Education is important for anyone who wants to thrive professionally in this current generation. Many jobs require truly competent workers and only academic qualifications and experience can guarantee a person's competence. Students studying in higher education institutions are subject to paying high tuition fees to meet their studies. Those whose parents are unable to raise these huge sums of money usually resort to loans from their respective governments to help them pay their school bills. However, it is worth noting that students face many difficulties while settling their debts, with misrepresentation by collectors being the main problem after non-payment of loans. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get Original Essay A loan goes into default when it has not been paid for a certain period of time, usually between two hundred and seventy and three hundred and sixty days. Student loans have a grace period during which amounts must continue to be paid. Failure to pay during this period results in the government defaulting on the loan, meaning the debt will have to be settled immediately rather than over a period of time as was previously the case. In this state, a collector comes into play to maintain the process. This is what, in most cases, becomes problematic for those who hold the debts. The government normally has access to agencies that handle debt collection from students who took out loans during their years of study. These agencies act as a link between the borrower and the government. They take care of cases of non-payment of student loans and make every effort to ensure payment of debts. Sometimes they may use certain tactics that borrowers do not like. This implies that borrowers must know their rights and responsibilities to avoid being exploited. Understanding your legal rights when it comes to debt collection makes dealing with these collection agencies easier. The consequences of defaulting on a loan are serious. Once the loan defaults, a collection fee of between eighteen and forty percent of the outstanding balance is levied. In this state, a person's eligibility for federal financial support becomes questionable. Their salary, if they work, can be seized in favor of repaying the unpaid loan. Another disadvantage of a loan in default is that it will be shown on the borrower's credit reports for up to seven years. This limits their ability to get another loan in the future due to their poor creditworthiness. Ineligibility for loan deferral also becomes likely. It is important for borrowers to know their position in such situations, as required by law. Knowing the laws makes them realize how much they owe the government and how often collectors can contact them. Some agencies harass their clients by threatening them and imposing strict deadlines. This is exactly what poses a problem for student loan recipients. Students have their share of responsibility, as do debt collectors. The fear of arrest if the debt is not paid, a lie created by many agencies, is what boggles the mind of debtors. However, there are several ways to ensure that those who benefit from student loans do not find themselves in situations where their loans do notwill not be refunded. Rehabilitation is essential. This involves making arrangements with the Department of Education, on a payment plan. This is a one time arrangement. If the affected person cannot take advantage of this opportunity to clear the defect, it is impossible to rehabilitate a second time. A loan is rehabilitated when the required number of repayments are made within the stipulated time, otherwise the loan will not be rehabilitated. Student loan consolidation is also a way out of loan defaults. Consolidation involves bringing together the many different loan balances, including defaulted loans, and treating them as one. The advantage of consolidation is that the periodic payments become one. Before combining these balances, it is expected that the payment of the different education loans will be made separately. But with this plan in place, payments are structured to allow the borrower once for each period. This method is effective if the person concerned can fulfill the necessary condition of making three consecutive payments on time before consolidation. Students can also discharge their loans in bankruptcy. This is somewhat difficult, but can be done if the correct procedures are followed. Loan discharge is an act that occurs when one can prove that their income is too low to help them pay off their debts. People who earn sustainable income can also apply if their loans exceed a limit that they and their salaries can support. Student loans were not initially allowed for this action, but with changes to the law, this may still occur. If a student may be able to prove that they are experiencing undue hardship in repaying these loans. Repaying the entire amount owed is another option. It's a bit difficult because most of these loans are usually huge. However, fixing them immediately is a better option as the problem is permanently resolved. This can be done by transferring assets whose equity is equivalent to the value of the loans. Assets such as high-value vehicles, land and buildings can still come in handy when it comes to paying debts in full. This method seems inaccessible but that doesn't mean it can't work. With proper planning and assessment of its assets, this is achievable. The recovery status of a defaulted loan is also removed by making payments as quickly as possible, as soon as the situation begins. Making payments that meet desirable criteria under the law requires the borrower to relinquish collection status. If the payments meet the requirements, it means that failure to pay anything within two hundred and seventy days disappears. This method is effective if someone is smart enough to overcome the time challenge. Otherwise, the recovery status will remain as is, the procedures provided for by law being taken into account. Skeptics may wonder if consolidating a loan would make sense since it simply involves merging the total loans owed. This creates a lot of meaning, because bringing these balances together will mean it's a whole new plan. Periodic payments will need to be recalculated to determine the amount a student will be obligated to pay under this new arrangement. In the previous plan, before consolidation, it will be necessary to pay separately for each loan repayment with its own conditions. Once the sales are combined, it is as if they were one, because the conditions do not.