managing student loans
A Single Second Chance
If you default on a federal student loan, the system offers a single chance for you to get out of default by enrolling in a reasonable and affordable repayment plan. You and your current loan holder work together to set up this plan. If the loan holder proposes a plan that costs more than you can afford, what can you do?
- Accept the plan and take out a payday loan to cover the expense.
- Document your living expenses by sending the loan provider your budget.
- Threaten to take the loan holder to court.
"B" is correct. Once a repayment plan is approved, it's important to make your payments on time and in full. After you make nine on-time payments in a row, your loan will be taken out of default, the default will be taken off your credit record, and the default consequences mentioned earlier will be reversed.