Student Loan Garnishment - HELP

[Badiis]

Hi there. I'm hoping some of you guys (and girls) can help me. In 1996 and 1997 I got student loans in the amount of $18K. For various reasons (health and I wasn't working) I couldn't pay and defaulted. About 3 years ago I got a good job and started to get my head above water and started paying debts back but wasn't getting any notices for my student loan and defaulting etc. About 18 months ago, I got a wage garnishment notice from work. So for the past year and half they have been garnishing apprx $500 a month. I figured it was my fault and I'll just get through the next couple of years and deal with it.

 

My delema is that 18 months ago the balance was $27K. Over the course of these 18 months they have recieved over $11k but I got a notice that I still owe them $22K. I was so upset. They are charging me so much interest. At this rate I won't get this paid til 2015. I have two questions. If I borrow this money from my parents and offer to pay the loan off in full is there anything I can do to only pay the rest of the principle (so roughly $7K) The collection agency wants $15K to settle but that seems so bad because the principle was only 18K.

 

If not is there anything I can do to get it out of garnishment and pay the same amount on my own? Any help you all could give me would be greatly appreciated. I'm really trying to fix my credit and take control. Thanks!

[LKH]

Moving to the student loan forum for better response.

[raingirl]

The options will be different for private or federal loans. Who is the original SL trade line with?

Do you know your breakdown on each loan and how much one is costing you?

[raingirl]

Sorry I read your post wrong- ignore my comments.

 

[Stryker]

Are these federal loans?

[Badiis]

These are Department of Education loans.

[krzywon]

The amount of interest you are paying is about on par with any typical loan. Paying $500/month on $27k loans sounds about right to have them paid off in 2015.

 

If you want the garnishment to stop, you have 2 options - quit your job and hope they don't find you at your next job (they will), or rehab the loans and once rehab is complete, pay the loans off as agreed.

 

Rehab information:

http://www.ed.gov/offices/OSFAP/DCS/rehabilitation.html

 

EDIT: If you are due a refund on your taxes, the refund will likely be held and applied toward your loans.

Edited January 5, 2009 by krzywon

[Stryker]

The amount of interest you are paying is about on par with any typical loan. Paying $500/month on $27k loans sounds about right to have them paid off in 2015.

 

If you want the garnishment to stop, you have 2 options - quit your job and hope they don't find you at your next job (they will), or rehab the loans and once rehab is complete, pay the loans off as agreed.

 

Rehab information:

http://www.ed.gov/offices/OSFAP/DCS/rehabilitation.html

 

EDIT: If you are due a refund on your taxes, the refund will likely be held and applied toward your loans.

 

Agreed.

 

Bottom line? Look into rehab IMMEDIATELY.

[Saria]

Are they still reporting? If not, I'd consider consolidation if you can't afford the settlement offer. If they are still reporting, rehab is probably your best bet as suggested above.