The net effect is that your loans are more affordable and you're more likely to make payments on time.
Student loan deferment - under specific conditions you can defer payments on student loans.
Several such companies exist, and can be found online.
In general their services are free - eventually they plan to take you from a defaulted loan to a "current loan" status and consolidate your other loans.
The long-term benefit is reducing yout interest rate, monthly payments and student loan debt.
The short term benefit is that they will guide you through the processes of "fixing" your defaulted loan.
You will have a note on your credit report that your loans are in default.
Once your defaulted student loan is paid off, your credit report will reflect that the loan was paid off but will still inform any new lenders that you were once in default on that loan. Falling into default on your federal student loans will also cause your loans to be sold to a collections agency.
The most common qualification is for teachers in underserved areas or subject matter. You also lose your elgibility for other types of federal loans.The ramifications of defaulted student loans are outlined by the Federal School Aid Collections page.Once this happens, you will begin to receive many phone calls from the debt collector attempting to collect payments.Along with the harassing phone calls will come additional collection fees added onto your loan balance.[fsb-social-bar]For federal student loans the borrower must sign a promissory note prior to the disbursement of funds which is a legally binding agreement between the borrower and the lender.