How to Negotiate a Delinquent Student Loan Debt

When you fail to pay a student loan on time, the surcharges and interest start to mount. What you owe on a student loan can double in only a couple of years, and if you ignore it, it just gets worse. It can be paralyzing to think about the debt you've amassed. Fortunately, there are ways out. You can negotiate a lower payment on your delinquent student loans, and even negotiate to reduce or eliminate the fees and surcharges. The Federal Student Loan Direct Loan Servicing Agency also has easy-to-meet payment plans for low-income debtors.

Instructions

1

Assess your financial situation. Try to determine approximately how much you can afford to pay on your student loan per month right now. Use a student loan calculator to determine approximately how much your full payments would be. If possible, save up a month's full payment before negotiating your loan repayment, but do not delay negotiation more than a month.

2

Determine your student loan status. A delinquent student loan follows different rehabilitation rules than a more serious defaulted student loan. Most loans are in default by 270 days after the due date of your last missed payment. Do not let a delinquent loan become a defaulted loan.

3

Call 1-800-557-7392 if you need to consolidate several loans, and speak to an agent with the Federal Direct Consolidation Loans Information Center. You may have to rehabilitate some or all of your loans prior to consolidation.

4

Phone the Direct Loan Servicing Agency at 1-800-848-0979. Explain your situation to the agent. Let her know you also want to negotiate to get a delinquent student loan rehabilitated.

5

Negotiate. If the agent on the phone does not offer, ask for a waiver of collection fees and a partial forgiveness of interest charges or reduction in the total amount owed. Explain any special situations, such as illness, parental responsibilities, unemployment, underemployment or disability.

6

Arrange a payment plan, and get it in writing. Do not send any payments in until you have your payment plan in front of you. If you choose to go paperless, print out the online or emailed payment plan and keep it safe.

7

Pay on time. If you fall into delinquency or default again, it will be harder to negotiate reduced payments again.