Student Loans

mrdoc2005 · Feb 13, 2005

I have a new neighbor/friend who wants to return to school but is in default on student loans (bad marriage and he wouldn't let her have money to pay them) she is trying to support herself and kids on little money and really doesn't even have records anymore of what she owes (ex threw stuff out) - she wants to return to school but the financial aid offices haven't been able to give her any info except that she is in default. I told her she needs to get records of what she owes and had repaid somehow (she repaid some before the marriage) and has to do something to reestablish? so she can get pell grants or loans to finish her education. Anyone know what else I can tell her to help her get back to school?

Tell her to contact the loan officer and explain things to them. If she does not know who holds the loans she can go to myfico.com and pay $15 for a copy of her credit report, which will tell her who holds them. Most loans are held by sallie may and she can go to their website and pull up all the info. I think once she is current on payment (maybe 6 months after becoming current) she can reaply for grants and loans.

Also, it would be a good idea for her to look at her credit and make sure ex is not running it up.

tonicareer · Feb 15, 2005

Tell her to contact the loan officer and explain things to them. If she does not know who holds the loans she can go to myfico.com and pay $15 for a copy of her credit report, which will tell her who holds them. Most loans are held by sallie may and she can go to their website and pull up all the info. I think once she is current on payment (maybe 6 months after becoming current) she can reaply for grants and loans.
Also, it would be a good idea for her to look at her credit and make sure ex is not running it up.

She has been advised to put all her student loans on credit cards - they do not want to work out a payment schedule that she can afford - then they told her to declare bankruptcy on the credit card debt. Then she can reapply for grants and loans because all the debt is paid off. The creditors for the student loans are calling her at work, calling her landlord, calling relatives - her boss may fire her. These are some federal and some bank loans backed by federal - if I understand correctly. At this point she says the collection charges are almost as much as the debt. They told her bankruptcy is her best option.

begalli · Feb 15, 2005

Bankruptcy is a terrible option. It's something that WILL stay with her for 10 years and will more than likely prohibit any future loans of any kind.

I wonder who is "they" that is telling her this?

I agree that she needs to get a copy of her credit report. She can then contact the borrowers directly.

begalli · Feb 15, 2005

Maybe she could contact her local consumer advocates such as are common on local television stations to find a reputable consumer credit agency that can be her advocate for arranging repayment of her outstanding debt.

I did this about 15 years ago. They negotiate payments that are acceptable to BOTH the payor and payee. These reputable consumer advocates can help her avoid bankruptcy and irreparable damage to her credit for the next ten years. I don't know how federal loans fit into this, but she needs better professional advice than bankruptcy!

tonicareer · Feb 15, 2005

Bankruptcy is a terrible option. It's something that WILL stay with her for 10 years and will more than likely prohibit any future loans of any kind.
I wonder who is "they" that is telling her this?
I agree that she needs to get a copy of her credit report. She can then contact the borrowers directly.

She knows this - but the default is preventing her from getting anything to go back to school at all - she can't register for classes anywhere. The default will last more than 10 years - it will last forever. The schools don't want to talk to her - they have sent the loans to collections. She even had trouble finding a place to live because of the default. Bankruptcy is so common here that employers and landlords don't even care. Defaults are less common and look worse - apparently? She said if she pays off the loans with credit cards - she will immediatly qualify for st. loans and federal/state aid. Rehabilitation will take a year and she cannot afford the payments they want each month. Also she has other debts apparently that her ex has run out on. This is what the schools said to do? Apparently it is quite common to do this.

begalli · Feb 15, 2005

Can she take that loser to small claims court to get him to pay back some of this debt or at least get it on record that he's part of the problem?

Boy, sounds like a real mess. I really wish her the best in whatever she decides to do.

tonicareer · Feb 15, 2005

Can she take that loser to small claims court to get him to pay back some of this debt or at least get it on record that he's part of the problem?
Boy, sounds like a real mess. I really wish her the best in whatever she decides to do.

He doesn't even want to pay child support - she is jumping through hoops to get that. She is applying for assistance programs - childcare - long waiting list, food stamps - they will help make her ex pay child support - but could take a long time. She isn't making enough to even pay what they want on the bill and still pay rent and basic stuff. If they keep calling people she could lose her job, they want to garnish wages (I told her her low income probably won't allow that to happen) take tax refunds. She is dealing with alot of hostility from those collectors - the non profits told her they will contact lenders but it will take awhile to sort out - so she cannot go back to school with this default on her record. Those non profits want money too.

jeepgirl, LPN, NP · Feb 15, 2005

go to this website.

www.creditboards.com

great people there. very nice and honest, and spell out what you need to do. they are all lay people who found out things the hard way. it is free... its a message board sort of like all nurses.

there's nothing, absolutely NOTHING those credit repair places, etc can do for her that she can't do for herself.

i found it when i was trying to learn to build my credit. it was wonderful... they have all sorts of info.

there are also ways to rehab student loans.

anywho, go to creditboards.

BTW, declaring BK does NOT, repeat, DOES NOT alleviate someone from the responsibility of student loans. the only way that happens if it is a private loan... not a federal. i have no clue as to why they would want her to pay it off with CC, etc. from what i have "heard" (read) that the student loan people will actually rehab your loan;... you make payments for a year or so, on time and in full and they will take off any negative notes on your credit report.... and mark every payment as on time and current.

jeepgirl, LPN, NP · Feb 15, 2005

go to this website.
www.creditboards.com
great people there. very nice and honest, and spell out what you need to do. they are all lay people who found out things the hard way. it is free... its a message board sort of like all nurses.
there's nothing, absolutely NOTHING those credit repair places, etc can do for her that she can't do for herself.
i found it when i was trying to learn to build my credit. it was wonderful... they have all sorts of info.
there are also ways to rehab student loans.
anywho, go to creditboards.
BTW, declaring BK does NOT, repeat, DOES NOT alleviate someone from the responsibility of student loans. the only way that happens if it is a private loan... not a federal. i have no clue as to why they would want her to pay it off with CC, etc. from what i have "heard" (read) that the student loan people will actually rehab your loan;... you make payments for a year or so, on time and in full and they will take off any negative notes on your credit report.... and mark every payment as on time and current.

oh, and there are hardship programs she can apply for. she could even qualify for defferment of her student loans if she can prove she is in financial straights. they also have payment schedules that the payment is more or less depending on your income.

she really needs to research these options.

begalli · Feb 15, 2005

i have no clue as to why they would want her to pay it off with CC,

If she pays off her student loans with a credit card she can then turn around and declare brankruptcy on the cc's.

I think that's what's being recommended.

That site is great! Back 15 years ago, when I was 15 years younger there was NO WAY that I could negotiate the payment plans that Consumer Credit Counselors could for me. They were very good and the total fee over 3 years was $300. WELL WORTH IT for saving me the time and hassel of dealing with the creditors, coordinating my budget, paying back my creditors in good faith (they were even able to get the creditors to stop allowing interest to accrue on my outstanding debt while I paid back the principle), and avoiding bankruptcy. They taught me invaluable budgeting techniques that I still use today. Plus I got the feeling of pride in being able to make good on promises I agreed to with my creditors.

BUT, there are bad ones out there claiming to do what CCC did for me. They're only interested in making money for themselves and not giving a second thought to the financial well-being of the person seeking help.

I really think bankruptcy should be harder to do than it actually is. Then maybe people, especially young adults, would think twice about charging up credit cards to satisfy their "I need this now" attitude ending up getting themselves in way over their heads. I know this has nothing to do with the OP's problems, but still, that's my opinion. :)