I graduated from college in 95 and am still trying to pay back my student loans. I lost my job couple of years ago so I got a forbearance on my loan until I got back on my feet. I need to start paying it back next month and my payments will be $385/month. I only make $1,500/month so I won't be able to pay it. What would happen if I just defaulted on my loans?
2007-10-03 16:44:41 · 10 answers · asked by Tracy L 1 in Education & Reference ➔ Financial Aid
I don't think it's worth the risk. If you default and since they are federal loans, you are liable to lose any income tax refund in the future. If you call them and cite financial hardship as your answer, or if you consolidate them, you should be able to work out a better deal. Also, try becoming a teacher with a poor school district. In some areas, school loans are forgiven, atleast partially, if you teach in a lower income school district or city. You made it through college so I know you are smart enough to research your options. Try getting a second job just for your school loans. but whatever you do, do not default on a federal loan. If you ever want to establish any kind of decent credit, this is crucial.
2007-10-03 16:52:40 · answer #1 · answered by mrsL 2 · 1⤊ 0⤋
They will start taking your income tax return, garnishing your wages, you'll never be able to buy a house, or a car, because your credit will stink. Defaulted student loans NEVER go away. For some strange reason people think that if they are really old, they just disappear. Not the case...
Oh, and if you do go into default, they legally start adding all kinds of fees and higher interest rates onto it... so a loan that might have started out at 5000.00 will quickly become 15,000. Here is a publication, in the back is a good bit on default.
2007-10-03 17:30:40 · answer #2 · answered by Anonymous · 0⤊ 0⤋
It may be uncomfortable, but you need to be honest with your lender about your circumstances. They may give you a really hard time at first, but ultimately they would rather get something less each month, than nothing at all. Figure out a personal monthly budget, including what you can pay toward the loan, and have it with you when you talk to your lender. You need to start building a good credit history as best you can. Lots of businesses look at a potential new employee's credit history these days, and equate credit responsibility with work responsibility. You may not get hired for a job you're otherwise qualified for, if you have bad credit. Not to mention how difficult it will be to buy a car or house in the future.
2007-10-03 17:10:08 · answer #3 · answered by legendatz 4 · 0⤊ 0⤋
they are right, call and make some kind of arrangements. More often than not, they will be willing to work with you. Your contact with them shows good faith that you are making an effort to pay them back.
If you just ignore them, you will be reported to the credit bureau, you will be sued, then you will be responsible for attorneys fees also and have a judgement on your credit, and they will garnish your wages. They will also get any income tax refunds you may get until the loan is satisfied.
Call them, work out something you can live with.
mavin
2007-10-03 16:54:51 · answer #4 · answered by mavinakdel 4 · 1⤊ 0⤋
Most student loans don't EVER disappear... You are looking at the short term. Right now, you are unemployed, but the student loan debt will follow you for 20, 30, 40+ years.
2016-04-07 02:54:59 · answer #5 · answered by Anonymous · 0⤊ 0⤋
The consequences of student loan default are serious and extensive - here's what you need to know:
- Defaulted loans are reported to national credit bureaus and can remain on your credit report for seven years.
- A defaulted loan may be turned over to a collection agency. They often charge collection fees as well as attorney costs, all of which become part of your debt.
- A defaulted loan is listed as adverse credit on your credit report, which can mean not being able to obtain a credit card, car loan or mortgage.
2007-10-03 17:30:13 · answer #6 · answered by Anonymous · 0⤊ 0⤋
Sorry buddy I think a second job is in your near future.
You cannot file bnkrpcy on student loans.
And they will garnish your wages if you fail to pay.
2007-10-03 17:02:10 · answer #7 · answered by PeachJello 6 · 0⤊ 0⤋
They could garnishee any wages that you get. And you
might be worse off. I am so sorry that you have found
yourself between a rock and a hard place. Doesn't seem
fair somehow. Why don't you talk to them and tell them
how hard it is for you to pay the amount you have to. I
don't know if it would help, but it is worth the try.
2007-10-03 16:55:02 · answer #8 · answered by Anonymous · 0⤊ 0⤋
if you have a co-signer they will go after them. if you do not have a co-signer then your student loans will go into collections. i am in the same boat you are - although i have a payment of $750 on one payment - I give them $50 a month. by law, if you are sending them any amount of payment, they can not go after your co-signer and/or put you in collections. you will be harassed by the student loan company b/c they want their full payment.
2007-10-03 16:56:53 · answer #9 · answered by KDW25 3 · 0⤊ 0⤋
they could revoke your diploma (JUST KIDDING). Call and discuss the circumstances with the lender. Indicate what amount of payments you CAN PAY each month and if they agree, MAKE THOSE PAYMENTS IN FULL AND ON TIME. Failure will destroy your credit record and history.
2007-10-03 16:50:34 · answer #10 · answered by Mike 7 · 1⤊ 0⤋