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jennacide

In full-time school, got notice of garnishment? What happened to deferment?

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I've read everything on this SL forum and have learned a lot, too late. I lost my high-tech job during the dot-com bust, and have had to go back to school, on and off, to start all over (from technology to science). Right now I have 2 federal SLs in default (just learned that term on here) but I have been in school so they have deferred. This year, after a couple of years, I finally got into a nursing school, and am in school full-time. I'd forgotten about my old loans. Then I started getting the calls. But even though I submitted deferment apps I kept getting calls; and today I got a letter from Dept. of Ed. that they would garnish 15% of my pay. Well, my "pay" is basically 15 hours a week of minimum wage work ($8/hr.), so 15% isn't a whole lot... I'm tempted to just let them do it.

 

I finish school in 2011 with a BSN. My debt is basically $43K, so if I live really cheaply for some years I can handle that. I have no other debt, since I have no credit cards (probably the only smart thing I've ever done is not get a credit card in my youth). I've paid cash for everything. The only thing messing up my credit are these SLs. But until then...

 

So what do I do? Let them take that 15% right now and then later on pay whatever's left back? I mean, I'm a full-time student, & I pay out-of-pocket outside of scholarships...

 

Thanks for your help. It's unbelievable how little everyone knows about this... even in the financial aid dept. @ school, they kinda brush you off.

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When a loan is in default, you no longer qualify for forbearances or deferments. To stop the garnishment, you have to either prove a hardship or get it out of default status, which you could do by rehabbing or paying in full.

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You should consolidate them here:

 

https://loanconsolidation.ed.gov/AppEntry/a...ne/appindex.jsp

 

This is through Direct Loan Servicing. From there you can put the Federal Student Loans that are in default back into a positive status, and then defer that consolidated loan while you are in school full time. Then from there you can go on an income contingent program after graduation, if needed.

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I was under the impression that the garnishment has yet to occur. Perhaps s/he still has time?

 

Consolidations take some time, but if she applies right away and maybe can stall the garnishment a bit, she might me able to get in there in time. But that's IF she decides that consolidation is the route she wants to go. There are advantages and disadvantages to each choice.

 

Jenna, do you know how these are reporting on your credit report? And are they Direct Loans, or are they federal loans that were actually lent to you by someone like Sallie Mae or Chase?

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They're Direct Loans. But the thing is, I deferred them, and I got a letter saying they're deferred until June 2010. Then I got another letter for the same loan saying it's due! That was 3 months ago. But no, they haven't garnished yet. It was actually a letter threatening to garnish. I think I have a few weeks?

 

I'll apply to consolidate, my family says it's a great idea. I didn't even know I could do that...

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But you can request a Wage Garnishment Hearing, this hearing can be in writing or in person in GA.

 

Second the URL below will determine what the MAXIMUM amount of money they can garnish is:

 

http://fms.treas.gov/debt/awg.html#form

 

Third you have a right to 30 X's the amount of minimum wage. Ex 30 X's 7.25 = 217.50 (So after their garnishment you have to at least have that left)

 

(This is from a post on my site, I am not familiar with Student Loans, I just pulled this out of my NCLC manuals)

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Thanks for the replies. I applied for consolidation & for the income-based repayment. They calculate my repayment as $0.00. I don't know what to do with the wage garnishment stuff, should I even reply to it since I applied to consolidate? I can send in my paychecks to show them I make $400/month and can afford to pay $20/month... but will that cancel out the consolidation?

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Ok, they started the garnishment before the consolidation was done. I now have no idea what's going on. Since I make about $230 per biweekly paycheck off my part-time job, they can't take too much. Also, I did apply for a 3-month fulltime paid internship so I will have to quit this current job in 1.5 months if I get the internship. I don't know what happens then.

 

Can I still send them those Financial Statement What-Can-I-Afford forms about my poor financial status, where I send the 2 most recent paychecks? what will happen when I quit this job to work full-time for 3 months, then go back to part-time at another job next year? Does this garnishment just follow automatically?

 

I'm so bad at figuring this all out by myself that I feel like it's just easier to let them take the 15% from whatever job I have, because I won't miss what I don't see anyway.

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Actually I dont think you make enough to be garnished...http://contacts.gsa.gov/webforms.nsf/0/9C03A2413FAAA05585256A3F0002E630/$file/SF329_e.pdf

 

Your first $669 of earnings per month are exempt.

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EDIT: I'm a dum-dum and did not notice that the OP posted this a couple of months ago. D'oh! Problem solved?

 

If you are in default, don't forget that you will not qualify for federal student aid for the next year: http://www.finaid.org/loans/default.phtml

 

The simplest, easiest way to pull it out of default is by either paying it in full or getting a Direct Consolidation Loan through the DOE.: https://loanconsolidation.ed.gov/AppEntry/a...ne/appindex.jsp

 

You should first contact your school (in-person) and let them know the situation, since they may be able to prove that you were in-school and shouldn't have been put into default in the first place. If your school has automatic reporting of in-school status, then it's the lenders' faults, for what that is worth.

Edited by Frig

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The simplest, easiest way to pull it out of default is by either paying it in full or getting a Direct Consolidation Loan through the DOE.:

 

That might be the simplest, but it's not always the smartest. Depending on the situation, rehab is often a better option than either paying in full or consolidation.

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The simplest, easiest way to pull it out of default is by either paying it in full or getting a Direct Consolidation Loan through the DOE.:

 

That might be the simplest, but it's not always the smartest. Depending on the situation, rehab is often a better option than either paying in full or consolidation.

Very true, I did it to continue going to college and I didn't have the cash for the rehab terms (x3 OCs).

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