Student Loan Defaulters ONLY

bluesnurse · Jan 22, 2011

I haven't defaulted but I came close last year when my hubby's small business tanked along with the local economy. I finally called the servicer, literally in tears, and explained my situation. I was less than a month from default and they were able to work out a monthly payment that I could cover until things stabilized for us.

He lost the business but has been able to pick up some handyman jobs, and I started volunteering for weekends which made everyone at work very happy :)

I'm now only one month behind, and will be current by next month.

We never eat out or go to the movies. We buy almost all our food at ALDI, and I get all our clothes (except socks & underwear!) at thrift stores. We've cut our "recreational" spending to the bone. We've come to enjoy each others' company more than ever, because we have to be creative to find fun-yet-cheap things to do.

We're still working through some financial issues, but I feel a lot better knowing at least the student loans are under control.

The fact that I had a FULL TIME job definitely helped when dealing with the servicers. FT status indicates commitment and reliability, and that helps built your case for a temporary workaround on your loan payments. That in turn saves you from wage garnishment, and they WILL do that.

The thing you have to understand about student loans is that you can ignore them, but they won't go away. Ever. Even in bankruptcy. And you can only ask for so many forebearances.

Take the FT job. The last thing you should be doing is applying to grad school. It may postpone your student loans, but it will not make them go away -- in fact it will make them even bigger. A lot of other prospective grad students are have the same idea right now, and you can't all land six-figure NP jobs upon graduation that will help you keep up with the debt.

Totally agree that the system is set up badly, and I think things will get much worse before they get better. But please, try to find a way to keep up for now; you are an RN with a job so you are in pretty good shape relatively speaking. Best wishes.

MrWarmHearted · Jan 22, 2011

We don't know the full story - perhaps you are concerned about some type of welfare status that the you/kids may "lose" if you work full time. BUT, from a financial point of view, you have to earn more to pay for your bills (especially if you're just scrapping by).

FYI - there are various "charity services" (even from hospitals) and local community agencies (that offer sliding scales) if you/your kids get sick . . .

As mentioned before, see if you can work more and work out payment arrangements (or "financial hardship" status)with your debtors, otherwise, you'll always be stuck.

Spode · Jan 22, 2011

Full time paycheck 793/week (before taxes)

childcare 420/week

gas 50/week

insurance 100/week

Student Loans 200/week

These are conservative numbers too.

(Food, diapers, etc.)

See 12 hours shifts for me which usually turn into 14 hour shifts cause me to pay a sitter 150/work day. I have twins in diapers. No day care is open longer than 1o hours in this state(against the law).

Believe you me, I am NOT a socialist but I have become a product of the system. This is how they keep people broke. I reapplied to grad school to pursue the degree for which I became a nurse for in the first place and was not accepted. The closest school is 3 hours away. My housing is provided by husbands job as it should be. He works 12 hour days/ 6 days a week for a whopping 6oo dollar/week check. He pays the car loan and all other expenses

I am basically trying to decide to either put the measley little payments to the borrowers into a college savings fund for myself so I can ONE day return and pay them after I graduate or keep paying below what I am able and never dig out.

Again, I asked for advice on a solution, not your opinions of me and that I am a bad person for struggling financially. If you can give sound advice DONT post! I have enough people on my butt without you so called peers b

TheCommuter, BSN, RN · Jan 22, 2011

If you can give sound advice DONT post!

Nobody said that you were a bad person. However, if you post something on these forums that exposes aspects of your personal life, be cognizant that other members are free to disagree with you as long as they refrain from calling names or engaging in unfriendly debate. While the responses may not exactly correspond with the advice that you are seeking, I do think that you have gotten plenty of helpful advice. Deferments, negotiations with the loan company, and full-time employment are all options. Defaulting is an option, too, but it will lead to more headaches and heartaches in the end.

I, too, have student loan debt. However, I work two jobs. While working 60 hours per week is a struggle in itself, I know that life will be easier in the future through hard work, personal ethics, and prudent choices.

I work two jobs, but remain uninsured at this time. One is a part-time job that doesn't qualify for benefits, and the other is a PRN/per diem position. Although I earn good money between the two jobs, I have no health insurance.

I recently had to pay $1,200 in cash for a root canal procedure at the endodontist's office (this is with a 25 percent discount). I will have to pay another $600+ cash in the near future for a core buildup and a crown. This is all for one tooth. I also must pay cash for all visits to the doctor, and I must request prescriptions that are on the $4 WalMart list because I pay cash for those, too.

It's not fair that I have to pay for my own healthcare while also indirectly paying for other people's low-cost coverage. I am single and have no children at this time because I realize that children come at a tremendous cost.

To the OP: you made multiple choices that sent you on a certain trajectory today. You furthered your education with the help of massive student loan debt. You had young children with your spouse. Step up to the plate and pay for your choices.

delilas · Jan 22, 2011

I defaulted 6 years ago on one of my original college loans. I had never gotten a bill for it, and with all the hubbub around graduating, I hadn't noticed one less bill showing up 6 months after graduation. They didn't care that they were, apparently, sending my bills to someone in Illinois I had never heard of. To this day, I don't get bills from them. I'm on a very strict payment plan with them and have been since then. I'm not allowed to pay over or under my amount each month, but the specific amount I agreed to. When I went back to nursing school, I could not forbear or defer it. Luckily, there's only a few thousand left on it now.

oramar · Jan 22, 2011

Most people are not aware that if you default and go on Social Security it will be deducted from your check.

Trauma Columnist · Jan 22, 2011

Some suggestions:

Call your loan servicer and see about working out some type of repayment. BTW is your student loan really $200 a WEEK?

Change to a weekend night option so that your husband can help with the kids and you caan save some on child care.

Insurance $100 week? That too seems very high. Any way to cut costs there?

hope4now · Jan 22, 2011

To the OP: I don't know if all of this advice is helping. Yes, we all make choices when we are young, and we have to live with them. However, I hope you know that there are people out there who *care* and I am one of them. :)

kids · Jan 22, 2011

Depends on the type of loan, but most are not eligible for discharge in bankruptcy. I would try to repay them as best as you can because as others have said they will not go away. Eventually if you default you can be sued for the money and you will most likely lose. If you lose you will get a judgment against you and they can wipe out your bank accounts and depending on where you live they can start garnishing your wages.

(Bolded) depends on the type of loan. Federal loans don't have to sue and get a judgment. When you sign the app & accept the money you agree that they can garnish you wage, divert your tax refund and seize your bank accounts.

kids · Jan 22, 2011

you all don't get it and you are right it makes me mad too. If she works full time she looses state funded insurance which runs 10-15/per kid. If she works full time she looses this and has to pay 400 plus for family insurance. I get what she is talking about. It is also not her fault it is the way the system is set up.

Excuse me? Not her fault? Did someone hold a gun to her head to sign the loans?

There are a lot more programs now to reduce student loan payments than there wre a few years ago including income based repayment. http://studentaid.ed.gov/PORTALSWebApp/students/english/OtherFormsOfRepay.jsp

happy2learn · Jan 22, 2011

You should really take a look at your bills/budget. If your housing is provided, how are you spending so much money on bills? My husband and I lived on an income of $2600k per month and we were able to pay all of our bills and catch up on some (not credit cards). Now our income is around $40k. And we have enough to put $1000 in savings every month, and we pay $775 in rent every month. I'm just not understanding how you could not afford anything....Anyways....

You should probably understand that if you continue to choose to not pay anything, they can garnish your wages, in some cases, up to 25%. They will take your tax refund(which really, you should have high exemptions so you get a higher take home pay.)Good luck getting into another school and even getting some jobs because it is highly frowned upon to not pay your student loans. If you have enough to put in savings, you have enough to pay, and that is exactly the way that they will see it. Yes, it sucks. And no, they do not go away in a bankruptcy (just went through one myself!)

On a side note, until you accept the fact that choices you have made have put you in this position, you will go nowhere. You seem to want to blame the government for the hole you are in. No one forced you to take out a giant amount in student loans. Yeah, the choices we make suck sometimes, but until we accept the fact that the choices we made created the problem, then we cannot fix the problem. Don't take this as a personal attack. I've been there too. It is not easy to sit back and realize that the things I did got us into a hole. But I was not able to figure out a solution until I realized that my choices were the root of the problem. BTW- we all make mistakes and there is no shame in that. You pick your feet up off the ground and you continue forward. Also, you seem a little bitter. You have much more than many people have, so for that, you should be thankful. Good luck to you, and just ignore the judgy people.

Just wanted to add, my husband was 6 months past due and wage garnishment was 1 month away with Sallie Mae. It was more stressful than when we filed for Chapter 7 Bankruptcy (and we filed without a lawyer!). I have never been so worried and frightened. My husband wanted to go back to school and I was so afraid that he would default and not be able to. But it worked out, thank goodness.

hiddencatRN, BSN, RN · Jan 22, 2011

Full time paycheck 793/week (before taxes)
childcare 420/week
gas 50/week
insurance 100/week
Student Loans 200/week
These are conservative numbers too.

So if you figure in taxes, you come up a short, but still paying something towards your student loans. Right now you are not paying student loans at all? I think it would be easier to negotiate with the loan companies if you are offering at least a partial payment. Have you consolidated your loans? Is that an option?

I just want to impress upon you how much of a headache defaulting on a student loan is. It doesn't take the burden off or lighten it at the cost of your credit- it allows them to be more aggressive in collecting the debt and potentially means you have even less say in how they get their money.