ROHNERT PARK, Calif., Dec. 1, 2017 /PRNewswire/ -- After falling for several years, federal student loan defaults rose this year to 11.5 percent of borrowers. While this may be a warning for borrowers who are at risk, borrowers already in default may not care how many others are like them — they just want to get out of default. There are several options available for defaulted borrowers to change their situations. Ameritech Financial, a document preparation company that assists federal student loan borrowers in applying for repayment plans, helps eligible borrowers get out of default and into repayment.
"People who have federal student loans in default may think they are adrift without a lifeboat, but that's simply not true," said Tom Knickerbocker, Executive Vice President at Ameritech Financial. "There are tools that are available. Some people may just not be aware of them."
Defaulted federal loans, which are either held by or guaranteed by the federal government, can be remedied in a couple of ways. Ameritech Financial assists defaulted borrowers to enter in and maintain these pathways out of default. The two main ways out of default that the Department of Education offers, which do not involve immediate repayment of the entire balance due, are rehabilitation or consolidation. These two different paths have differing effects on a borrower's loan and credit report, but, if successful, they can both eventually land the borrower back into a repayment plan. These plans can also restore certain protections or opportunities that were lost while in the defaulted state.
The first option is rehabilitation. Rehabilitation involves formally agreeing to, and making, several consecutive repayments towards the loan. The payments are supposed to be "reasonable and affordable," based on a borrower's documented income. Ameritech Financial will work with borrowers and help them hammer out a reasonable payment with the agency that holds their loan. If the process is successful, the default will no longer appear on the borrower's credit report, though late payments will remain on the report. Default rehabilitation can only be performed once in the life of a loan, so it is essential that borrowers get enrolled in an affordable repayment plan. Once their loan is "rehabbed," Ameritech Financial will assist eligible clients in applying for an income-driven repayment plan so they can afford payments and remain in good standing.
The second option is consolidation. Consolidation pays off a student loan or loans and creates a new loan called a Direct Consolidation Loan. A borrower can make three consecutive full payments on the loan before consolidating to gain access to all federal repayment plans. Or, a borrower can consolidate first, but must then enter directly into one of the income-driven repayment plans (IDR). If borrowers who consolidate choose to enroll in an IDR, Ameritech Financial will help them prepare all the paperwork to do so. Consolidation, however, unlike rehabilitation, will not remove the default mark from a borrower's credit report.
A borrower's ability to get out of default depends on the careful completion of several steps in order to be successful. Ameritech Financial explains and guides borrowers throughout this process, advocates for borrowers, and prepares necessary paperwork along the way.
"These options for borrowers in default can be incredibly helpful," said Knickerbocker. "They don't solve every issue, but they can really make a huge difference for borrowers and get them out of a tough situation. Ameritech Financial can assist them as they get out of default, and beyond, as they get into repayment. We're here for our clients for the long run."
About Ameritech Financial
Ameritech Financial is a private company located in Rohnert Park, California. Ameritech Financial has already helped thousands of people with financial analysis and student loan document preparation for federal student loan repayment programs offered through the Department of Education.
Ameritech Financial is a member of the Association for Student Loan Relief (AFSLR), and each representative on the phone has received the Certified Student Loan Professional certification through the International Association of Professional Debt Arbitrators (IAPDA).
Ameritech Financial prides itself on its exceptional Customer Service.
To learn more about Ameritech Financial, please contact:
5789 State Farm Drive #265
Rohnert Park, CA 94928
SOURCE Ameritech Financial