Student loan debt after reconsolidation twice

My settlement company would not accept my student loans and I graduated college in 1995 and have deferred them every year since. I have reconsolidated them twice and they keep collecting interest. Now, they are up to 48,000.00

I reconsolidated into here recently and regained another 5 years of forebearence time, however I am worried that when I ask for the income sensitive payment that I won't be able to afford it. I plan on taking 2500.00 of my income taxes and dividing it by 12 and paying 208.00 monthly to them. I have been told that sure it may default and ruin my credit even further, but I heard they won't try to garnish your wages if your making a faithful effort into sending in something monthly on a reg. basis.

Does anyone have any dealing experience with student loans? Is there a way to get out from under them? I have heard others say they will nail you to the way and garnish your income taxes even if your paying what you can a month. It is crazy.... Right now they are in forebearance until Spring of 2007.

Any advice will be appreciated.

Your wages cannot be garnished if you are paying the student loans each month. The loan company has to update your account with the payments received from you. This leaves no reason for them to file a case against you. Make sure that your consolidation company is confirming the payments received by the loan company in writing.

Don't get scared of the threats made by the loan company. Creditors often do it to scare the people so that they get the money in quick time. Your payments done so far will be counted first before it results any actions against you. Ari will be able to offer you some more practical advice on this issue.

Hey there LJClark here I am! I used to collect student loans, so you can ask me anything you want! From what you are telling us, you have kept this in forebearance until now, and you are ready to make payments. The tax return divided by twelve is a good start, and since you mentioned an income-contingency plan, please keep in mind that the absolute minimum payment acceptable is $50 just as long as you keep up with it every month.

So far, it doesn't look like you are in default. Also, keep in mind as well that if you do default, the collection agencies that handle student loans MUST conduct business by the fdcpa. Also, when you do default a loan, your options decrease somewhat. Defaulted loan interst grows like wildfire. In default, you will be asked to rehabilitate, which calls for a 4% down paymetn for a loan of your size, and 1.5% installments thereafter until your loan is refinanced, in which case your loan comes out of default and you are given nine years to finish repaying. I know that the percentages we're talking about here are not sensitive to any income! That is what I meant when I said that defaulting decreases your options.

After you've paid your $208 for one year, as long as you make consistent payments of $50 monthly you should be ok.

I reconsolidated with A.C.E They bought off my loan from Sallie Mae.

I have never paid a dime.

I have never defaulted either by using deferrment and forebearance.

I will be told what my min. payment will be in April 2007. WHAT IF......

They say your min. payment is 306.00 and I can only send in 208.00?

You are telling me that this goes to default and I am screwed???

or does it stay out of default if you are paying faithfully. The only way I will be able to pay anything at all is by dividing my income tax by 12 and doing it that way....

Jedi....with your experience, what do you see happening???

I have student loans, LJ, when I took the student loan pre-application quiz, it clearly stated that the minimum acceptable monthly payment is $50.

Being in default of a student loan is not the end of the world, you will just be in a pickle until you get a better paying job. Since you're not in default paying $208 will not render you into default, the only reason why they insist on $306 is because of the interest, they will not refuse your payment.

Did you inform them of your plan with your tax return? It would help a great deal if you gave them a heads up on that and negotiated it from there. Keep me posted, pm me, e-mail me, just keep me informed of all your dealings with the Dept. of Ed.

Yes, I told the company that the only way I could afford to pay them anything at all was to use my income tax return and divide it by twelve. They said they understood, but lets see how fast they understand when I get my coupon book and it says 376.00 due and I only send in 250.00.

I only have 4 years of forebearence left and I don't want to use anymore of that crap...I need to start paying something soon.

I figure I will pay and pay on it forever and ever. Also my grandma is leaving me 15,000.00, think they would settle for 15,000.00 on a 48,000.00 student loan????? I am willing to kiss it goodbye to get the student loans far, far away from my name.

Also, would it have to default to ask them to settle for 15,000.00?
or what.

GIVE me all the advice you can.

About a better paying job? THIS IS IT. I have been at my job for 9 years and I am not going anywhere. The pay sucks, but it is the best job in town and it has great benefits! Plus I enjoy helping others and I am a social worker. My husband has no college education and he goes job to job and sometimes is out of a job period.

Sorry, I don't think $15,000 would even cover the principle in a settlement. The bare minimum settlement amount is principle plus half interest.

If they said they understood the payment arrangement you presented, take it at face value! They accepted it didn't they? Just remember, that when not in default, the minimum acceptable payment is indeed $50. THe coupon book is based on a set number of years plan, if you were to pay what you can, you would just take longer to pay it off, you wouldn't be defaulting unless you skipped one whole month.

While you have four years left on forebearance, have you considered relocating? If you and your husband are not exactly blooming where you are planted, do a little research on what cities are more fiscally fit, and give yourselves a do-over. Think about it, if you are making less than you're worth and your husband is just barely moving laterally, then you're not in the best economic area. In this situation, you'll never retire and you'll be in a serious world of hurt when you're older and there is no pension of 401k for either of you to survive on.

so you are saying....AS long as I make the payment of more than 50.00 then I won't ever default (even if it is not the full payment they want??)

No, nothing is set in stone and they have not accepted anything yet. This was just "small" talk about my future plans to start paying next year. They of course were happy and talkitive. I wonder if they will walk the walk at that time though.

What makes me madder than the dickens is when I graduated it was just 24,000.00 it added interest over the years to a whooping 48,000.00 and it just chaps my rear end. They ought to knock that all off, but I don't see that happening. Especially since this new A.C.E took over and purchased the 48,000.00 from Sallie Mae.

Is there anyway to bargin that total price down and to try to settle and make payments on that amount???

I don't want to pay on this damn thing forever. It has been 10 years since I graduated and seems like they would just write it off....

I think I am dreaming.

Oh, and will that keep them from every intercepting my taxes, If I am paying "a regular payment" monthly.?

Correct!

"Default" is going sixty (60) days without any payments. Only then can they garnish wages or offset taxes. As long as you pay at least $50 every month, you are remaining current.

By the way, based on what you're telling me. If you hade the option to settle, your principle is $24,000 and your current interest is the same. As of right now, you're minumum settlement amount would be $36,000.

Say I inherit 20,000.00

Is there anyway to settle on the 36,000.00 and pay 20,000.00 and payment plan on the remaining 16,000.00?

That wouldn't be a settlement. That would be a payment plan with a down payment of $20K and you'd have to pay the rest of the $28k monthly. That would be more befitting of a Repayment Plan.

Settlements are lumps sums only.

Is there any debt settlement companies that do accept student loans?

I hate them...I did not even do them. My mother filled out the paperwork and signed my name to them and sent them in for me. She knew I would have to pay them back. She did not tell me, they just sent me off to college...and told me where to pick up my student aid. hell, I thought it was grants not loans, until I got like a big coupon book the month after graduation.

OMG. I would have rather worked part time to pay for my college than took out 8000.00 each semester.

There are, but most CA's that specialize in student loans are pretty honorable. Collection Company of America and Nationwide Credit Inc. to name two. But you're not in default! So stop worrying abut settling and just make your payments! you'll do fine and you won't get into any trouble.

Yew hew.....JEDI...are you out there?

Ok, I pulled up my profile and right now I am in forebearance until 3/2007. I again have to request yet another year forebearance in 3/2007.

I have NOTHING, NOTHING to pay on climbing interest and my balance is: 49,000.00. It is collecting 3,000+ in interest each year. I CAN NOT DO A THING ABOUT IT. MY JOB IS STEADY AND I CAN NOT RELOCATE. I actually have a very good job for the area I live in.

Anyway, I pulled up the income sensitive plan and OMG...it say my payment would be like 352.00. My gross is around 2500.00 however my net is around 1900.00

THERE IS NO WAY I CAN SEND THAT.

SO, after this last year of forebearance, I will be paying 250.00 monthly by dividing our income tax by 12 months.

As you can see, 250.00 is no where near he amount of 352.00. Are you telling me that if I only send in what I can a month that my loan will not default ever?

Sure, I am going to get behind and have late fee's I am sure,but at this point of time, I don't care about that. I am just going to pay faithfully once I start paying.

And then try to settle when I have a large lump sum to settle with.

So, your also telling me they will not garnish me if I am paying something monthly?