I have no idea if you can help, but I served almost 9 years active duty in the Marine Corps and I have a private student loan (Key Bank) that I cannot make payments on at the moment for $62,000.
I was recently honorably discharged from active duty after having my first daughter and have fallen behind on payments and as a result, my credit has went down 100 points in a couple weeks.
Are there any relief programs for veterans? I have my full GI bill and am looking for options. Thank you. Any help is much appreciated.
When it comes to private student loans, no. They are a loan like any other. The only option I see is either a strategic default or a look-see to check if the private lender violated your rights while you were on active duty. You’d need to talk to an attorney who is licensed in your state for a legal review. Outside of this you will need to take more aggressive steps.
For example, if you requested an interest rate reduction while on active duty under the Servicemembers Civil Relief Act and it was not processed correctly, you may be due some relief. Some active duty service members were also sent to collection, improperly. That is/was a big problem.
Unfortunately the GI Bill may not be used to repay student loan debt for education that was already obtained.
If the lender is not willing to assist you then you have a few options.
1. You can file bankruptcy if you have other unsecured consumer debt to make room for your payment.
2. You can talk to a bankruptcy attorney to see if some or all of your private student loan may be eligible for elimination in bankruptcy, See These Private Student Loans Can Be Easily Discharged in Bankruptcy.
3. You can strategically default and hope to negotiate a better deal. See Top 10 Reasons You Should Stop Paying Your Unaffordable Private Student Loan. This can be an effective solution with major potholes and dark corners if you are not well prepared.
At this point worrying about your credit is the least of your worries. It’s easy to rebuild credit.
I would suggest you contact my debt coach friend, Damon Day. Since you are past military, Damon and I both have a fond place in our hearts for people who serve.
Coming up with a student loan battle plan with Damon will give you a roadmap forward instead of wandering in darkness. Imagine running into a battle with the enemy with no plan, silly. Same thing applies when dealing with debt issues for which you have no experience.