Student Loan Collections Question.

[rsmith6621]

My student loans like many other people are in collections were they are no easier to pay off than before collections.


The past two years I have let the IRS take my return money and apply it towards the debt. I want to get this matter back in to a more positive light on my credit report. It has been hard with no money leftover to pay them down hence the moving them to collection status.

Like those debt consolidation places that can work and reduce your revolving debt are there similar business that operate much the same way.

Thanks in advance for any direction you can point me in.

[ChoppinBroccoli]

1. Are You Able To Apply For An Income-Based Repayment Plan?

I know all about this because my student loans were about to default, and when I called my student loan company, they told me about this program. It's a program started by President Obama (the Socialist!!!) It's a really easy application procedure, and you just provide them proof of your income and a few other pieces of information, then they calculate how much you're able to pay per month based on your income. This program took my monthly payments down from $900 a month to just over $100 a month.

And here's the beauty of it the program. If you make all your payments for 20 years, whatever balance is still owed is completely forgiven and paid off by the government.

Just another way President Obama has made life easier for young people just starting out.

You should really check into this program if at all possible. If you aren't eligible, you might want to talk to a bankruptcy attorney. Student loans are generally non-dischargeable in bankruptcy, but under certain circumstances, you can have them discharged. Might be worth it if you meet the criteria (it's at least worth looking into).

Oh, and speaking as an attorney who DOES collections (with a wife who is a collections attorney for the State of Ohio), don't EVER go to one of those "Credit Counselling" services, or anyplace that says they can lower your debt without bankruptcy. They're a major rip-off. They don't do anything you couldn't do yourself AND they charge you a fee to do it.

[Care Acutely]

3. Thanks for that post! No telling how many people you helped today.

Well done!

[LeftofObama]

7. Great info!

Thanks for posting that!

[opiate69]

2. Here ya go... saved my ass big time a couple yeas ago (and yes, it was before Obama,

although he may have expanded it). This is the Federal program, not a private consolidator.

http://loanconsolidation.ed.gov/help/faq.html
http://loanconsolidation.ed.gov/forms/icr.pdf

[Honeycombe8]

4. I read the debt consolidation places are scams.

It's a good idea to research any procedure before you do it. It's easy these days, with the internet.

[opiate69]

5. The private ones probably are, but the links I posted above are direct Fed.

For 3 years, my monthly payment was $0, because my family income was less than 10% above the poverty line for my family size. When my wife went back to work, it naturally changed... I think it was around $100 when I recently deferred them again so I can return to school.

[bhikkhu]

6. That's what I used - a three year deferment, basically

during which time I struggled along and paid down our mortgage - so now we have enough equity and a decent credit rating that is letting me refinancing our mortgage and take out enough in equity (at 2.8%!) to pay off the student loans. The net result will be 15 more years of mortgage payments, but with a big savings in interest overall and much smaller monthly payments.

[a la izquierda]

8. Like others have said...

call the government agency that holds the loans (mine is Sallie Mae, and I've not had a bad experience with them...amazingly). They lowered my payments to $300 per month, which I can totally pay. They want their money, but if you have government loans, generally they (whomever holds the loans) WILL work with you.

If you have private loans, I don't know what to tell you. I don't have any experience with those kinds of loans.