In this tough economy, an increasing number of college graduates (and college drop-outs) are falling behind on their student loans.According to the Department of Education, federal student loan defaults were up to 6.9% in 2009, well above their 2008 of 5.2%.For those carrying private loans, defaults hit 3.37% in 2008 versus 1.47% in 2006, according to Sallie Mae, one of America's largest providers of private loans.As you probably already know, defaulting on a student loan is a very serious matter.A federal college loan falls into default status if you are supposed to make monthly payments, but have not done so for 270 days.For those whose student loan payments are less frequent, a default occurs once you haven't made payments for 330 days.In either case, the government has the right to take your federal tax refund check or garnish up to 15% of your disposable pay in order to collect on a defaulted federal student loan.Defaulted student loans also negatively impact your credit.Appealing a Wage Garnishment.The good news is that you can appeal a wage garnishment and request a hearing on the matter in order to demonstrate why it is that you can't afford that the payments and wage garnishment your lender or guaranty agency is seeking.The U.S.Department of Education Debt Collection Services Office (DCS) holds the hearing after you fill out a "Request for Hearing" form regarding your wage garnishment, and send it to the Department of Education.Your hearing can be done in-person, over the telephone, or in writing; the choice is up to you.IMPORTANT NOTE. When you submit your Request for Hearing, make sure you also send another EXTREMELY IMPORTANT document.It is the "Financial Disclosure Statement," a 3-page document in which you must document your income and itemize all your expenses.The "Financial Disclosure Statement" form will be critical in the hearing/appeal process, and will be closely evaluated, so take the time to carefully list all your bills, and provide copies of those bills as requested.On page 3 of the Financial Disclosure Statement, you will notice a line that says. "Based on this Statement, I think I can afford to pay $____ per month." This is where you have an opportunity to essentially offer a counter-proposal to the Department of Education about your student loans.Regardless of what you've been asked to pay in the past, here is where you should realistically evaluate your budget and come up with a number that you can undoubtedly pay (without a huge financial strain) month after month.The Department of Education will make a decision about your case within 60 days after your hearing.But in the meantime, any wage garnishment that has already started will continue to be in force.Four Options to Cure a Defaulted Student Loan.Now, in order to get your student loan(s) out of default, you have four options..• Consolidate the loan(s) • Enter a loan rehabilitation program; • Pay the loan(s) off completely • Get the loan(s) totally discharged or cancelled.The last two are probably not realistic options.I know you don't have the money to pay off the loan(s).That's why you're in this predicament; and loan cancellations are rare (though they can be obtained).You'll likely have to "rehabilitate" your loan(s) or consolidate.Should You "Rehabilitate" Your Loans or Consolidate?Before you can consolidate, you have to bring your loan(s) out of default status.You do this by making just three monthly payments - on time, and in any amount that you and your lender agree upon.To find out if you qualify for loan consolidation, contact the Federal Direct Consolidation Loan Info Center at 800-557-7392 or go online to http.//loanconsolidation.Ed.Gov.If you call, the staff there should be able to tell you what your monthly payment will need to be for those three months while your loan is in repayment.The one drawback to consolidation is that your credit remains tarnished.Even though your loan will be paid off and listed as "paid in full" on your credit report, you'll get a new loan through consolidation and that previous default still shows on your credit report for seven years.An alternative, to fix your credit, and have all past negative information about your student loans completely deleted from your credit file is to go through loan rehabilitation.In a nutshell with rehabilitation you make 9 or 12 on-time payments on your student loans in an amount you can afford.You make nine monthly payments on Direct Loans and Federal Family Education Loans, or 12 monthly payments on Perkins Loans.This, in my opinion, is the preferred route as it will help you restore your credit in a big way, so your past default won't haunt you for years to come.For more details about various alternatives to cure your student loan delinquency, check out the Department of Education's guidebook called "Options for Financially-Challenged Borrowers in Default.".Get Help From an Ombudsman.Additionally, you should know that if you ever have a dispute with your lender or loan servicer about anything related to your federal student loans, there is a government agency that may be of assistance in resolving that dispute.It's called the Federal Student Aid Office of the Ombudsman.Always try to work things out first with your lender by using the online "Self Resolution Checklist" from the Ombudsman's office.But let's say you think your loan was mistakenly placed in default by your lender - maybe you were in school at least half-time, you had a loan deferment or forbearance, or you actually made payments on your loan - and you can't get a satisfactory resolution of the issue, then it's time to reach out to the Ombudsman's office.No matter what economic challenges you're facing, you don't have to live with wage garnishments and blemishes on your credit report because of defaulted student loans.Reach out for help today, and start the process of turning that college debt problem around.

Loans are almost inevitable for many people.If you ever want to buy a house, buy a brand new car, or go to college, there is a good chance you will have to take out a loan.Going to college is a huge source of loans for people, especially for those going to a very expensive college.When you get your tuition bill, the first thing you do is think about how you are going to pay for it.Do you get any financial aide? Do you have any scholarships that can help pay for it? Do you have any money saved from your job? Will your parents help pay for any of it? When all other sources of money are gone, you turn to loans.Now that you have graduated from college, you probably have a wide variety of loans to pay off.The Stafford loan is a very common student government loan.It is offered in a subsidized or unsubsidized version.If you were lucky enough to get an unsubsidized Stafford loan, the government has been paying the interest for you throughout college.You may also have a Perkins loan, Graduate PLUS loan if you went to graduate school, personal loans, private loans, and credit card debt from cards you used to pay for tuition, buy books, or use throughout college.These add up to a lot of money that you owe.After college, you either go to graduate school, get a job, or do both.Most people can't afford to continue to go to college full time, so they get a job and take graduate classes part time.If you get a well-paying job, that is great.You can quickly pay off your loans, save for a house, and get going with your life.If you decide to go for more professional schooling, such as medical school, dental school, or law school, you have several cheap living years ahead of you and more student loans to tack on.Usually this works out because you can make a lot of money with these careers soon after you graduate.If you are unfortunate enough to get a low paying job out of college, as many are, you can be in a tight situation.Even with a degree, it's hard to get a high paying job out of college.It will take years of experience, promotions, and raises to get to a comfortable income.The real problem is that most if the big expenses occur when you are young out of college.You need to pay off your loans and try to save.If you have lots of loans and the payments are outrageous, you can soften the blow.Try to consolidate your student loans.If you have several government loans as well as private loans, you can consolidate them into one loan with a lower consistent interest rate and effectively lower your monthly payments.This can be a huge help when you are just starting out.

If you're having trouble repaying your private student loans you can get help now with private student loan consolidation payments.A consolidation of student loans both consolidates all your private education loans into one loan and resets the loan's terms.Because, for the most part, you can't consolidate private student loans with federal student loans, the low federal student loan consolidation interest rates would not be applicable.However, it still is possible for you to pay less each month.You actually have quite a few options that can lower your monthly loan payments.1.Because your credit score strongly influences your interest rates, if your credit score has significantly risen since you applied for your loan, for example by fifty points or more, you might be able to get a lower rate when you consolidate your loans with a different lender.After doing your initial research, talk to your current lender and see if they can lower your interest rate on your current loans.They might consider doing this if they see that they could lose your business to a different lender.2.If you're a homeowner, compare the interest rate on your variable interest rate school loans to a fixed rate home equity loan rate.If interest rates look like they are going to go up, you may want to get a home equity loan and use the money to pay off your private education loan.Doing this would guarantee that your interest rates will not increase.On the other hand, it also guarantees that they won't go down if interest rates fall.And, worst case scenario, you could possibly lose your home, so be cautious with this option.3.You can consolidate student loans with an educational lender, such as the private consolidation loan divisions of either Wells Fargo, Chase, the Student Loan Network or others.These companies offer different repayment plans.Some offer up to 15-year term while others offer up to 30-year term.The interest rates they charge as well as fee structures also vary.Because these differences can amount to thousands of dollars in savings, most people that consider consolidating their student loans do extensive research and even do a spreadsheet analysis comparing the pros and cons of each offer before choosing the option that's right for them.Luckily, the Internet makes it very easy to get the information you need to make these comparisons.When you evaluate private lenders consolidation loans, make sure to find out.1.If their interest rates are fixed or variable.2.If there are any prepayment penalties, and.3.Whether or not there are any fees and what they are.

Applying for a college degree can be very expensive.Most students resort to financial aids so as to be able to pay for their tuitions.These student's loans offered by universities or colleges and private companies can be paid after finishing the degree however, the interest that will be accumulated in time can add to the burden of the students.A good option that can help students to manage their loans is by consolidating students loan.This repayment solution that can be availed by the students is a practical and easy way to pay for a loan.Consolidating students loan can be considered when students a long term repayment and fixed interest rate are offered in paying for multiple loans with high and varying interest rates.When consolidating students loan, all existing loans are combined into one new manageable loan from a single lender.It lowers the monthly loan interest rate and stretches the repayment term of loans.Consolidating students loan offers numerous benefits for students who are having trouble in settling their loans.It provides repayment relief with its light payment method.• Low monthly payment - Students with good credit record can get low interest rate of up to 50% and sometimes even more on their monthly loan dues.This will help students manage their other expenses easily since they are able to save hundreds of dollars monthly.• Reduced interest rate - The interest applied when consolidating students loan is the weighted average of all the existing loans that are being consolidated so there will only be a slight increase in loan interest.• Extended repayment term - Consolidated loans have longer repayment period that ranges from 12 up to 30 years enabling a student to pay for other expenses and enough time to find means of settling debts.• Hassle- free payment - Keeping track and paying for many loans from different lenders can be arduous.With consolidated loans, the students will only have to pay one loan to one lender, avoiding missed dues and stress from thinking what loans have been and have not been paid.• No prepayment for consolidation and penalty charge - Students who apply for consolidation on their loans will not be asked for an up front charge fee; no additional burden for students.• Good credit history - Failure in paying loans when students forget or miss checking their payment records can result to bad credit record that will give them difficulty when re-applying for loans in the future.Consolidating students loans enables students to pay for all loans on time since all loans are merged into one from a single lender.It improves credit history of students that will be advantageous in the coming years.When thinking of consolidating students loan, consequences should be carefully thought of before making a decision as it cannot be taken back once the application has been approved.Searching for better terms from different lenders will provide better choice.The flexible terms offered to students in consolidating students loans are of great help in relieving students' financial problem.Paying loans is no longer cumbersome for students who depend on financial aids to reach their dreams.

Graduation is supposed to be a reason to celebrate, but for many college graduates it marks the end of the deferment period for loan repayments, and the start of a time when real financial pressure needs to be faced.Consolidating private student loans is the best option for most graduates.Even for graduates who have been in the working world for a number of years, there is a chance to get onto a loan consolidation program that will lower the monthly repayment sum and ease the financial pressure on them.But whether a new graduate or a long-standing one, the right terms are needed to make sure the full benefits of the exercise are enjoyed.Clearing the student loans is the ultimate aim after all.For Recent Graduates.The terms secured when consolidating private student loans are always crucial.However, the best terms are often dependent on your situation.For example, a recent graduate will still have very little money at his disposal, as he concentrates on trying to get employment.So, agreeing a consolidation deal that is affordable is necessary.While a low interest rate is always preferred, the type of rate is also a key.Someone with very limited finances is best served with a fixed interest rate, since it ensures a set repayment sum every month.This makes it easier to fit into a strict budget, which is often needed when taking on loan consolidation programs.The alternative is to choose a variable rate, but this means the size of the repayment can change with the markets.When still seeking full-time work, the instability that a variable rate creates is the last thing that is needed.Consolidating student loans needs to be steady and sure.For Long-Standing Graduates.It can take a few years for a graduate to finally turn to a consolidation program.The great advantage of consolidating private student loans is that they can be secured even 5 years after leaving college, as the pressures of working life are taking over.Just as the type of rate is important for recent graduates, those who graduated years previously need to calculate whether a fixed or variable rate is best suited to their needs.While a fixed rate is ideal for keeping repayments constant, if the term of the loan consolidation program is long then a variable rate may be a good choice.Variable rates usually start quite low, and over a 10 or 15-year period, rates can fluctuate greatly but, on average, equate to less interest paid than a fixed rate.Still, take time to carefully assess what is affordable before making any final decision.If the balance on the remaining student loans is very high, then a longer term is needed to keep repayments down.So, a variable rate is probably best.Locating a Consolidation Program.There is no shortage of options available to those seeking a private consolidation loan, especially with online lenders so easy to find.The fact is that consolidating private student loans can turn out expensive if the right lender is not found.To this end, use the comparison websites to quickly locate the loan consolidation program.With private programs, there is no limit to the number of loans available to graduates, as a private lender will only look to make a profit.For federal programs, graduates must prove financial difficulties in repaying the existing student loans.The best lenders can be found online, where interest rates are lowest.But before selecting a consolidation program, make sure to establish the reputation of the lender.