Dealing with federal student loans can feel overwhelming. The monthly payments, the growing interest, and the years (sometimes decades) of debt hanging over your head — it’s a lot to handle. However, some good news is that federal student loan settlement options do exist, and there are several ways to reduce what you owe and make your financial situation more manageable. Here’s how you can tackle your federal student loan debt and move forward with your life. What Does It Mean to Settle Student Loan Debt? When you settle a loan, you negotiate with your lender to pay less than the full amount you owe. Typically, you offer a lump-sum payment that’s smaller than your total debt, and the lender agrees to forgive the remaining balance. This process differs from forgiveness programs or income-driven repayment plans because it’s about negotiating a one-time payment to close the account completely. For people dealing with severe financial hardship, settlement can be a way to resolve defaulted federal student loans and get a fresh start. However, the rules for federal student loans are quite different from those for private loans when it comes to settlement options. Federal Student Loan Settlement Options: What’s Actually Available? […]
