Obama Student Loan Forgiveness Program

i have a student loan for $23,000.00 i attended a school in 2000.The school was close after a couple of months. I didn’t finish now they end up garnish my checks. I was wondering if i can get some help.the loan is with SML.

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Steve Rhode Reply:
July 17th, 2009 at 7:05 am

Marie,

You may be able to have your student loan debt discharged if your school closed while you were enrolled.

The loan can be discharged if you were enrolled when the school closed and couldn’t complete the program because of the closure. If you were on an approved leave of absence, you are considered to have been enrolled at the school. If your school closed within 90 days after you withdrew, you are also considered eligible for the discharge. However, your loan cannot be cancelled because of personal circumstances that caused you to withdraw more than 90 days before the school closed. If you need to find out the day when your school officially closed, you can visit the Closed School Search Page.

For a list of contacts for closed school information, click here.

Steve

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Steve,

I was in student loan rehabilitation program with Pioneer Credit Recovery and because of the rough economy and other issues I fell behind. They are now telling me that the only option I have is to pay $33,000 “TODAY” or have my wages garnished. Is there anything I can do?

Please Help

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cwynn95 Reply:
January 28th, 2010 at 7:06 am

Go to your lender and get a forbearance (hardship), you can request them annually. OR, pay $50 a month, and they will not be able to garnish or rate you negative on your credit report. There are options so you ae not garnished. Check into it. GOOD LUCK!!!

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I would like a phone number to speak with someone about the obama grant program. Thanks

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my son graduated college in 2007 with approximately $60,000 worth of student fed/private/and some other loan that was provided by the fed at 6.5%. He has tried to consolidate these mutliple loans to reduce the monthly payment but is being told by Sallie Mae that they do NOT consolidate. he makes $39,000 pcy and his payments are approx. $800 per month. Is there any program out there that he can apply for? His debt to ratio is upside down and has been rejected by private lenders. GOt any suggestions?

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Smitty Reply:
January 15th, 2010 at 3:08 pm

I am having the same issue with my daughter, graduated college with Private/Fed loans adding up to $100,000. I can’t find help. Please share any information you receive in resolving this issue.

Thank You…………

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melissa in texas Reply:
January 25th, 2010 at 7:33 pm

my daughter and her boyfriend are in the exact same situation… incomes in this economy can not keep up with this debt…..get on as many petitions as you can!!!!!!

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sarah Reply:
January 27th, 2010 at 10:00 pm

did you ever find anything out about this student loan thing? Both I and my boyfriend are in almost the exact same boat with Sallie Mae…

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Don Reply:
January 28th, 2010 at 12:54 pm

Same here, and if a petition does go around, please fwd that along in an email, asap!

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Sean Reply:
February 23rd, 2010 at 6:15 pm

My fience and i are in the same situation. $70000 in debt and knowone will help us consolidate the loans. Sally may is by far the worst. They will not consolidate and want huge monthly payments. They are also saying that her wages will be garnished if we do not pay.

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ive heard about the obama forgiveness package i was wondering if it was true ? im a single mom with 3 kids who wants to go back to college but cant due to the fact i have a loan in default

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Steve Rhode Reply:
August 28th, 2009 at 11:19 am

It’s a scam. There is no such package.

Steve

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Our son has 115,000 in student loan debt. Two separate loans. One Federal, one Private. Federal lowered his payment based on what he makes. Private loan won’t even talk to him. He Has his degree, decided to join the Air Force to get a job in his field. Guess what, the Air Force won’t take him because he has too much student loan debt. We helped all those companies with billions and billions of dollars. And the United States Air Force says sorry.

I am still in disbelief. He has no credit card debt. He just paid the last payment on his car, he has one cell phone account. And he is too in debt even for the government. What a country!!!! Four and a half years of his life wasted. He had begun the masters program,then this happened and all has come to a screeching halt.

And the banks are garnishing peoples wages. Even after they themselves got a bailout. I know there is some sick irony here.

I only pray that the President and all the CEO’s he helped with bailouts and bonus money aren’t sleeping a wink at night. Or at least I hope they suffer from night terrors. I wish them acid reflux 24/7 and chronic mental fatigue for the rest of their natural lives. Then it is up to God what he does with them. It’s the same sentence the American public has been given, why should the rich be any better off. There should be a price to pay for being rich, greedy and always stepping on those below you in society.

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I am a single mom working at state job; I have to pay rent, utilities, buy groceries, home necessities, pay for a vehicle, car insurance, gas for my vehicle, and on top of that I have two teenagers at home. I have tried to keep up with my school loan payments because I can’t afford for my wages to be garnished, but I’m having a very difficult time making my payment. I know my payment isn’t huge–it’s $125 a month but by the time I pay for everything there are times I have to make the decision of making my loan payment or allowing my kids to join a program at school that is going to cost. Please help me in explaining what my options are. I’ve already had to quit paying on two credit cards because I can’t afford my bills anymore. In the meantime, I am also looking for a second job but it will definitely keep me away from my kids more and they are at that age where they really need me homw in the evenings when they are home from school. Please help!

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The whole student loan thing is designed to turn the free American into a slave. Once that is done, we will have a fascist Orwellian state of affairs. That’s why the banks get a bailout and the people of America do not.

It’s time for a revolution.

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rory Reply:
February 4th, 2010 at 12:07 pm

You are absolutely right. Our education system is no longer about educating our people, it’s a business just like any other corporate monster. At a young age when we are still naive and ignorant we are ushered into the idea that higher education will take us to a better life. We sign these documents before ever having much real experience in the world or any perspective on just how difficult it will be to live once we are indoctrinated into the American system of debt. The amount of money schools get away with charging us in this country is absurd. The debt numbers we accrue are so immense they become an abstraction, literally to the point where most of us just accept the fact that we will be paying this debt for the REST of our lives. We need to voice our discontent. We need to become a country of free people again. A lifetime of debt and the anxiety,misery and bondage that come with it are not worth four years at any college or university.

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Steve Rhode Reply:
February 4th, 2010 at 12:14 pm

Rory,

I’ve said for years that while some have been outraged by credit cards on campus the real tragedy has been student loans, especially private student loans. Talk about taking no prisoners, they leave their victims hopeless and without any options at all.

Student loans are assumed by many to be ‘good debt’ but in reality the majority of people that take out student loan debt never finish their degrees and are saddled with the debt for the rest of their lives.

Steve

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I know that if you enlist in the military with a degree they will pay off your student loans. Even in the reserves.
Here is a link to the Coast Guard reserves:http://www.gocoastguard.com/find-your-fit/reserve-opportunities/reserve-officer-opportunities/.
I also read that if you do some time for the Peace Corps they will pay off some Perkins loans.

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I agree..student loans are a trap
and dishonest and misinformation is given at the time they are offered
Good comment concerning making US slaves to debt and the banking system
It is time that we as citizens make noise
“is there an age cap on joining the military?
what about a civilian job with the military?
what about the health field? would that take care of the debt I have with this student loan??
thank you
Lynne

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what about a “debt settlement” for student loans??

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Steve Rhode Reply:
September 23rd, 2009 at 1:44 pm

Lynne,

Nice try. Nope. No debt settlement for student loans.

Steve

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Hello, the last 3 years have been the worst! I work for one of the big 3 car companies and have learned the more money you make the more you spend. First its starts with having a rental property with a Adj rate, and a renter who did not pay on time. I was forced to file bankruptcy chapter 7 which was discharged Dec 2007. I lost everything my home, my car and more. The problem is the house was already in the forclosure process, so its still showing up on my credit as a negative. I returned my car, and I was left with over 50k(about 20k in intrest) in student loan debt that is now in default. I understood that gov loan can not be eraised with a chapter 7, but I also had(15K) private loans with a bank, that are also still remaining on my credit. I tried to make repayment attempts with my 2 loans on in which is already consolidated, and the other one from Saliemae that a lawyer now has! The 1st loan I was making ontime payment to get out of default, but was laid of from my job after 10 1/2 and was then evicted from my apt. The 2nd loan I called and tried to make payment, but the Lawyer laughed and said that My payment was nowhere near enough and that they will continie to sue unless I paid $17,000 right then and there.

So update to 2009 I was out of work for 8 months(oct 08-aug 09) with no money coming in . I now have my job back, and trying to rebuilt my credit, and get my student loans out of default! I also want to return to school, but with default student loans I can’t get any help and my job is no longer paying for schooling!

I ordered my credit reports, and debt from 2004 is now popping up on my credit after a chapter 7 in 2007. At this point I don’t know what to do! My credit is the worst,and I don’t know where to go from here. I would like to one day be able to purchase another home, buy a car, and have good credit. Where do I start? Are there programs that will forgive my debt, or help me get out of default?

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Steve, I took a sallie mae loan out 4 years ago for my son to attend sylvan learning center. Shortly after that we had a tragic accident with my older son and the loan went into default and has been for 4 years. I have been unemployed for the past 2 years and need to go back to school to become a nurse. I have spoken to the collection agency and they will take a settlement on the account but after I pay the seetlement fee will I be able to obtain another Fed student loan for myself to go to school? I have asked about rehab. the loan, reaffirming the loan and they told me at this point I cannot, I can only pay it off or pay the settlement. I am lost and nee some advice

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Steve Rhode Reply:
December 2nd, 2009 at 11:26 am

Wendy,

When it comes to student loans, consumers have no power, control or options.

The settlement options seems like it could be a great deal for you. What specifically are they offering and can you do it?

Steve

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the original loan was for $5000.00, now thaey say I owe close to 9,000.00 because of fees. They then told me they would settle for $3500.00. My question is if I settle for that amount will it be forgiven and will I be able to get another loan in the future so I can go back to school

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Steve Rhode Reply:
December 2nd, 2009 at 2:07 pm

Wendy,

The real test is if the new school financial aid office says they can get you approved after you settle the old debt. Wow, that seems like a good offer to me. If it allows you to be eligible for the RN loans but results in negative information on your credit report it is still a good deal.

Steve

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Thank you veryy much. I am keeping my fingers crossed that this will be the case

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Steve Rhode Reply:
December 2nd, 2009 at 2:29 pm

Wendy,

Please come back and give me an update on what you learn. Your information can help me to help others.

Steve

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I am 23 years old, and have recently graduated from UM with a BA. Unfortunately, I’ve also graduated with $110,000 in loan debt, $20,000 of which is federally-backed. It’s the other $90,000 in private loans that have got me backed into a corner: From what I can tell, I have no options as far as repayment plans go, deferment or forbearance (I’m currently in AmeriCorps — which is like the domestic version of the PeaceCorps — and my loans would not defer!), or forgiveness programs. I am now at the point where I am considering bankruptcy, but I have a sneaking suspicion that I will not be eligible for even this…. Do I have any options available to me whatsoever?

My monthly loan payment is $850 for the first two years (interest-only) and then is supposed to jack up to $1100 after that! :( Can this be legal? Even if I somehow manage to find a job paying $14 or $15/hr., I would only be bringing home around $1500 net…. How am I supposed to survive on $300 or $400 per month? I went to college to have opportunities after I graduated — not to be shackled.

At 18 years old, I did not have a realistic concept of what this type of commitment meant….

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Steve Rhode Reply:
December 8th, 2009 at 3:07 pm

Kristi,

You ask if it is legal and I’m afraid the answer is yes if you entered into a contract for student loans and you were at least 18 years old. You can attempt to go bankrupt but for the most parts bankruptcy does not discharge student loans unless you can prove the are an unreasonable burden and file a Chapter 11 bankruptcy. You’ll need to find a local bankruptcy attorney and discuss all of this. In fact you can click here to find a local bankruptcy attorney that will give you a free consultation.

participating in AmeriCorp does you some student loan benefits but I believe it is an award you get after twelve months of service to be used towards future education, not to repay past private student loans. Some colleges will match the funds awarded to help the student as well.

Additionally, some of your federal loans may be forgiven as a result of your service. But that really doesn’t do anything to address the private student loan issues.

“Only AmeriCorps VISTA alumni who choose the stipend and have student loans may be eligible for up to 15% cancellation on certain types of loans. To determine what student loans may be eligible for cancellation and to receive forms, contact the U.S. Department of Education at 1-800-433-3243. AmeriCorps VISTA members who choose the education award may not claim a partial cancellation.” – Source

Steve

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Nic Reply:
January 29th, 2010 at 10:52 am

How did a BA cost $120,000? I graduated w/ a BS (same as BA w/out the language) and a teaching certificate. Then I went on to complete a MA at Johhns Hopkins. All on Student loans and my total is $52,000. I thought that was bad!

Did you apply for any aid at all and did you use loans to supplement your lifestyle too? This is the kind of debt I associate with a MD. Not a BA!

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Ed Reply:
February 8th, 2010 at 12:17 pm

ha, yes a BA today costs … My debt is $105,000 That was with help from my parents and grant from my University.

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P.S. I am so desperate, I am seriously considering selling my eggs for money. I cannot believe my life has already come to this point in my early twenties!

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vanessa Reply:
February 1st, 2010 at 11:00 pm

Kristi, I have consider to do this as well,
even to be a surragate mother as well since they pay more. I’m drowning in debt.

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Alicia Reply:
March 15th, 2010 at 9:58 pm

Wow. Ditto. I was just thinking about donating my eggs today. I’m going to live with my parents until I’m thirty five. Haha. No, it’s really not that funny. . .

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WOW! today was great for me..:)

I have been out of school for about 10 years, while I was in School I took out approx $8000 in student loans. Over the last 10 years I have had some financial problems and have deferred my student loans about 3 times, but I have always gone back to pay them after my deferrment. Last year I had a good year and so i tried to pay a little extra on my loans.

I had about $900 left on my student loans eariler this month. …

Today, in the mail I got a letter from my lender telling me the balance of my loan was being forgiven. They said it was a way “of thanking me for taking care of my loan obligation in a diligent manner.”

What? who does that? Don’t get me wrong…I’ll take it! It was only $900, but why would they do this? Is this because of some type of Obama program. Maybe someone was just trying to write off loans before the end of the year…I don’t know..but I would be curious if they had some type of ulterior motive .

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Steve Rhode Reply:
January 3rd, 2010 at 11:03 am

Jeff,

Was this a government backed student loan or a student loan from a private lender. Interesting, tell me more.

By the way, congratulations.

Steve

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Jeff W. Reply:
January 12th, 2010 at 10:01 pm

It was a private lender. I am not really sure I understand the difference, but it was a conbination of both stafford and unstafford loans. Nelnet was the one managing it.

thanks!

it feels good to be done with those loans…I feel like a weight has been lifted.

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Hello, the last 3 years have been the worst! I work for one of the big 3 car companies and have learned the more money you make the more you spend. First its starts with having a rental property with a Adj rate, and a renter who did not pay on time. I was forced to file bankruptcy chapter 7 which was discharged Dec 2007. I lost everything my home, my car and more. The problem is the house was already in the forclosure process, so its still showing up on my credit as a negative. I returned my car, and I was left with over 50k(about 20k in intrest) in student loan debt that is now in default. I understood that gov loan can not be eraised with a chapter 7, but I also had(15K) private loans with a bank, that are also still remaining on my credit. I tried to make repayment attempts with my 2 loans on in which is already consolidated, and the other one from Saliemae that a lawyer now has! The 1st loan I was making ontime payment to get out of default, but was laid of from my job after 10 1/2 and was then evicted from my apt. The 2nd loan I called and tried to make payment, but the Lawyer laughed and said that My payment was nowhere near enough and that they will continie to sue unless I paid $17,000 right then and there.

So update to 2009 I was out of work for 8 months(oct 08-aug 09) with no money coming in . I now have my job back, and trying to rebuilt my credit, and get my student loans out of default! I also want to return to school, but with default student loans I can’t get any help and my job is no longer paying for schooling!

I ordered my credit reports, and debt from 2004 is now popping up on my credit after a chapter 7 in 2007. At this point I don’t know what to do! My credit is the worst,and I don’t know where to go from here. I would like to one day be able to purchase another home, buy a car, and have good credit. Where do I start? Are there programs that will forgive my debt, or help me get out of default?

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Steve Rhode Reply:
January 3rd, 2010 at 3:42 pm

Kally,

There is no need for you to wander in bad credit after bankruptcy. The first step would be to get on a payment plan with the private loans and the Income Based Repayment plan (IBR) with the government loans. Just follow this simple process for rebuilding your credit after bankruptcy.

Steve

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If your in default you are not eligible for the Peace corp or vista or any other program out there. They want all their money up front and now and will hound you. Obama needs to think about coming up with an IBR plan for those already in default to get onto the IBR. And you can’t declare bankruptcy on student loans. And no employer will hire you when they have the government debt collectors calling all the time for the money you owe. Who can come up with 50,000 bucks! No one!

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Hi Steve!

My question is a little bit different. I’m a student college and I have some students loans. I want to buy a house but the bank its telling me that there’s a new law that says that they can count the student loans and because of that they won’t approved for my mortgage. Witch law is that? Can you please advise?

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Steve Rhode Reply:
January 12th, 2010 at 8:56 pm

Sharon,

I assume they are saying they are counting your student loans as part of your overall indebtedness. Is that correct? Or are they saying they can’t count your student loans as income?

Steve

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Sharon Reply:
January 12th, 2010 at 9:04 pm

Yes Steve,

They are counting them as part of my overall debts. They are saying that this is a new law. And I’m just wondering if anyone know something about this law and witch one is it.

Thanks

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Hi I graduated approx. 2.5 years ago. In that time I have married a british citizen and have moved to the UK. I know this may seem like a strange Idea but I am only curious if it would work… I think I have figured out a senario to where I could get my loans written off.

I would get a private consolidation loan from a bank. I would move in with my father in America. IF I could not find a job I would POSSIBLY be forced into bankruptcy at which point (since these loans would no longer be “Student Loans”) I would get my debt written off. I know it would be a bummer to have no credit so I would then move back to England where I think my credit would not follow…

Could this work?

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brifam Reply:
February 18th, 2010 at 9:55 pm

don’t have any idea what credit reporting agencies you would have in England, but if you could pay off the student loans with credit cards or other non-federal gauranteed loans, you should be able to file a bankruptcy and get rid of it all…. wish I had the option!!!! Most of us don’t have that kind of credit, especially once the Dept. of Ed sends your loan off to collection and then it gets reported on credit reports.. then you’re history.

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Hi Steve,

I left a professional school after a few years and accrued about 60k in loans. For a few years my wages were really low and I couldn’t afford to pay, but that didn’t stop them from garnishing my wages. Now I have a better paying job, but the amount that is being taken puts me right back at my lower wages. I want to pay, but the garnished amount I’m paying now is very high and I can’t afford to pay them anymore, which is what they said I would need to do for a period of time before the loan can be rehabilitated (also, they stop garnishing my wages after that time). Is there any help for me? Are there any organizations that you would recommend that would be willing to negotiate with them for me so that I can pay them and lift the garnishment? Thank you for any help you can provide!

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I got a student loan for 2,500.00 for a 6 months course got a certificate in 1985.25 years I have been paying and they keep my income taxes. Also i had a huge agruement that it was reported to credit report and it was documented 5 times a huge error, so the loan went up to 12,500.00 for a six months course and a certificate. I have tried to reason with the student loan dept. I have paid this loan off the first 2,500.00. But they continue to harrass me and garnish my wages. I haven’t worked for 1-1/2 years due to my parent suffering a stroke which left them in a coma. 6 months ago I found a company who would pay me 5 hour a day to care for my parent, I soley care for parent 24/7 no outside help of any kind.. Parents gets 500.00 SS check which only covers parents partical debts in which I pay the rest. I am waiting for the garnishment to begin. Can someone help me with this problem I have been harrassed and garnish wages I can’t afford a lawyer. what do i do

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My wage is garnished because of a large student loan debt which I am unable to pay for. How do I get out of wage garnishment? PLEASE HELP!

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Why is the government profiting on the education of its populace?

I have 180,000 in student loans. Even as an architect I am facing severe financial challenges. The minimum payments I make don’t even touch the principal balance and only go to interest. Most of my student debt is through the government at an interest rate of 8%.

My issue with all this is in part my individual struggle, but also disbelief in this system… While our government subsidizes all kinds of social programs with NO return on investment – educating its people at the higher level – which is a foundation of national growth and wealth – is allowed to reach the breaking point it’s at…

Paying the government interest on an already outragous debt…. for the “privalage” to be a productive member of society…… Most of the time I feel our country deserves to fail.

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Chris Reply:
February 1st, 2010 at 5:26 pm

Ian,

Have you looked into the Income-based Repayment Plan as a possible option? Obama announced in the State of the Union address he wants to see the monthly payment amount capped at 10% of income (after living allowances), instead of the current 15%. True that may not happen for a while… But the IBR plan forgives any balance paid after 25 years in the program (and they are talking about shortening that to 20 years), and after 10 years if you work in the public sector. I hope this might help…

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Ian Towle Reply:
February 24th, 2010 at 7:08 pm

Thanks Chris – I actually did just apply for the IBR and if I get it I will be in a much better position.

…Not to bite the hand that’s feeding me then, but this still seems flawed… seems like its fixing a symptom and not the problem… Adds a huge burdon to the government and allows schools to charge even more under the assumption that it’ll all be picked up by the government.

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I graduated from Penn State in 2008. Still haven’t landed a job in my field. When it comes to student loans my family and I thought we were doing the right thing by taking loans out both in my name and ParentPlus loans in my parents name.

I have about 25k in my name and my parents have about 75k in their name. I pay all monthly payments. I want to take advantage of the IBR system to repay all of my loans. But, I can’t do it for my ParentPlus loans. Is there anyway around this? Or do you have any tips at all to help me out. Thanks

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Jeff W. Reply:
February 2nd, 2010 at 9:01 am

I am not sure what the IBR system is, but it sounds like some type of repayment plan where someone else pays your loans. However, the loans must be in your name. Correct.

I would look into the specifics before doing something like this, but you might consider consolidting all your loans together, that way your name is on all loans. It is just a thought, but like I said eariler, look into the specifics before you do somthing like this.

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Justin Reply:
February 4th, 2010 at 1:24 am

I don’t think you understood what I said.

I am asking for help on trying to convert the loans that are in my parents names to my sole name. That way, all my student loans will be in my name and I can choose the IBR system.

IBR system is a government program that allows you to pay 15% of your total monthly income for 25 years and no matter if your entire loans get paid off, your loan is done.

If you listened to the State of the Union, Obama introduced his plan on reducing the IBR system to 10% income and 15 years. Even less if you have a public service job.

In my current situation I can use the IBR for my loans, but it is only $25k, so my payments aren’t that bad. I can use the IBR for my ParentPlus loans, but the monthly income % will come from my mothers income and her spouse combined. So that isn’t an option.

I need to figure out how I can convert the ParentPlus loans in my parents name to my name. So I can take advantage of the IBR system.

If anyone knows if this is possible, please help. Thanks.

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Ian Towle Reply:
February 24th, 2010 at 7:12 pm

Unfortunately the parent plus loans are not eligible.

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Hello, I have had a student loan from 1982, that I have been paying on for at least 20 years plus. I started with a $10,000 loan consolidated and after that many years it had sky rocketed to a whopping $21,000 plus with 9%, that’s alot of interest. I religiously made my payments month after month as was my responsibility to do so, but every year it was $20,000 and it wouldn’t go down in amount.I now have finally this last year have gotten it down to $18,800. That’s alot of years of interest, in fact my largest interest for one year was about $2500. This last year it was $1681. Granted I get to right some of this off at tax time, but I would really like to be able to use it when it is needed. I think I paid for the loan two fold already if not more. Hopefully, President Obama can help us all with this Student Loan Forgivness Program.

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I see all this help for people with federal loans, But what about me who has 100,000 dollars worth of private student loans, How am i affected? am I?

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Steve Rhode Reply:
January 28th, 2010 at 11:37 am

Derek,

The government has no control over private loans.

Steve

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Wow, you people are in deep. There is something wrong with a modern economy in which a hard-working determined individual who is willing to live frugally cannot pay off their student loans. Especially if you have a reasonable degree. Though if you have a BA in something useless i guess that is your own fault.

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I feel so sympathetic to most of you here. I went to college in 1994, and just like most of you, got student loans to assist in the cost. In 1998, when I should have been finishing my degree, the school revoked my enrollment, saying I “wasn’t a serious student” if I wasn’t enrolled for 15 credit hours. This was impossible for me to afford at the time, as I had borrowed my limit, and was paying out of pocket. As you might guess, I did not finish my degree, and it would have cost me 2 years enrollment at any of the other schools in the system to finish the same curricula.

Years later, I decided to use the credits, get a BA instead to at least tie up the coursework, and move on. I had been in academic and financial deferrment on my loan payments, and all was well.

Then, out of the blue, the office holding my loan LOST my paperwork to refile for financial hardship deferrment. (I was making less than $900 a month, and was on food stamps in order to even afford food.) They did NOT notify me that they didn’t receive my refile, and a few months later sent me a letter that my loan was going into default. I immediately purused action and sent a verbose letter to the company asking for an appeal. It was denied.

The financial corporation now in possesion of my defaulted loan sent me a statement asking for the $66,235 I owed in full as an immediate payment. I called them to try and arrange payments, as I had heard that you could get better credit, lower payments, and an easier status of default through payment loyalty over a certain amount of time.

I have a severe medical condition that requires daily (lifelong) medication and frequent rechecks with a physician. I work full time despite this, and take home about $1100 a month.

When I asked if I could get on a low monthly payment plan, the associate said the minimum was $580 per month and when I told him that was impossible, he was rude, made very insulting comments and did NOT offer any options. He insisted I was irresponsible and yelled “didn’t I have a DEGREE that I was making money with to pay the bills?!”

At any rate, the representative said that they could garnish my wages for that amount. I spend $675 on rent, and $150 on medications and copays a month. That doesn’t LEAVE $580 to make a student loan payment. Is it LEGAL for them to take over 50% of my income in garnishments? Is there anything I can do to avoid that?

It’s almost as if they would rather I live in a cardboard box on the street than actually try to make a living and PAY for my own way…

Very frustrated… any advice would be very appreciated.

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Hello, I have a student loan from 1988 that was in default.$4500 principal $10,706 fees and interest. I am currently in a repayment program with Financial Mgmt. Systems (FMS). They first told me the Dept. of Ed was willing to take a settlement of $2300 dollars to be paid up front now, and I would have to continue to pay $150 a month
for 9 months and I would be done. I asked to send me that in writing which they did. The 2300 had to paid in full by a certain date which I had deducted EFT out of my checking account paid well before the deadline date. Next I received a letter from FMS claiming they did not get the payment in time and the offer is now null and void, so I still owe the full amount. I made calls only to get circle talk about the settlement was for a previous judgement, etc.,but still acknowledged getting the payment and just continue to pay the $150 dollars for the next 9 months. So I asked what happens after the nine months and the response was, then you will pay whatever you can afford. ??????????? Any comments. Should I hire an attorney to reclaim the settlement. I have the letter along with my paid on time bank statement..Thanks

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How do I apply to get my student loans waived. I am in the health care field and I have heard if you are in the health care field, Obama has waived student loans because of the need for health care professionals. How do I apply for that program?

Thank you

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My husband and I both have graduate degrees which have totaled more than $180,000 between the two of us. Our student loans are consolidated via Direct Loans the government student loan agency. They are not consolidated together. How will Obama’s loan forgiveness plan work for the total debt? Will the 15% of income limit be for a married couple or will we have to pay 15% of our income on each loan which could end up being a lot of money?

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Steve Rhode Reply:
February 3rd, 2010 at 10:16 pm

Liza,

The 15% plan already exists today and is called the Income Based Repayment Plan or IBR. Follow the link to check it out.

Steve

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Justin Reply:
February 4th, 2010 at 1:29 am

From my understanding of the IBR, it takes into account your income and your spouse income. So I’m assuming you would need to combine both your incomes and take 15% of that for your loans and then combine your incomes again and take 15% for your spouse loan.

If you consolidate both your loans together and take 15%, I think it would still be the same amount either way.

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I had been going to community college for a couple of years while working full time. I am smart, but come from a low income back ground, so I had to work my way though school. In 1995 I transferred into the University of Texas and became a full time student. I was studying biology and psychology with an interest in neuroscience. In order to get grant money for tuition financial aid is very strict; you have to go full time and can not work more than 20 hours a week. So in order to have food and rent I had to take out student loans.

At first I was very skeptical about getting them even though at the time I heard nothing but good things. So I made sure I asked very important questions. I asked “Am I protected under the same consumer laws as regular loans and debt?” they said I was in fact more protected. The loan was guaranteed and had many federal protection programs built into it. I asked if the loan could be frozen or if the interest accrued while I looked for a job post graduation. They said since it was subsidized by the government it was very low simple interest that does not compound like other loans. No I am not making this up a loan officer actually told me this! I also asked if there were any service that would help forgive some of the loan and they said yes like AmeriCore and the National Guard – which is true to a point. So I took the plunge and racked up $40,000 by graduation time 1999; just in time for the dot com bubble bust.

My first, second, and third job post dot com speculation era did not pay for much; it is just a good thing rent at least was cheap. I called the US department of education since I could not pay the full amount to see if there was a program for those who could not afford the full amount. They said all they could do was extent the loan from 10 to 20 years. I only had $100 extra a month (I only made 1400/mo.) to spare at the time but they wanted about $260 minimum. So it went into default. By the time I could afford the $260/mo a few years later the debt collection agency (US department of education will not talk to you when it is in default. They have a contract with the debt collection company to allow them all money collected until the loan is rehabilitated) said that I needed to pay $590/mo minimum. It had ballooned to $60,000 by 2007.

In the final chapter of my adventures a company called West Asset Management sends me a notice every 6 month that they are about to garnish my wages. I now make about $50k/yr but I have to support a wife who does not work and 3 children. West Asset Management says they will not take any less than $990/mo and the loan is now $99,000. So every 6 months I have been sending in an objection form on the basis that it would cause us financial hardship and they stop the procedure. However this last time I forgot to add in the tax return and they rejected my request so I quickly re-applied to the objection. Unfortunately now the garnishment has taken effect and is eating though our savings as we wait for the new objection to go though. That will teach me to mess with the government!

1. I would have never applied for the student loans if the interest and fees were properly explained.
2. I would have never got the student loans if I had known I was giving up my consumer rights.
3. I would have never got the student loans if I had known how corrupt the system of lending is.
4. I would have never got the student loans if I had known there are no workable fail safes.
5. I would have never got the student loans if I had known that I would be lied to and lead astray.

We need student loan reform. Just keep it simple! Invest in intelligent and talented people’s future since they create the resources and tax base. Give them low interest options, like 2% fixed, and limit total interest and loan length. Income based repayment (IBR) should be available to everyone who it applies to especially people in default.

Incidentally the law “technically” currently allows people with defaulted loans to apply for IBR plans however according to the US department of education since they are not in a current plan they are not “practically” allowed to. – Technically but not practically: Wow figure that one out! –

I personally do not know what to do about my own situation.

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I want to go to school so much and finish a degree. i have just study and not work. im not one of those smart overachievers i guess, but i need to study allot and not be distracted by living expenses. i think that the country needs and wants more educated people and i think that education is one of the greatest things that there is in life. like health care i think that education should be much cheaper and/or affordable.

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Why doesn’t the government mandate a standard, across the board interest rate for student loans? Two or three percent for EVERYONE. Just because your parents make a decent amount of money doesn’t mean they are paying for your college tuition and expenses. I have private loans with significantly lower interest rates than my government Stafford loans. And this “loan forgiveness” makes me so angry! More than likely you aren’t going to get your dream job right now, but you suck it up, work where you can and pay your damn bills! Take some responsibility people! College is a privilege, not a right.

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I graduated with a Bachelors in 2001 and came into the corporate world only to find companies laying off instead of hiring. My degree is still not satisfied and my Federal and Private Loans want their money. I am in about $70,000 worth of debt. Ive been on and off paying these loans throughout the years because of life’s obligations to live life. My taxes were taken away this year and I think its very unfair that I cant get relief. I never thought I would say this, but I wish I never went to college. I wanted to push for a masters, but I dont even have a chance with debt like this. What do u do when all u want is a higher education and a better life to live with the benefit of the $$$$$ *shrugs shoulders* I had a conversation with my Aunt the other night and she told me to that Obama had a forgiveness program. I hope this will help me because all I can do now is to asks for GOD’s help to guide and lead me in a better direction.

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Ian Towle Reply:
February 24th, 2010 at 7:28 pm

I know exactly how you feel…. Education is no longer the single route to a productive life. My best friend growing up works in the trades and already has his own home, family and savings… I work as an architect, but I have been buried under debt and living in a converted attic. I hope you and I both get some relief with this IBR.

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I graduated from law school in 1991 with a loan balance of $28,000. I made payments on the loan in accord with the payment schedule for 10 years. Then as luck would have it I was out of work and temporarily actually had to take work as an $8/hour security guard. Student loans went unpaid and into default. When I finally got back on my feet with a good legal position, and inquired aboout starting repayment of mt loan, I was informed my balance was now $43,000. Yes, that’s $15,000 more than the ortiginal balance and after 10 years of repayments. I refused to pay that rip off and of course eventually they garnished my wages, but I will be dead and buried before the loan is paid off….about 90% of the garnishment goes to interest. What a wonderful world!!

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I graduated in 2008 with an accounting degree. Prior to attending college I had screwed up my life with some legal situations. I chose to put myself through college because I thought it would be a good way to turn my life around. Boy was I mistaken!
Over the few years that I attended college I managed to accrue loans adding up to around $48,000. I couldn’t find a job after graduating because the economy just sucks. I managed to get a forbearance on some of the loans but now my loans are around 60,000 because of compound interest.
The only income I receive is GA and SSI which equal only $674 a month. My loan payments are $600 a month. This doesn’t include the rest of my bills which total around $500 per month.
Right now I’m only able to eat and survive through my parents. I’m 30 years old and I’m still forced to get help from my parents. My parents just both went on social security so things are not looking good. Where is the help in this country? How can anyone survive off of $50 a month in food stamps and only $670 a month when the student loans in themselves cost $600 a month?
Is there anyway that we can voice our situations to legislation or something? I know of at least 6 other friends who are pretty much in my same situation.

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To Maxwell Strang:

You are most likely eligible for the IBR (Income Based Repayment) plan that went into affect at the beginning of 2009. Get ahold of whoever holds your loan and demand IBR, which means your monthly payment cannot be more than 15 % of your income, and after 25 years, the rest of your debt is completely forgiven.

To everyone else: NEVER EVER ALLOW YOUR LOAN TO GO INTO DEFAULT. Once it’s in default, you have almost zero options. Get ahold of your lender before you default. Stay atop of your loan; know what’s going on with it. It’s irresponsible to ignore your student loan. There are many options to avoid defaulting on student loans. Lenders DO NOT want you do default, and they will work with you to find a solution to avoid that situation.

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I had a disability discharge, all but one loan was discharged. Sallie mae said that loan lost it’s insurance because they could not contact me. Yet every other servicer could and I was in the national database. The loan is 17 years old started at 2,500 and is now 6,000 or more, afraid to look. I fear Sallie mae will offer a settlement then after paying the settlement say I still owe the remaining money. I want to sue sallie mae, should I do it after I pay the settlement or try to pay off the full amount they say i owe then sue them for the money back? Is there a 20 year statute of limitations on student loans? Is it still a student loan if it lost it’s insurance?

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I currently have a consolidated Sallie Mae student loan for just over $13,000.00 – more than half of which is interest. The loan date is 3/14/89. Original loan amount was $5279.00. However, due to many financial hardships due to unemployment, layoffs and low paying jobs over all these years, I had taken forebearances and deferments on the loan. The most recent unemployment deferment ran out November 2009. I was laid off for almost a year. I am now working again, however, the loan payment which was suppose to start in Nov. 2009 is $199.53. I have substancial household expenses which I am trying to catch up on and could not and cannot pay that additional monthly payment. I have been in contact with Sallie Mae since November but the only option they say I have is to “apply” for the IBR. They are “requiring” me to submit IRS info. which includes my husbands info. This is my loan from years ago before we were married and the financial information should be mine alone. Can they do this? The loan is currently 120 past due. I a afraid they will garnish my wages. If I start making a payment of $50.00 a month, will this prevent them from taking further collection action?

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