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Spokesperson, National Association of Student Financial Aid Administrators
Justin Draeger is Assistant Director for Communications with the National Association of Student Financial Aid Administrators (NASFAA). Prior to joining NASFAA, Justin worked as the lead analyst for the Michigan Guaranty Agency. Justin began his career in student aid 10 years ago working as the financial aid administrator for the Douglas J Aveda Institute in East Lansing, Michigan. Justin earned a Bachelor’s of Science Degree in Resource Management from Brigham Young University and his MBA in Finance from Baker College. He has presented at several conferences in both the financial aid and business management fields and continues to publish nationally. Justin has been tapped for his expertise on student financing by CNBC, Fox Business News, The New York Times, Wall Street Journal, Boston Globe, Kiplinger, Business Week, National Public Radio, and more.
What should I do if I have defaulted on a student loan?
Justin Draeger with the National Association of Student Financial Aid Administrators explains what to do if you have to default on a student loan.
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Host: What should I do if I have defaulted on a student loan?
Justin Draeger: If you are already in default, there is just a couple of things that you can do, as it turns out as you go from good standing to delinquent to default, you actually end up with fewer options. Once you are already in default you only have a couple of options that you can do to bring your loan current. The first thing is to pay the loan off in full, pay your balance that is generally going to be difficult for most students who are in default because you are in default for a reason. You couldnt keep up with your payments, there are rehabilitation programs that are available to you where you can pull your loan out of default if this is the first time that you have been in default and your first crack at rehabilitation with just nine consecutive payments.
There are other provisions that collection agencies, guarantee agencies or the US Department of Education will provide you that will allow you to at least make payments and stay current on your loan while it's in default. The best option of course is to not let it get that far dont allow your loan to go into default.