Here's a step for all of you who are currently getting your kneecaps smashed by a large hairy man named Vito because you refused to pay your loans. The fact is that you can still pick yourself up and beat this thing (though we do not recommend that you attempt to beat Vito… have you learned nothing?).

All you have to do is contact your loan holder and agree to make six on-time $50 payments. (The amount can even be lowered if you make a reasonable case.) At this point, you become eligible, once again, to apply for additional federal loans and grants. Make six more on-time payments and you're out of default. You get welcomed back to your pick of payment schedules and even the options of deferment and forbearance. Just don't ever screw things up again - not even we will be able to help you at that point.

If you need additional help with a defaulted loan or other general loan headaches, contact your school's financial aid office, or get some free booklets on loan repayment:

  • U.S. General Services Administration
    Consumer Information Center
    S. James Consumer Information Center - 6C
    P.O. Box 100
    Pueblo, CO 81002
    (Ask for the "Direct Student Loan Consolidation" and "Paying For College" booklets.)

  • Federal Trade Commission's Public Reference Branch
    Room 130, 6th Street and Pennsylvania Ave.
    NW Washington, DC 20580
    (Ask for a booklet called "Knee Deep In Debt.")

We're sorry if this SYW has been a little too "real life" for you, but we hope that it's helped clear up some of the murkiness surrounding student loans. And when you're forgoing that shopping spree to make a monthly payment, just remember that you'll be out of debt one day. Just think how happy you'll be when your kids go through the same misery…