However, there are now more ways than ever before to repay your defaulted student loan and certain programs even can even remove your loan from its defaulted status. Determining which repayment option that is right for you depends on what your objective is.
"I want to pay my defaulted student loan in monthly payments that are affordable to me."
All guaranty agencies and the U.S. Department of Education (ED) will accept regular monthly payments that are both reasonable to the agency and affordable to you. You should call 1-800-621-3115 (US Dept. Of Education)and one of customer service representatives will assist you with determining a repayment amount that is right for you.
"I want to reestablish my eligibility for additional federal financial aid and go back to school."
Please see Going Back to School for more information on this topic.
"I'm applying for a HUD (FHA) or VA loan and I don't qualify because of my defaulted student loan."
Your options for reinstating your eligibility to receive a HUD (FHA) or VA loan are: repay or satisfy the loan in full; consolidate your loan through the FFEL loan consolidation program or the William D. Ford Direct Loan Program; or rehabilitate your loan through our loan rehabilitation program. Since defaulted student loans have no statute of limitations for enforceability, you would remain ineligible to receive a HUD or VA loan until you complete one of the options mentioned above.
"My credit record is tarnished because of my defaulted student loan. Is there anything that I can do to improve my credit record?"Failure to repay your defaulted student loan can be damaging to your credit record. In fact, consumer reporting agencies may continue to report an account for 7 years from the opening date. However, there are several things that you can do to at least partially, and in some cases, fully restore your credit record. Your options for bettering your credit report include: repay or satisfy the loan in full; consolidate your loan through the FFEL loan consolidation program or the William D. Ford Direct Loan Program; or rehabilitate your loan through the FSA loan rehabilitation program.
If you want all negative credit reports made by the Department to your credit record, you must successfully complete the loan rehabilitation program.
"Can I pay my defaulted student loan held by the Department by credit card?"
Absolutely. They accept American Express, Discover, Master Card and Visa as repayment options. To repay a loan by credit card, please call the Department of Education at 1-800-621-3115.
What address do I send my payments to?
If you have a defaulted student loan held by the Department of Education, you can mail a check or money order to the address below. If you are at all unsure about the status of your loan, or who currently holds your loan, please call first at 1-800-621-3115 before sending in payment. You may also use Loan Locator to help you find out what lenders currently hold your loan(s).
National Payment Center
P.O. Box 4169
Greenville, TX 75403-4169
