Student Loan WAY overdue...

Student loans are non dischargable in bankruptcy so that is not an option. It doesnt matter how old the loans are as there is no SOL for federal loans.

By my rough calculations, her interest is running about $260 per month

If she just cancels her payment, she will probably find herself being garnished. The do not require a court order and they will take 15% of her disposable wages.

are there any other options?

also, 15? i read places that it could be up to 25%.

Student loan garnishment is mandated by federal law at 15%.

Read the stickies at the top of this forum for information on rehab and consolidation. It sounds like they were setting her up to rehab her account. Either way, she needs to be talking to the CA pretty quick.

well yah, they explained the whole 12 months payment jazz.

but we just CANNOT afford 240 more in bills every month.

i did read about asking for an fairer amount, but they didn't budge. if she needs to provide proof, she is on our lease. as for our bills, she gives me half of whatever they are and they pay out of my account. of her 270 dollar paycheck, i take 120 for bills and rent.

so is there any way to adjust that? we could maybe do 100-150. or are we stuck with the 241.
they did say that after 12 months, we can drop the amount down to like a dollar and be done.

After the 12 months and the account is rehabbed, they wont own the account anymore so they cannot say it will drop the amount down to $1. You have to be realistic....this is a $50K debt and for it to be rehabbed the payments have to reasonable (based on the balance) and affordable (to you.) It is a two way streak. Rehabs are getting tougher to get due to the re-default rate and lenders just dont want to deal with the anymore. You could consolidate and then she would be put on the ICR plan....Income Contingent Repayment plan and it would be made as a part of her income. However once you marry, they will base the payment on your joint income.

i'm kind of confused. how come they never threatened this at any of her other jobs? she's worked at at least 3 other places that i know of in the last like 7 years, and this has never come up. it never came up until she called to ask about her taxes.

she called them today. they really don't want to budge on the price.

They caught up with her...it sometimes takes time.

well now they say that its not rehab, just a payment plan.
if she makes the first 241, they said they'd see about adjusting the price.

does this sound like a ploy or legitimate?

Hard to say what their intentions are.

I would still recommend you looking into consolidating...quickly.

i'm really unfamiliar with all of this.
how would she consolidate? and how would that help? i thought consolidation was for combining more than one loan.

Guest, with $50k my guess is she has more than one loan sub/and unsubside loans. And consolidating the bills will one (may stop the back amount by rolling it into the total amount owed) and/lower the payment. Granted you'll have a longer time to pay on the loans but conslidating is probably your only choice at this point.

Everything i read says consolidation is only possible if you aren't in default.

remember, she hasn't paid a dime in like 7 years.

Where are you reading?

http://www.loanconsolidation.ed.gov/borrower/beligible.shtml

What about asking for a Forbearance or Economic Hardship request. That could delay repayment for up to 3 years?

Too late for forbearance or deferment...you loose all those when you default