A Perkins Loan default is a serious issue that requires your immediate attention in order to protect your credit and ability to gain access to federal educational loans. Perkins loans are issued by the United States Department of Education and are backed by the full faith of the United States Government. In fact, the FDSLP or Federal Direct Student Loan Program is the only federally-backed loan program in the country,
and loan administrators have long taken a strong stance against students who default on Perkins loans. If you’re having trouble making the payments on your federal student loans, the following are steps you can take to minimize the damage and prevent an outright default.
First, you’ll want to make sure to stay in contact with your Perkins loan administrator if you experience any type of financial difficulties. Many students simply ignore calls, emails and letters, ultimately making the problem worse when additional fees, penalties, and compounded interest is added to the loan amounts. These can build up very quickly if you are not in touch with loan officials. However, if you stay in touch and let them know you are having difficulties, these fees can be turned off in order to help you maintain your obligations.
As soon as you start to have difficulty making payments, you should ask for a deferral or forbearance. Federal student loans offer these unique options to help students in times of financial difficulty or change, and in many cases can provide reprieve from payments for six months, a year, or even more in some cases.
If your financial situation has changed so much that you are no longer able to afford the monthly payments, calling a loan administrator or financial aid representative can be exceptionally beneficial. In many cases, federal student loan terms can be readjusted to make payments lower for students that are struggling.
Finally, remember that you signed an MPN or Master Promissory Note. This means that it’s your responsibility to be…responsible. If you are having difficulty repaying your federal Perkins loan, you should take action right now.
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