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Student loans disappear after 7 years???

Submitted by on Fri, 05/07/2010 - 20:58
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I have been faithfully paying on my student loans for several years now. A friend advised me yesterday, however, that if a loan goes unpaid for 7 years, then it is automatically written off and you don't have to repay it. She said she has been dodging her Sallie Mae loans for 9 months and plans to keep it up until 2016 when her loans are written off by the lenders. Then she's debt-free without paying a cent. Is this true? Thanks!


Let her know that student loans are different than credit card debts.

As a consequence of not paying your student loan, you can be sued have your wage and tax return garnished (for Federal loans). Student loan remains collectible till its paid. Stick to what you're doing and don't pay hid to her. May be she would soon be reaping the fruit of the seed she is sowing.


Submitted by SC on Sat, 05/08/2010 - 00:28

SC

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Quote:

Originally Posted by Anonymous
I have been faithfully paying on my student loans for several years now. A friend advised me yesterday, however, that if a loan goes unpaid for 7 years, then it is automatically written off and you don't have to repay it. She said she has been dodging her Sallie Mae loans for 9 months and plans to keep it up until 2016 when her loans are written off by the lenders. Then she's debt-free without paying a cent. Is this true? Thanks!



Your friend got some very bad information...they are NEVER written off for non payment If this is a federal loan thru Sallie Mae, she will default shortly and enter collections. They will seize her state and federal income tax returns. After 7 years (or sooner) the US Dept of Ed will pick up the account and the 7 year reporting cycle starts all over again. She can be subject to wage garnishment without a court order and withholding of other federal monies.

If it is a private loan thru Sallie Mae, they will sue. Then they will pursue wage garnishment and bank account seizures.

In both cases, interest continues to accrue and capitalize and upon default, collection fees of up to 24% are added to the balance.



Your friend must have their head in a sand pile....student loans have been in the news regularly. Tell them to do a little googling. Or read this forum..


Submitted by SOAPLADY on Sat, 05/08/2010 - 04:25

SOAPLADY

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I leave this post to prevent someone from making the same mistake. I defaulted on my Federal Student Loan and Private Student Loans because I thought it would be written off after 7 years. I evaded the collectors for many years like a illusive thief in the night... or so I thought. All that time, my interest rates and fees grew to epic proportions! Now I owe twice as much! My wages are being garnished at 15% to pay off $21,000+ federal student loan. I only make $15 dollar an hour. It will take a lifetime to pay that back. In addition, my private student loans have grown unchecked to $14K+ because I thought I could 'hide'. I once listened to a broke friend that told me that if you dodge your student loans long enough, they will 'go away'. These types of loans are like herpes, they never truly 'go away'! Don't be a stupid loser like I was. There is no need for anyone to suffer my misbegotten fate. I brought this harbinger of financial hardship upon myself because I had my head in the sand. If I can help just one person not repeat my mistake, then at least some good came from my life's biggest blunder!


Submitted by on Thu, 06/21/2012 - 08:17

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