Despite the many resources available to help prevent students from defaulting on their loans, some students still end up becoming a statistic.
When accepting a loan, the borrower signs an agreement that sets up a payment plan. If students fail to make payments on their student loans as scheduled, they have defaulted on those loans and have therefore broken that signed legal agreement. Though there is usually a grace period before legal action is taken, defaulting is a serious issue.
Defaulting on a student loan can ruin your credit, which has serious negative impacts on future automobile and home purchases. Bad credit also makes it harder to open new credit card accounts and can result in higher interest rates.
“I think many students don’t realize the severity of neglecting to repay student loans,” said Dennis Kennedy, director of communications and marketing via email. “They don’t realize that it only takes a conversation with their servicer to work something out.”
The easiest way students can avoid defaulting is by keeping up on their payments. In the past few years, the college has started to offer free access to Iontuition, an online portal that allows borrowers to view their finances and keep an eye on payment due dates. While attending Hudson Valley, students are also encouraged to attend financial aid workshops, seek loan counseling, and use the numerous resources on the college’s website.
“There are many resources available at the college to help students understand student loans and their repayment responsibilities. Our Financial Aid counselors are always willing to help, we offer a series of informative online videos known as Financial Aid TV and we provide access to Iontuition,” Kennedy said.
The aid students receive to help keep track of their payments does not end once they graduate. “After a student leaves school, we prompt them to complete online exit counseling, which provides them with in-depth information regarding the terms of their loans and repayment options,” said Kennedy in an email.
There is also a third-party, known as the i3 Group, who will reach out to student borrowers to help them communicate with their loan providers in order to keep their student loans in good standing.
According to Kennedy, there are many options available if a student can’t make a payment on time, such as postponements and deferments. These options are only available, however, if students take the steps to seek them out. “Ask questions and don’t be afraid to ask for help,” said Kennedy. “And please don’t borrow more than what you need.”