it may sue you (and your cosigner) for repayment.
Student loan settlement is possible, but you’re at the mercy of your lender to accept less than you owe. Don’t expect to negotiate a settlement unless: Your loans are in or near default. Your loan holder would make more money by settling than by pursuing the debt.