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My Student Loan is Almost 30 Years Old and I’m In Collections. – Dawn

“Dear Steve,

I currently have a student loan that is 27 years old. I was 17 years old when I was offerred this loan, and really unaware of the rate of interest, penalties, etc. I divorced from my husband at the age of 19 (due to the fact that he was physically abusive), and in the divorce decree, it was ordered that he pay child support for my two children, and he pay half of my student loan.

The initial loan was for $5,000, and I just received a bill from Coastal Collections, requesting immediate payment in the amount of $22,000.!!!!!!!!! I actually offerred them the full principal amount of $5,000 and they counter-offerred @ $17,000. I am unemployed, have guardianship of my three grandchildren, and am starting an Ebay business. (struggling to keep our heads above water).

Long story short, they refused my payment, and have been harrassing myself and everyone in my family. Can this debt be forgiven after 27 years, if not, is there any way that I can pay just my half of the original loan, or even make an offer and comprimise? I realize that this is my debt, and it has been given to so many collection agencies over the years, that every time I make contact with the new agency, I get a different story, and more grief. Thank you for any advice you can give me.

Sincerely, Dawn”

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The Answer

Dear Dawn,

The most important issue is if this was a government backed student loan, which I believe it may be since the statute of limitations would most likely have expired on a private student loan long ago.

I would suggest you look into the Income Based Repayment Program to get your student loan payment down to as low as $0. The monthly payment will be based on your income and circumstances and it sounds as if you qualify. If you pursue this option and it is granted it will go a long way towards making this a less stressful situation for you since you’ll be out of collections.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

My Student Loan is Almost 30 Years Old and Im In Collections.   Dawn
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Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • dra

    Dawn – Along with AWSD’s information, understand that YOU did nothing wrong.. Congress has retroactively changed terms of re-payment twice since you signed your loan papers, and the industry was “privatized”, often without telling borrowers what those changes really meant… and you are NOT alone.

  • http://www.facebook.com/groups/forgivestudentloandebt/ WritingDetail

    Steve, since Dawn’s loans appear to be in ‘collections’ I don’t believe she has ANY option of reasoning for ‘federal’ Income Based Repayment (IBR), UNTIL her account is brought ‘current’. ONLY then would she be afforded an IBR opportunity. A ‘forbearance’ to bring her past-due ‘current’ would NOT even be an option, at this point! Being in ‘collection’ status is a borrower’s worst case scenario – frankly, its nightmare!! …In any case, assuming that she’s perhaps not in collection, rather JUST BEING BULLIED by whomever her loans happen to be “slabbed out to,” she has most likely already used any & all limited-time ‘forbearances’, anyway – speculating based on the 30-yr old age of her loans, along with her personal circumstances! Subjectively this should be a no-brainer; this LEGAL GUARDIAN TO 3 GRANDCHILDREN SHOULD BE AN OBVIOUS ‘HARDSHIP DEFERMENT’ CASE. But I’m willing to further bet that she’d, either, previously exhausted any & all ‘deferment’ option, OR IT’S ENTIRELY POSSIBLE – again, speculating based on the age of her debt – that she MAY NOT HAVE EVER QUALIFIED for any type of ‘deferment’, based on the date/yr of her very 1st loan!! Yes, I know that “possibility” to be FACT, as I’d, personally, taken my 1st loan out in 1993, one semester prior to the gov. incorporating this ‘safety-net (so to speak). So, no, I have not ever been privy to any form of ‘deferment’ (hardship, unemployment, or otherwise) …ever …yet, it doesn’t mean I’ve not had the need!  
     
    Unfortunately Dawn’s scenario is only one, of many, that begs the question: What are indentured borrowers supposed and expected to do, when LEGITIMATELY UNABLE TO PAY their student loans?? …The Federal Gov., as well as Society, needs to wake up, acknowledge and conclude that there has been, and continues to be, an excessive amount of “bullying” going on – especially to some of “our” most vulnerable!! This is but another unjust story that will continue to manifest beyond belief – UNLESS reform, via pending legislation is enacted: HR 4170. Currently, a third of that total $1Tril student loan debt is owed by those of “us” over 40-yrs of age …and within the next decade we’ll be re-calculating, having been joined by ALL those currently in their 30’s …

  • http://www.facebook.com/groups/forgivestudentloandebt/ WritingDetail

    Steve, since Dawn’s loans appear to be in ‘collections’ I don’t believe she has ANY option of reasoning for ‘federal’ Income Based Repayment (IBR), UNTIL her account is brought ‘current’. ONLY then would she be afforded an IBR opportunity. A ‘forbearance’ to bring her past-due ‘current’ would NOT even be an option, at this point! Being in ‘collection’ status is a borrower’s worst case scenario – frankly, its nightmare!! …In any case, assuming that she’s perhaps not in collection, rather JUST BEING BULLIED by whomever her loans happen to be “slabbed out to,” she has most likely already used any & all limited-time ‘forbearances’, anyway – speculating based on the 30-yr old age of her loans, along with her personal circumstances! Subjectively this should be a no-brainer; this LEGAL GUARDIAN TO 3 GRANDCHILDREN SHOULD BE AN OBVIOUS ‘HARDSHIP DEFERMENT’ CASE. But I’m willing to further bet that she’d, either, previously exhausted any & all ‘deferment’ option, OR IT’S ENTIRELY POSSIBLE – again, speculating based on the age of her debt – that she MAY NOT HAVE EVER QUALIFIED for any type of ‘deferment’, based on the date/yr of her very 1st loan!! Yes, I know that “possibility” to be FACT, as I’d, personally, taken my 1st loan out in 1993, one semester prior to the gov. incorporating this ‘safety-net (so to speak). So, no, I have not ever been privy to any form of ‘deferment’ (hardship, unemployment, or otherwise) …ever …yet, it doesn’t mean I’ve not had the need!  
     
    Unfortunately Dawn’s scenario is only one, of many, that begs the question: What are indentured borrowers supposed and expected to do, when LEGITIMATELY UNABLE TO PAY their student loans?? …The Federal Gov., as well as Society, needs to wake up, acknowledge and conclude that there has been, and continues to be, an excessive amount of “bullying” going on – especially to some of “our” most vulnerable!! This is but another unjust story that will continue to manifest beyond belief – UNLESS reform, via pending legislation is enacted: HR 4170. Currently, a third of that total $1Tril student loan debt is owed by those of “us” over 40-yrs of age …and within the next decade we’ll be re-calculating, having been joined by ALL those currently in their 30’s …
     
     www.agingwithstudentdebt.org

  • Guest

    Oh my Dawn, I am so sorry to hear that. And I wish that was not happening to you. I would call the supervisor of the Collection Company and ask again if they would settle, if not I would call and or write to your Congress Person and Senator and ask them to get involved. I would also call your local news paper and or write an editorial of your situation to the editor, or even get your local news stations involved. Then after all that and if you haven’t gotten any results, then I would do as the author suggests an IRB repayment plan. But, I will tell you the public doesn’t like those who pick on Grandma’s… You can find me at: http://studentloandebacle.blogspot.com/ I may have info you can use… Sorry again Dawn…

  • http://www.agingwithstudentdebt.org/WELCOME AWSD

    Dawn:

    It’s important to know that while enrolling in IBR can provide some relief, as your loans are currently in default and they must be brought current in order to participate in IBR.  You can read the specifics on IBR here: http://www.ibrinfo.org/index.php

    To determine the current status on your loans (assuming they are Federal loans, visit the National Student Loan Data System.  You will need to create an account. https://www.nslds.ed.gov/nslds_SA/SaFinLoginPage.do

    It is also important to understand that there can be substantial tax consequences to IBR.  At the end of the repayment period (25 years) the remaining balance is forgiven but that forgiven amount will be considered taxable income. For older borrowers, this tax bill comes due at a time where income are typically small and fixed–possibly only Social Security (and the IRS can garnish up to 15% of monthly SS checks for these taxes).
    This plan works best for new grads and those old enough that they do not expect to live beyond the repayment period.  
    It can however buy you some time until better options become available, so it is worth exploring.

    In March 2012, Rep. Hansen Clarke introduced H.R.4170: The Student Loan Forgiveness Act of 21012.  

    It is also known as the 10-10 repayment plan: 10 years of payments based on 10% of the borrowers discretionary income (discretionary income is defined as 150% over poverty level).

    If enacted, this bill will provide relief for borrowers of all ages and it applies to Federal loans as well as most private loans.

    For an overview of H.R.4170 please visit: http://www.agingwithstudentdebt.org/h-r-4170-campaign/h-r-4170-overview

    To show your support of H.R.4170 please sign these 2 petitions:

    http://signon.org/sign/support-the-student-loan?source=s.tw&r_by=769879  and http://www.change.org/petitions/aarp-help-protect-social-security-support-h-r-4170

    If you are on Facebook, there are a couple of great groups where you will find support from borrowers, like you.  We are all working very hard to bring about change:  https://www.facebook.com/groups/forgivestudentloandebt/  and https://www.facebook.com/groups/aging.with.student.debt/

    I encourage you to explore my website where you will find information about what is happening in the student loan industry, why it is such a mess, how we can change it and how these loans impact the lives of aging borrowers.  
    http://www.agingwithstudentdebt.org/

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