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Despite this, many still wonder whether they can have their loans forgiven another way.
What Is a Student Loan Debt Settlement?
Settlements are commonly paid within one lump sum or a structured repayment plan with a reduced payment plan.
This process can help one reduce overall debt and eliminate student loans.
Are All Student Loans Eligible for a Debt Settlement?
Its important to note that not all student loan debt can be negotiated down into a settlement.
The current recovery rates percentage of disbursements on recovered defaulted loans, including interest and penalties, Tayne said.
As a result, its mainly private student loans that can be negotiated into a debt settlement.
This distinction is crucial for borrowers to understand their options.
What Steps Can You Take To Start the Process?
Next, reach out to whoever is in charge of collecting your loan.
If you are already in default, this could be a loan servicer, lender, or collection agency.
If youre unsure who owns your loan, it’s possible for you to check with theU.S.
Department of Educationby logging into yourMyAidpage.
Tayne said that one of the most important things you could do during this process is to practice patience.
This is one of the reasons this process can take as much time as it does.
Once a settlement agreement has been reached, be sure to get it in writing ASAP.
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