Defaulted Student Loans
Date: Wed, 12/17/2008 - 02:36
Defaulted Student Loans
I have 6, 20 year old loans in default since 1994 (they were also in default sometime prior to 1994): 4 Stafford & 2 Perkins/NDSL.
I have worked intermittently for years: approx. 6 mos. in 1995, 1997, 1998, 2001, 2003, and 4 mos. in 2007. I've been poor & own no property.
I never applied for forbearance nor hardship deferrments.
This year, I finally have a good income.
The Dept of Ed. holds the 4 Stafford Loans, with principle, interest & penalties totalling about $11,000. They are willing to halve the interest for a lump sum payment of about $8500.00. I'm submitting a counter-offer in writing for less.
A collection law firm is in charge of the 2 NDSL loans held by the university, with principle, interest & penalities totalling about $9500. They inform me that by law they cannot deal for a lump sum. Is this true?
What's bugged me through the process is the occasional $1000.00, or so, late fees. "You're too poor to pay, and that's gonna cost you."
Is there any way to entice the collection law firm to accept less, say $6500? The original amount for 2 NDSL was $3500.
Is there any wiggle room trying to get back-dated deferments using old tax forms?
What about loan consolidation? Is there a reputable co. that will restructure the entire deal for less with a major lump sum payment upfront - and subsequent full resolution in 1-2 years?
No wage garnishment has occurred, but the Dept. of Ed. did get my 2003 income tax return.
Any suggestions?
Thanks!
You are in default...once in default you cannot "wiggle out" def
You are in default...once in default you cannot "wiggle out" deferments or forbearances. You are too far gone.
The settlement the DOE is offering is pretty standard...I really dont think they are going to go any lower. As for the law firm, there is nothing written into law that says anything either way....they simply do not have to offer you a settlement and can pursue the entire balance at the Universities choice. Settling on NDSL/Perkins loans is a loss to the schools revenue and some schools simply do not wish to settle.
Writing is a waste of time....you should have just called. Mail is paraphrased into the notes very briefly and they will not negotiate via the mail.
Student loans cannot use the the normal debt settlement plans...they are basically considered "secured" debts (due to the government guarantee). They will not settle over time.
Over he course of your up and down income, you would have been a perfect candidate for the Direct Loan Consolidation program....you would have had a payment plan based on income and you could have avoided a lot of this mess.
I was sent a letter 2 weeks ago stating that I would have my wag
I was sent a letter 2 weeks ago stating that I would have my wages garnished for a defalted student loan. The letter did not state how much (0.00) or when this would take place. Friday I looked at my stub and saw that the garnishment started they took out 157.00 and this will be every pay. I never received a letter to appear in court. Is there a way it can be lowered ?
Federal student loans are not required to take you to court to g
Federal student loans are not required to take you to court to garnish your wages....it is authorized by congress. Your employer is compelled by law to withhold 15% of your disposable pay. You would have been sent a 30 garnish notice 30-90 days ago, giving you the opportunity to appeal the garnishment. Have you not been talking to collectors warning you this would happen?
You can appeal but it will take time since those appealling within the 30 day window will take priority over you. Did you not think to contact the agency who sent you the letter 2 weeks ago?