Manage default
How do I know if my federal student loans are in default?I was told my loans are in default, but I think it’s a mistake. What should I do?
Why were wages taken from my paycheck?
Are there any additional costs to my loans after they default?
How can I get collection agencies to stop calling me about my defaulted loans?
Why was my tax refund and/or Social Security payment taken? Can I get it back?
I want to go back to school, but my loans are in default. Can I get financial aid?
How does a defaulted student loan affect my credit?
Can I get federal tax credit for paying tuition or interest on my student loan?
What is a credit score?
What is a credit bureau?
What is a credit report?
Why were wages taken from my paycheck?
I was turned down for a loan because of student loan default. How can I fix this?
How do I correct mistakes on my credit report?
How do I know if my federal student loans are in default?
You might have received a Notice of Default. Perhaps your federal tax refund was taken, or wages were withheld from your paycheck—any of these actions toward you indicate that your loans are in default. Your loan holder can tell you the status of your loans and help you understand your options if you are in default.
If you don’t know who holds your loans, go to the National Student Loan Data System (NSLDS), which is the central database for all federal student loan information. If ECMC holds your loans, contact us.
I was told my loans are in default, but I think it’s a mistake. What should I do?
If you believe your student loans are not in default, contact your loan holder. You will be required to provide documented proof of the error. This could include school records showing your enrollment status, a copy of an authorized deferment or forbearance, or front and back copies of loan payment checks that have been cancelled and you believe were not applied to your loan balance.
If you don’t know who holds your loans, go to the National Student Loan Data System (NSLDS), which is the central database for all federal student loan information. If ECMC holds your loans, contact us.
Why were wages taken from my paycheck?
Wage garnishment—funds deducted from your paycheck without your consent—is permitted by law if you default on your federal student loans. If you do not make voluntary payments on your defaulted student loans, your wages can be garnished in order to pay off the debt. Learn more >
Are there any additional costs to my loans after they default?
Yes. Unpaid interest that accrued on your loans prior to the default is capitalized (added to the principal balance of the loans), creating a situation in which you are charged interest on a higher principal balance. Also, as required by federal regulations, collection costs are added to your defaulted loan balance 60 days after default. Collection costs may include attorney fees, collection agency charges, and court costs.
How can I get collection agencies to stop calling me about my defaulted loans?
You are being contacted by a collection agency because you have not made satisfactory arrangements to repay your defaulted student loans. The collection agency will continue to contact you until such arrangements are made. Being contacted by a collection agency is just one of the consequences of default. Learn more >
Contact the collection agency or your loan holder right away to discuss your options.
If you don’t know who holds your loans, go to the National Student Loan Data System (NSLDS), which is the central database for all federal student loan information. If ECMC holds your loans, contact us.
Why was my tax refund and/or Social Security payment taken? Can I get it back?
If you default on your student loans and do not make arrangements to pay them back, federal regulations require that any government payments for which you are eligible be taken and applied to your loan debt. This is commonly called offset or tax offset, but it could also be called IRS offset or Treasury offset.
You may apply for a refund or return of these funds if the offset:
- Was done in error
- Is causing you extreme financial hardship
- Occurred while you were in bankruptcy
Contact your loan holder to discuss your situation. If you don’t know who holds your loans, go to the National Student Loan Data System (NSLDS), which is the central database for all federal student loan information.
If ECMC holds your loans, follow the links below for more information if you are:
I want to go back to school, but my loans are in default. Can I get financial aid?
When you defaulted on your student loans, you automatically forfeited your eligibility for additional Title IV financial aid. Therefore, you must resolve your defaulted student loans with your loan holder before you can be eligible for more financial aid. To determine your options, contact your loan holder right away.
If you don’t know who holds your loans, go to the National Student Loan Data System (NSLDS), which is the central database for all federal student loan information. If ECMC holds your loans, contact us.
Once you have resolved your default status with your loan holder, your school may request additional documentation from your loan holder commonly referred to as a Title IV eligibility letter or clearance letter. If ECMC holds your loan, you can request a Title IV eligibility letter online by following this link. You may also request a Title IV eligibility letter by contacting an ECMC representative at 1-855-810-4920.
How does a defaulted student loan affect my credit?
A credit score indicates how reliable a person is in paying off his or her debts. A default on your credit history severely damages your credit score and remains on your credit history for up to seven years, making it difficult to find anyone willing to give you credit for anything from credit card purchases to a car or home loan. If they do give you a loan or credit, chances are it will be at a high rate of interest.
Can I get federal tax credit for paying tuition or interest on my student loan?
You may be able to take advantage of a number of federal tax benefits, including credits, deductions and savings incentives to offset your costs for college or career training. For more information on the most common benefits, including the student loan interest deduction, download our one-page overview, Federal Tax Benefits at a Glance.
Also, you will find details on all the tax benefits at the Internal Revenue Service website.
What is a credit score?
A person’s credit score is considered predictive of the person’s future credit performance. A credit score is a number, generally between 350 and 850, that reflects the credit history shown in your credit report. To arrive at a single score, a credit bureau assigns numerical values to specific pieces of your personal financial information, such as bankruptcy filings, outstanding debt, the number of inquiries on your credit history, the number of open accounts, etc. These values are put through a series of mathematical calculations to produce a single number—the credit score. The lower the score, the worse your credit history is and the harder it is to obtain loans for things like a car or a home. In some cases, a low score can also hinder your eligibility for employment.
What is a credit bureau?
A credit bureau is an agency that stores credit information on individuals and produces a report to creditors on the information gathered. Credit bureaus assign a score representing your credit worthiness (your ability to borrow money and pay it back). This information is then available to future employers and creditors.
What is a credit report?
A credit bureau report is a detailed list of your credit history including information about the amount you have borrowed (all debt, including student loans) and your repayment patterns and payment history.
Why were wages taken from my paycheck?
Wage garnishment—funds being deducted from your paycheck without your consent—is permitted by law if you default on your federal student loans. If you do not make voluntary payments on your defaulted student loans, your wages can be garnished in order to pay off the debt. Learn more >
I was turned down for a loan because of student loan default. How can I fix this?
Poor credit that results from defaulting on student loans can prevent you from obtaining future loans such as car or home loans. You need to contact your loan holder to determine if there are options to resolve the default.
If you don’t know who holds your loans, go to the National Student Loan Data System (NSLDS), which is the central database for all federal student loan information. If ECMC holds your loans, contact us.
How do I correct mistakes on my credit report?
You can dispute any credit entry by filing an online dispute with the national credit bureaus. You will need to file a dispute with each credit bureau listed below.
If you don’t know who holds your loans, go to the National Student Loan Data System (NSLDS), which is the central database for all federal student loan information. If ECMC holds your loans, contact us.
