Reply #10: Be very careful with federally-backed student loans.

[jpljr77]

They enjoy a privileged place in the debt hierarchy: can't be expunged in bankruptcy, no statute of limitations, and the agency (or their collection vendors) CAN intercept certain gov't payments, like tax refunds. In other words, don't think it's like private credit card debt.

A Fed-backed garnishment is no joke. It is permanent (until you pay off the debt, of course). Right now, it sounds like the collector is trying to "rehab" you, or get you back into currently paying status. In the long run, it might be worth it to go back current. I think it takes nine consecutive payments to do that. That way, if something comes up down the road, you at least have the option to skip a few payments and go back into collections.

If you get garnished, that amount is coming out of your paycheck/tax returns, etc. until it's paid off. It might be a lesser amount every month, but you really can't shake it.