Default Student Loan

Seven Surprising Ways to Cut Student Debt

"Changing majors even just once can add on a year of school," says Heather Doe, associate director of marketing and communications for the Iowa College Student Aid Commission in Des Moines.

When choosing a major and a college, Doe says students should make sure the amount of debt they'll take on isn't disproportionately larger than the average starting salary in that major. To keep lenders at bay, Doe suggests figuring out what your monthly student loan payments will be after graduation and ensuring they don't exceed 8% of the typical starting salary in your field of choice.

If you've already put in a few years at a four-year institution, it's smarter to stay in school and keep taking on debt rather than dropping out. A study by the U.S. Census Bureau shows that full-time workers holding bachelor's degrees earn an average of $15,400 more per year than full-time workers with some college, but no degree. For workers holding associate degrees, the gap narrows to $14,000 per year. In both cases, a degree means substantially higher earnings prospects and therefore a higher likelihood you won't default on student loans.

Federal Stafford loans give students a six-month grace period between graduation and the time when they must start paying back their loans, reports the Department of Education , while private loans may not have any grace period. The bad news in both cases is that students may not have a job when the bills come due.

According to the Bureau of Labor Statistics, the average job search lasts more than nine months, meaning that you might get stuck with student loan debt you can't repay. Fortunately, students can take steps to reduce the job hunt time period and minimize the chance of defaulting on their loans.

"Many career placement offices offer free seminars for students on job searches and resume writing and job interviewing," says Pamela Rambo, founder of the education consulting firm, Rambo Research and Consulting, in Williamsburg, Va.

Rambo says students can also get a leg up on their competition by volunteering or interning while in college. A study by the National Association of Colleges and Employers reveals that this year companies expect to draw 40% of new college hires from internship and co-op programs.

If you'd like a sweet 25% discount on college costs, hit the books this summer.

"If you can get your degree finished in three years by taking more courses than the normal, average 12 credits or taking summer courses, that will save you money," says Kosboth.

What Happens If You Default on Your Student Loans : Lawyer Directory

Default. If you are entitled to a tax refund, the agency will notify you that the IRS proposes to keep all or some of your tax refund. To object, you must present written evidence to the agency, within 65 days of the date on the notice, of any of the following:

You have repaid the loan. You are making payments under a negotiated repayment agreement, or you have been granted a cancellation, deferment, or forbearance. You have filed for bankruptcy and your case is still open, or your loans wer discharged i n bankruptcy (which is extremely difficult). You are totally and permanently disabled. It is not your loan. You dropped out, and the school owes you a refund. You borrowed the money to attend a trade school, and you were either unable to complete your education because the school closed, or you were falsely certified by the school as eligible for the loan. The loan is not legally enforceable for any other reason (for example, your signature on the loan papers was forged).

live. In most states, the Department can go after your bank and other deposit accounts, and valuable personal property such as cars and antiques. The Department can also file the judgment with the county records office to create a property lien — a notice to the world that you owe money. In most states, a judgment entered against you creates a lien on any real estate you own. If you want to sell or refinance your property, you must remove all liens — usually by paying the lienholder — before the deal can close.