just wanted to know because i have a friend who quit school but never made student loan payments and now the student loan people are looking for her.
2007-01-31 22:44:19 · 7 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ Other - Taxes
depends when you took out the loan, after 2000 they can take it straight out of your pay check. they couldn't take it out of your income taxes, that is money that belongs to the government.
2007-01-31 22:48:34 · answer #1 · answered by offlicence 2 · 0⤊ 0⤋
I have a student loan too. I'm pretty sure it's way more than your friends $140,000, or $250,000 by the time it is paid off. They won't stop looking for you, it doesn't matter if s/he quits or ever use the education.
They will take it out of income tax REFUNDS. I don't believe they take it out of your paycheck, but they'll ruin your credit so you can't buy a home or car on credit. You can't claim bankrupcy for a student loan. They'll have computers call your friend once a week.
When I first learned all this, I was scared to death, but let me tell you something you might not know- they'll give you 30 years to pay it off- I originally thought it was 10. Plus, there are up to 5 years (60 months) of deferment- which means you can delay the start of the payment if you have some kind of financial hardship. However, if you start paying and keep paying, they lower the interest.
If your friend can, finish school, and talk to the student loan people- there is a saying: When you owe the bank $5,000, you have a problem- when you owe the bank $50,000, the bank has a problem. Good luck.
2007-01-31 22:52:52 · answer #2 · answered by Anonymous · 2⤊ 0⤋
I think that legally they have the right as any person does to sue you for the money, but that until then the worst they can do is harass you and increase the interest.
There is an option to repay with an income sensitive plan where the amount owed changes according to how much you earn, but that generally is going to mean that the interest rate will be higher in the long run compared to a fixed plan. Repayment is your obligation but if you can't make your payments on time, no one can force you to repay them without a court ruling, which seems extreme in terms of the hassle (ie. money and time) it would take for a company to decide to do that.
If your friend's school is able to help her forgive part of the loans, it might help. Find out about the school's tuition refund policies- if you can prove that her problems were medical, or if you can help the school understand why she had to quit, there may be someone in the financial aid department who would be in a position to help her forgive some of the owed tuition. For most schools there is a 50% refund with a health issue, and in some cases (though it's rare) it will include psychological issues.
2007-01-31 22:49:24 · answer #3 · answered by sandra_panda 6 · 0⤊ 2⤋
Yes they can and they have. If you are married however, you can file a form that' shows it's unfair to your spouse to lose their share of the return, and they have to refund most of it. We did this and got back about 2/3rd of our yearly refund. It was better than nothing. But I can tell you if you are smart you'd pay a chunk each year to get it paid off.... if you have to file for deferments you are entiltled to plenty... you have to prove financial hardship but it's not hard. I have only paid for 3 years out of the past 10, because of health reasons. They set up automatic payments for those years...you get a better credit rating as well. Then go back into deferment or forebearance. If you are permenently disabled your debt will be completely forgiven, but you can never get any student loans for yourself or help for your children. They can get their own, just not a parent loan.
Also default on credit cards is not half as bad on your credit rating [not that I suggest this...thankfully I have A'+credit] but defaulting on a student loan will haunt you forever, Its government backed and they can/will find you.
There is a form, if your filing bankruptcy for half to be dismissed, if and only if you've paid on 4-5 /half of the loan... [I'm not 100% sure of this, I found this out AFTER the fact-- but I wouldn't have qualified anyway.] If your in bankruptcy -waiting period before....they will put you into a defernment instantly. Because "They" know you can file a special form, They will not tell you this thou. It has to be approved seperately from a judge thou.
If they find you are working, no financial hardship... regardless if you are struggling, they can submit for a wage garnishment. I had a friend who was a single mother that this happened. And you can't do anything about it.
I've never had a bad experience thou if you call them and they are very nice to work with you. Believe me I heard many horror stories, and when they were so nice, it' was a great relief. As long as you state you really want to work something out... but right now is a medical /family hardship....they will help.
2007-01-31 23:10:38 · answer #4 · answered by Dishearted 1 · 1⤊ 0⤋
Yes they can. The same thing happened to my husband and they just withdraw your taxes until you pay up your loan. I believe if you call them and set a payment plan then they don't withhold your taxes.
2007-02-02 06:53:11 · answer #5 · answered by Annie E 1 · 0⤊ 0⤋
yes they can take it out of you tax refund. they can also take it out of your paycheck. students loans will follow u around for life.
2007-01-31 22:59:51 · answer #6 · answered by Miki 6 · 0⤊ 0⤋
From what i hear Yes
2007-01-31 22:53:29 · answer #7 · answered by Denny O 4 · 0⤊ 0⤋