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Advice About a Student Loan in Default |
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I recently purchased a business (last August 06) and had emergency surgery in November. I had complications until February of this year. In April, I was contacted by a collection agency regarding a defaulted student loan that i took out in 1980s. It was the first I had heard of it... time has a way of veiling such things. They said that I could make payments every month for 8-12 months and then reconsolodate. I have to have another surgery and am trying to save any money so that I can do so. Does anyone have any ideas?
Valerie from Chico, CA
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Question: mentallly ill person
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Post By cnc (Guest Post)
(06/10/2008)
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I have a sister with schizophrenia. She was diagnosed 20 years ago and refuses to take medication or see a doctor, and has not worked in as long. How can she, with her disability, get out of the student loan which has accrued over the last 20 years? Without a current medical note.
carlacahill at roadrunner dot com (remove spaces and replace at and dot)
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RE: Advice About a Student Loan in Default
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Post By (Guest Post)
(08/28/2007)
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I saw a Suze Orman show today about the statute of limitations running out and I think this would probably be one she was talking about. I don't know if it applies to student loans. I would check her website before I made any payments or agreed to either. www.Suzeorman.com
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RE: Advice About a Student Loan in Default
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Post By (Guest Post)
(08/27/2007)
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My daughter and son in law re-mortgaged their house, to include the student loans. Interest was less and they were able to spread out the amount owed over a longer time period.
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RE: Advice About a Student Loan in Default
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Post By queen polyanna. (Guest Post)
(08/24/2007)
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You can ask for a forbearance on your student loan and make no payments for 1 year. At the end of the year you can ask for another forbearance if you still need it. My daughter did this after she graduated and it helped her to stay on her own until she was able to start making payments.
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RE: Advice About a Student Loan in Default
If it was a government loan you had, then this may be a scam. The government would be coming after you if you really are in default, not a collection agency. If it was a private loan, there is a time limit beyond which collection agencies cannot come after you. Check to see what that is in your state.
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RE: Advice About a Student Loan in Default
My daughter has a large student loan that she is unable to pay for the last few years because she was taking care of me and my sick husband(now deceased). She was able to file for several deferrments - called forebarence- each good for a year. The interest still accrues but she is not "in default". You may be able to do the same
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RE: Advice About a Student Loan in Default
Hi Valerie,
My first thought was why haven't you heard about this before now? Are you sure that you took out the loan and didn't repay it? I would ask them for proof (the promissory note) before I did anything unless you are sure you borrowed the money and didn't repay it.
Here is information about Student Loans:
http://studentaid.ed.gov/PORTALSWebApp/students/english/repaying.jsp
And here is information about defaulting on student loans:
http://www.ed.gov/offices/OSFAP/DCS/index.html
and
http://www.ed.gov/offices/OSFAP/DCS/disputes.html
You may be able to get some help with this especially because right now you are having medical problems.
Take good care of yourself.
Susan
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RE: Advice About a Student Loan in Default
First, all the bad news:
The government can seize any tax refund you may be anticipating, until your loan is out of default status.
The meter never stops running on a student loan, until its all paid off. There is no statute of limitations on a federal debt, so no one can wait for the debt to disappear, because it wont.
The interest accrues on the original amount borrowed, not the current amount. So if you borrowed $25,000, and have it paid down to $3000, you are being charged on the original $25,000.
I used to help people with student loans, but that was a few years ago, so some of my information may be outdated. Personally, if it were me, I would call the government to verify the debt, and then start working with the collection agency to get it paid back. Good or bad, the U.S. government has passed laws that ensure that student loans get paid back.
If you are in the position to settle, you may be able to ask for a lump sum settlement. They may be able to knock off 40-50 percent of the debt, if you can pay off the remaining amount in two or three payments.
If you can't settle, then rehabilitation or consolidation may be the best options. (I can't remember the difference right now between the two programs.) Once you get your loan back in good standing, you may be able to qualify for a hardship program or a forbearance.
The main thing is:
Always talk to your lender, or the company thats managing the debt for them because the government will never forget that you owe them money.
Good luck and hope this helps
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RE: Advice About a Student Loan in Default
Those defaulted student loans will eat you up. Do you have a credit card maybe that you could transfer it to? That would probably be your best bet. Make sure you find out about all the fees associated with it. There will be plenty of fines, fees, etc.
Get better! I will be praying for you!!
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