Consolidating defaulted perkins loan

Posted by / 11-Feb-2019 05:19

Consolidating defaulted perkins loan

One method of doing this is to use a credit card to repay the defaulted loan in full.

The borrower can then pay the credit card balance off over time.

Applicants hoping to receive a Pell Grant, along with any other type of federal student aid, must not currently be in default on any federal student loan.However, this might be very costly because the credit card interest rate is likely to be higher than the interest rate on the defaulted loan.Consolidating a loan in default will make the student eligible to receive a Pell Grant.Failing to enter student loan default rehabilitation can severely damage a borrower’s creditworthiness and can lead to court-ordered wage garnishments.If your wages are already being garnished, the student loan rehabilitation process can stop the income seizures and return control to you, but you must take the first step by contacting your collection agency and requesting rehabilitation.

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Borrowers who have student loans in default can rehabilitate the loans to not only regain Pell Grant eligibility, but also have the default status removed from their credit reports.