Re: Opting Out and Loans

Posted by Boadicea (66.149.179.202) on June 17, 2004 at 22:23:53:

In Reply to: Opting Out and Loans posted by Suzanne on June 17, 2004 at 21:37:31:

There is NO statute of limitations on a government-backed student loan!!! Not only that, but there is no need for the CA to get a judgment before garnishing her wages.

This is a little known fact, but defaulted student loans are one of the easiest things in the world to solve. Even defaulted student loans are eligible for consolidation with the Dept of Education through the William D. Ford program. You can even refinance an already consolidated loan.

If she is willing to put up with a FULL MONTHLY PAYMENT based on the income contingent basis for only THREE MONTHS, she can bring her loans out of default. Once the three months of on-time payments are over, she can change to the graduated or even extended payments that amount to little more than the interest. She can always raise the payments as her income increases.

There are no origination fees, but the government may tack on up to 18% of the total for collection fees, but you get a brand new loan and there's no credit check. It's well worth it. There's also a way to "rehabilitate" a loan, but it takes a year of on-time payments before you're actually out of default.

Tell her to go to this FAQ on the Dept. of Ed site and read up on getting this burden off her plate. It will NOT go away. http://loanconsolidation.ed.gov/hfaq.shtml#default

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