Default Repayment Plan
Protect Yourself in Default by Making Regular Payments
Setting up a repayment plan acceptable to your federal student loan holder(s)Loan holderThe institution that holds the title to a loan and therefore has a right to collect on that loan. The holder of Federal Family Education Loan Program (FFELP) loans may be a lender, a guaranty agency, or the federal government. The holder of Perkins loans may be a school or the federal government. The holder of Federal Direct Loan Program loans is the federal government. may protect you from some of the consequences of default, like the initiation of the administrative wage garnishmentAdministrative wage garnishment - AWGThe situation where holders of defaulted federal student loans can, without your consent, initiate a process that requires employers to withhold up to 15% of the wages from your paycheck. The withholdings are applied to the balance owed until your student loans are paid, removed from default or satisfactory payment arrangements are established. process and certification to the U.S. Department of the Treasury to seize your tax refunds and government payments. Also, by establishing a repayment plan, you may become eligible for loan rehabilitationLoan rehabilitationA program offering borrowers an opportunity to bring their loans out of a default status and request the removal of the default from the national consumer reporting agencies. Payment amounts are based on a borrower's individual circumstances. Borrowers must make nine, full, voluntary, on-time payments over a 10-month period..
ECMC will work with you to find a repayment plan that you fits your situation. Making satisfactory regular payments may:
Other reasons why paying your loan(s) in full may be a good idea are:
- Stop the account from being placed with a third party collection agency
- Protect your state and federal tax refunds from being seized
- Avoid the initiation of the administrative wage garnishment process
Contact ECMC to set up a default repayment plan: