I’m Headed for Retirement, Owe $345K on Student Loans I Can’t Afford, and I’m Afraid – Douglas


Dear Steve,

I’ve been getting forbearances forever on this loan. I think it is a federal (not private) student loan. And now the balance is up over $345,000. I am 62 years old. At some point I will no longer qualify for a forbearance.

How can I avoid my nightmare: the government garnishes my Social Security payments to pay down this loan?



Dear Douglas,

Let’s hope these are federal student loans. If they are private you might be screwed.

For both federal and private student loans the forbearance option is a reasonable short-term solution if you just need some breathing room to get over a quick hurdle. As a repayment option, it utterly and totally sucks.

When you are given the pleasure of not making a payment with forbearance, interest begins to accelerate and the unpaid balance grows faster and faster. It’s always interesting that many people select forbearance when they can’t afford their loan payments yet it only make the loan less affordable in the future.

At this point the first option would be to look at putting your federal loans into a new Direct Consolidation Loan and then opting for an income driven repayment plan. This would give you a monthly payment based on your income. And when you move into retirement or a lower income, then your payment would go down as well.

Like forbearance, the income driven repayment plans can grow your balances since the reduced payment you are making may be insufficient to pay the interest. You should read this to understand the downsides.

After 20-25 years in one of these programs, the remaining balance owed would be forgiven. This approach will prevent you from falling into collections which could increase your balance due by 20% or so. It will also prevent you from going into default which could lead to a tax refund intercept or an Administrative Wage Garnishment of your Social Security.

See also  Who is Reputable to Help Me Get My Student Loans Forgiven? - Bella

I think you are just going to have to come to terms with the fact you may never repay this debt but this strategy will also keep you out of trouble.

If you want to easily confirm if these are federal student loans you can login to the National Student Loan Data System and verify your loans are listed there. Only federal loans are listed in this database.


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1 thought on “I’m Headed for Retirement, Owe $345K on Student Loans I Can’t Afford, and I’m Afraid – Douglas”

  1. Dear Douglas, Steve Rhode was very helpful and encouraging to me before, during and after I filed my Adversary Proceeding as part of my Chapter 7 personal bankruptcy last year. I did not have an attorney and I won a full discharge of nearly $130,000.00 without a trial in Federal Court in Alexandria, VA just a few miles from the Washington D.C. Dept of Education’s office!

    I continue to offer help and advice to others like myself who have reached the point of no return with student loan debt. I offer help on my personal blog site: http://www.unduehardship-povertyrequired.com. Steve Rhode has re-published many of my articles on his site, and I so appreciate his hard work. If I can be of help follow me on my blog and comment there and I will get back to you! Again Steve has been a great friend and help to me and I am happy to call him a friend! God Bless America! Richard Precht, Minn, MN

    PS: I also have a friend (a lawyer) in California who owed about $350K in student loan debt. He is about 59 years old and he WON his case in a vicious battle against the DOE and their paid “shills” both of us did our own case work by doing our own cases and spending over year of preparation! Learning all you can about UNDUE Hardship cases and the process involved is the key! I read and re-read thousands of cases to become knowledgeable enough to take my case to court! The US Attorney and Judge settled my case in less that a week! If I can help let me know!


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