I don't see an option

[bearnecessities]

I've been reading through this forum trying to find out what I can do about my student loans. I am currently in default, and have gotten the letters telling me that they are taking my income tax return and are going to garnish my wages. The thing is, I am unemployed. I have no wages. I have never had what would be called a "real" job and I probably never will. I haven't paid in enough to social security to ever collect when I get older, I am not eligible for any benefits.

 

Now, I am willing to pay on my student loans, but there is no way I can afford 1% a month. Is there any reason for me to open this can of worms? If I can't negotiate a plan that I can afford and they have no way to collect from me then what is the point? I realize that the loans have no SOL. They are on my credit report, will they be there forever? Not that it matters a whole lot cause like I said I have nothing to take so I'm not exactly in a position to qualify for any credit either.

[dixiecup]

Well, do you mind me asking, why is it you don't think you'll ever have a "real job"?

 

You obviously went to college or you wouldn't have the loans.

[bearnecessities]

Yes, I went to college and graduated magna cum laude. But I have no job skills or job experience. I've been a stay at home mom and have never had a job except for the little waitressing job I had as a teen. I tried to get a job a little over a year ago but couldn't find anything due to no prior job experience. Sure, I could work at McDonalds or something but that isn't what I would call a "real" job. I made it through the first round of applicants on one job based on my degree, made it through the 2nd round based on a test of skills but couldn't get past round 3, the interview with job experience.

 

And if my options are to sling hamburgers to pay off student loans for the rest of my life or just let it go, I gotta be honest, I'd rather just let it go.

[ChrisAZ]

Yes, I went to college and graduated magna cum laude. But I have no job skills or job experience. I've been a stay at home mom and have never had a job except for the little waitressing job I had as a teen. I tried to get a job a little over a year ago but couldn't find anything due to no prior job experience. Sure, I could work at McDonalds or something but that isn't what I would call a "real" job. I made it through the first round of applicants on one job based on my degree, made it through the 2nd round based on a test of skills but couldn't get past round 3, the interview with job experience.

 

And if my options are to sling hamburgers to pay off student loans for the rest of my life or just let it go, I gotta be honest, I'd rather just let it go.

 

Well I guess that's one option. Best of luck to you - whatever you decide.

[LynnInMN]

Most students come out of college with no job skills and little to no work experience.....but they get jobs because they have to. Most rent, food and of course, student loans to pay.

 

You start off by temping. Obviously you are capable of learning. Receptionist, data entry, accounting clerk, call center....none of these are exactly rocket science.

Look at the job board at your local school district. There are jobs within the school systems that do not require much experience. Paraprofesional postion work in the library, lunchroom, office and some work with kids. You have kids....you have experience. Done volunteer work?? If not, maybe do some to gain work experience.

 

Your default is serious business and it does affect your entire family. With your loan in default, your family is ineligible for FEMA benefits. Tax returns seized, FHA mortgage ineliegiblity. Not to mention, you wont be able to help your kids out if they need additional financial aid when they go on to post secondary education.

 

Obviously you are married. However in this day and age, you must realize that 50% of all marriages end in divorce. That leaves you where?? On welfare.

 

Now is the time to diligently work on getting yourself employed and getting into repayment. You may also want to look at the Direct Loan Consolidation loan program. Since you are in default, they will automatically assign you to the Income Contingent Repayment plan. This will take into account your spouses income, but it makes the payment affordable .

[Luverly]

Honestly I think your first step is getting a small job, even if it isn't a more desirable one. You can't gain experience from nothing. Once you've had that job for 6 months or so start reapplying for better ones and just start moving up the scale of jobs until you get what you are truly happy with. You gotta start somewhere, just like we all did.

[toopooor]

I have no job skills or job experience. I've been a stay at home mom and have never had a job except for the little waitressing job I had as a teen. I tried to get a job a little over a year ago but couldn't find anything due to no prior job experience. Sure, I could work at McDonalds or something but that isn't what I would call a "real" job. I made it through the first round of applicants on one job based on my degree, made it through the 2nd round based on a test of skills but couldn't get past round 3, the interview with job experience.

 

My story is much the same, but without the student loans. I was a SAHM when the kids were young, got involved in computers because SAHM was boring. When the kids started school i had a heck of a time getting hired any where but retail and i hated working retail. I had to prove myself over and over in computer related jobs only because I was a woman (almost all the guys I worked with were self taught too). After a few yrs of working for others i decided to start my own consulting biz...

 

Moral of the story... if you can't find a job you like... make one.

[bearnecessities]

so lets say I get a temp job or something and make $9-10 an hour. Then I go to make a payment arrangement and they include my spouses income with mine which will effectively negate every penny I make and cut into the money that we use now to pay bills. I guess I just don't see how this helps me since as of right now I am untouchable.

 

I am not trying to being argumentative, but I am trying to determine what the best thing for me to do in regards to my family's well being. And having to come up with child care solutions so that I can work and then not benefitting from any extra income doesn't look like it benefits my kids in the here and now.

 

Will the student loan default come off my credit report 7 years after the date the guarantor paid the loan holder? Or since the debt is always collectible can it stay on your report forever?

[LynnInMN]

so lets say I get a temp job or something and make $9-10 an hour. Then I go to make a payment arrangement and they include my spouses income with mine which will effectively negate every penny I make and cut into the money that we use now to pay bills. I guess I just don't see how this helps me since as of right now I am untouchable.

 

How do you know they are going to take every penny?? A temp job paying $10 per hour will bring you home probably $1000 =$1200 per month. Unless you owe in excess of $100k, your payment would be nowhere near that amount.

You are making a lot of assumptions. Hate to tell you but you are NOT untouchable.

 

I am not trying to being argumentative, but I am trying to determine what the best thing for me to do in regards to my family's well being. And having to come up with child care solutions so that I can work and then not benefitting from any extra income doesn't look like it benefits my kids in the here and now

 

 

Will the student loan default come off my credit report 7 years after the date the guarantor paid the loan holder? Or since the debt is always collectible can it stay on your report forever?

 

It apears to me that you are looking for someone to validate your excuses not to pay. Did you look at the Diredct Loan site?? Did you play with the loan calculators??? People all over this company work 2 jobs in order to pay all there bills including their student loans. Why should you be any different? Dad works days, mom works night and/or weekends. It is tough but that is what responsible people do. They figure out how to pay all the bills. Did you husband have student loans?? Are his being paid??

 

Do you live in hurricane, tornado, earthquake or flood area of the US?? Any natural disaster can hit pretty well any part of the country. Your family is currently cut off all but basic (food and water) FEMA benefits because of the default. Yes that includes your husband and your children. Does that help your families well being??

[bearnecessities]

I say they will take every penny because they wont go by my income alone. They will also include my husbands income which will push the payment up. Am I not understanding the process correctly? Please correct me if I'm wrong.

 

Also, could you elaborate on how I am not untouchable right now? I have nothing, how do they take anything?

 

I am not looking for excuses to not pay. I'm not paying right now so I don't really NEED an excuse. I'd like to figure out a way to start paying it back but if they wont accept the amount I can afford then what else is there to do?

 

And please, if I wanted to hear about how irresponsible I am being I could call a collection agency. I came here to ask some questions, some that have still not been answered. I didnt really come here to be threatened with disaster and divorce (are you serious?).

 

So if someone knows the answer to this question specifically I would appreciate it: How long does the student loan default stay on my credit report?

 

Sidenote: Sorry about missing apostrophes, that key is not working properly on my keyboard.

[Saria]

Will the student loan default come off my credit report 7 years after the date the guarantor paid the loan holder?

 

Yes

[LynnInMN]

Will the student loan default come off my credit report 7 years after the date the guarantor paid the loan holder?

 

Yes

 

Not always. If your original loan was thru a FFELP lender, it will eventually be subrogated by the USDOE and the reporting cycle starts all over again for another 7 years.

 

Ok....how much do you owe??

[bearnecessities]

how do you know if it's been subrogated? Does it show DOE as the creditor on the report? Currently mine show the original lender and also the Guarantor.

 

They are currently saying I owe $72000.

 

So 14 years is the max it can be on the reports? If I set up payment arrangements will it start the 7 year clock again or will it stay the same as long as I stay current?

[Saria]

Will the student loan default come off my credit report 7 years after the date the guarantor paid the loan holder?

 

Yes

 

Not always. If your original loan was thru a FFELP lender, it will eventually be subrogated by the USDOE and the reporting cycle starts all over again for another 7 years.

 

Ok....how much do you owe??

 

 

Ah, yes, I forgot about that possibilty. You think of everything, Lynn

[LynnInMN]

Who is holding your loan right now?? That will tell me whether you have a FFELP loan or Direct Loan

 

Ok...$72k. Taking off a guestimation off your collection fees, I figure your monthly interest is around $370 per month. With interest capitalization and collection fees added back in, you will probably top $100K within 8-9 years. Once you start coming close to that magic number of $100K, that is when they start suing....particularly with loans that no longer appear on the credit report. Is your name attached to a mortgage? Hope not.

 

I played around with the ICR calculator thru Direct Loans. Without knowing your interest rates, I used 6.8% with direct withdrawal option for the interest rate reduction. I picked family size as 4. I picked an Ajusted Gross Income figure of $40k. Figure out yours and then play the "what ifs" game with potential wages you could possibly earn. This is what I came up with...

 

Summary Information: This page provides estimated monthly payments for Standard, Graduated, Extended Fixed, Extended Graduated and Income Contingent Repayment Plans to help you select the appropriate plan for your consolidation loan.

 

 

Interest Rate - Consolidation Loan 6.625%

 

 

Total Loan Balances

Total Consolidation Loan Amount $72,000.00

Total Education Indebtedness $72,000.00

 

For Income Contingent Repayment Plans

Adjusted Gross Income (AGI) $40,000.00

Marital Status Married or Head of Household

Family Size 4

State of Residence Continental US

 

Income Contingent

(see Note 2 below) 254 (months) $322.50(monthly repayment) $148,487.89 (Totlal Paid)

 

 

Being in default, you do not have any other choice but ICR but there will be several other payment plans listed. After 25 years in repayment, the balance of written off and is charged back to you via a 1099.

 

The $322 figure is not written in stone. The Direct Loan program is extremely customer friendly and if the payment assigned will work, they will adjust it. They will take into account daycare costs, areas of high housing costs and high medical bills.

 

Play with the calculator.

 

 

 

https://loanconsolidation.ed.gov/loancalc/s...k=startCalculat

[bearnecessities]

my name is not on a mortgage. Seriously I have nothing so being sued doesnt particularly scare me. You cant get blood from a turnip ya know?

 

Okay, so say I do the ICR to get the loan rehabbed. Is that 6 payments, 9, 12? And then after that if I pay for 25 years they write off the rest? That gives me hope.

 

I honestly do not know who holds the loan right now. I think it is DCS but I have gotten so many different letters that I am not sure.

[LynnInMN]

my name is not on a mortgage. Seriously I have nothing so being sued doesnt particularly scare me. You cant get blood from a turnip ya know?

 

Okay, so say I do the ICR to get the loan rehabbed. Is that 6 payments, 9, 12? And then after that if I pay for 25 years they write off the rest? That gives me hope.

 

I honestly do not know who holds the loan right now. I think it is DCS but I have gotten so many different letters that I am not sure.

 

 

No the ICR is for a Direct Loan Consolidtion. Standard payment for rehab will be $720. They should let you do reasonable and affordable payments for rehab using your husbands income as a base. However, since you dont care about the credit aspect, I would suggest you go straight to consolidation.

 

DCS is a CA. On the letters it should say who they are collecting for.

[bearnecessities]

sorry it took me so long to get back to this, 4 kids keep me pretty busy!

 

The collection letters say they are collecting for the guaranty agency so I'm guessing that means the DOE hasn't taken it over yet. I'm still trying to figure out what to do. We already pay on dh's loans and just cannot afford to make another huge payment every month. I hate to let it go, cause I know that it'll just get bigger but when we get dh's paid off we'll be able to work on mine. And we may have a kid or 2 out of the house by then and my working wouldn't be such a big deal.

 

This whole situation just feels so hopeless.

[Poison dwarf]

I say they will take every penny because they wont go by my income alone. They will also include my husbands income which will push the payment up. Am I not understanding the process correctly? Please correct me if I'm wrong.

 

Also, could you elaborate on how I am not untouchable right now? I have nothing, how do they take anything?

 

I am not looking for excuses to not pay. I'm not paying right now so I don't really NEED an excuse. I'd like to figure out a way to start paying it back but if they wont accept the amount I can afford then what else is there to do?

 

And please, if I wanted to hear about how irresponsible I am being I could call a collection agency. I came here to ask some questions, some that have still not been answered. I didnt really come here to be threatened with disaster and divorce (are you serious?).

 

So if someone knows the answer to this question specifically I would appreciate it: How long does the student loan default stay on my credit report?

 

Sidenote: Sorry about missing apostrophes, that key is not working properly on my keyboard.

 

From my understanding, if you rehab the loan and make the required payments for a specified amount of time, the default can be and should be taken off before 7 years.

 

As for FEMA help, that's laughable to me because they don't appear to do too much to help any tax paying citizens. Judging by the people dying in New Orleans 3 years ago and need I mention all the bad press about how they're treating the victims of the Gulf Coast in their "recovery efforts". You're probably better off without governmental help and doing for yourself instead. A lead-in to you should really look at getting a job. You have debts and you need money to make them go away. Point blank.

Edited February 1, 2008 by Poison dwarf

[LynnInMN]

sorry it took me so long to get back to this, 4 kids keep me pretty busy!

 

The collection letters say they are collecting for the guaranty agency so I'm guessing that means the DOE hasn't taken it over yet. I'm still trying to figure out what to do. We already pay on dh's loans and just cannot afford to make another huge payment every month.

 

Why are his loans being paid and not yours?? Is his contribution to the household bigger than yours?? Being a SAHM is a job. I have seen this senario over and over again. You should both consolidate with the DOE and both be on income contingent repayment.

 

I hate to let it go, cause I know that it'll just get bigger but when we get dh's paid off we'll be able to work on mine. And we may have a kid or 2 out of the house by then and my working wouldn't be such a big deal.

 

This whole situation just feels so hopeless.

[bearnecessities]

we can't consolidate ours together though right? His loans are about half of mine so his are way more affordable. Also, since he has income his wages would be garnished if we weren't paying them. So mine have taken the back burner.

 

If we both consolidated would they take the payments for both into consideration when deciding the amount of monthly payment?

[LynnInMN]

we can't consolidate ours together though right? His loans are about half of mine so his are way more affordable. Also, since he has income his wages would be garnished if we weren't paying them. So mine have taken the back burner.

 

If we both consolidated would they take the payments for both into consideration when deciding the amount of monthly payment?

 

Yes, they will take ito consideration both of your payments under the Icr.

[dawniedawn67]

we can't consolidate ours together though right? His loans are about half of mine so his are way more affordable. Also, since he has income his wages would be garnished if we weren't paying them. So mine have taken the back burner.

 

If we both consolidated would they take the payments for both into consideration when deciding the amount of monthly payment?

 

 

You know, life has a funny way of never working out the way you planned it.

 

What if, God forbid, your husband passed away tomorrow? What would you do then? Will his life insurance cover all of your outstanding debts? If not, you would HAVE to take a job, or you would HAVE to go on welfare. At that point, the government would garnish your wages or they would take a cut of your welfare payments, so you would be in a worse situation than you are now. The standard "You can't get blood from a turnip" doesn't apply when you owe the government money. They won't forget about you if you lie low, and they don't care what sad story you give them when they come to collect - they've heard it all.

 

You were aware of this debt when you started having children and decided to stay home with them. When you decided to be a SAHM, this should have been factored into your bills and if your husband's income can't cover it, then you probably should have explored other options.

 

All of us are here because we've been in the same boat as you and just want to let you know that it's better to get it taken care of sooner rather than later. As far as your credit report, well, in my own experience, my defaulted SL has never NOT been on my credit report, and I have been out of school since 1987 - so YMMV when it come to that.

[LynnInMN]

we can't consolidate ours together though right? His loans are about half of mine so his are way more affordable. Also, since he has income his wages would be garnished if we weren't paying them. So mine have taken the back burner.

 

If we both consolidated would they take the payments for both into consideration when deciding the amount of monthly payment?

 

 

You know, life has a funny way of never working out the way you planned it.

 

What if, God forbid, your husband passed away tomorrow? What would you do then? Will his life insurance cover all of your outstanding debts? If not, you would HAVE to take a job, or you would HAVE to go on welfare. At that point, the government would garnish your wages or they would take a cut of your welfare payments, so you would be in a worse situation than you are now. The standard "You can't get blood from a turnip" doesn't apply when you owe the government money. They won't forget about you if you lie low, and they don't care what sad story you give them when they come to collect - they've heard it all.

 

You were aware of this debt when you started having children and decided to stay home with them. When you decided to be a SAHM, this should have been factored into your bills and if your husband's income can't cover it, then you probably should have explored other options.

 

All of us are here because we've been in the same boat as you and just want to let you know that it's better to get it taken care of sooner rather than later. As far as your credit report, well, in my own experience, my defaulted SL has never NOT been on my credit report, and I have been out of school since 1987 - so YMMV when it come to that.

0

 

Exactly my thoughts!!! Unless you choose to live under a rock, marriage is NOT forever . Divorce and death....it happens all the time.

Being the SAHM does not mean that your debts are any less important than his and so many woman seem to get into this rut. Then they divorce and his credit is perfect and her's is in the toilet. I hate to say it, but having kids is an excuse, especially when the loans came first. You do what other people do....one spouse works days, the other nights and/or weekends.

[sunshine9924]

we can't consolidate ours together though right? His loans are about half of mine so his are way more affordable. Also, since he has income his wages would be garnished if we weren't paying them. So mine have taken the back burner.

 

If we both consolidated would they take the payments for both into consideration when deciding the amount of monthly payment?

 

You can consolidate together if your DH is willing to take on the liability of your student loans.

 

I consolidated my DH defaulted student loan with one of my small good ones while I was still in college so that he could go back to school. I had to agree to be responsible for paying it back which I was perfectly willing to do since we both have decent jobs and both incomes go towards all the bills.

 

If DH doesn't want to consolidate all together, he could change his repayment plan to Income Contingent Repayment (ICR). That might lower his to help afford ICR payments on yours.

 

I strongly suggest thinking long term about the ramifications of not paying your student loans. With 4 kids that will be going to college sooner than you might think, you will be unable to apply for any student loans for them if yours are still in default. That means you'd have to pay full tuition out of your pockets until you take care of your loans.

 

Thinking short-term gets many of us in trouble when it comes to finances. Even if the credit report doesn't matter to you, I would hope you might take a step back and think about the long-term effects on your children.