Defaulting on student loan?

[Anonymous]

Anonymous wrote:Has he looked into income based repayment?

There is no income based repayment for private loans!

[Anonymous]

Go to http://studentaid.ed.gov/repay-loans/understand/plans/income-based to review your options for his federal loans. I would suggest if at all possible to avoid default. As previously noted, even if he were to file bankruptcy, students loans cannot be discharged.

[Anonymous]

There are rare cases where student loans can be discharged in bankruptcy, but I don't think you come close to meeting them. Stuff like it is just about impossible to pay them back ever due to illness or a disability.

[Anonymous]

Can he consolidate his loans to make a smaller payment? It'll cost more in the long run, though.

[Anonymous]

Anonymous wrote:

Anonymous wrote:ok so once you default they have two years to harass you. They get removed from your credit report in 10 years...so really it is just like a bankruptcy. (Education 10 years, all others 7 years). After two years they can not call you anymore. The federal loan can garnish your wages. Your credit will be ruined for 10 years. but if you default make no effort to pay it back because it will not matter. Your credit is jacked at that point. So don't get married for 10 years, make sure your credit is great, the house will just be in your name, but he will never be able to get anything.

This is not quite right. They can still sue you for the loans up to the statute of limitations, so it is not really like bankruptcy.

So, if I am understanding this correctly, "defaulting" means, you've stopped paying. They can then harass you (understandably) for two years. What does this harassing consist of- phone calls? Visits to the home (that seems extreme though)?
Then what? You're credits in the shitter, you won't be able to get any home/auto/personal loans, etc for a LONG time?

Can PP explain the suing thing? So, Sallie Mae can actually sue him if he defaults- when does this happen and is this usually what they do?

[Anonymous]

OP here- thanks for your help PP's. However it's really not helpful to say "dump him". My question wasn't whether or not I should be with him. I just wanted advice about the student loans.

[Anonymous]

Anonymous wrote:OP here- thanks for your help PP's. However it's really not helpful to say "dump him". My question wasn't whether or not I should be with him. I just wanted advice about the student loans.

I wasn't one of the "dump him" posters, but I do think it's a bad idea to start a marriage with someone who is defaulting on their student loans. What if you have a health crises or something happens and you're unable to work, you'll likely have to depend on his financial support. In addition, to garnishment they can also levy his bank account if they have access to the number, i.e., he's made payments on his loans previously and they have his banking info. He's going to be pretty stressed constantly worrying about them coming after him once in default. Tell him to just get a second job.

By the way, roughly 16 years ago I defaulted on a student loan. I was married then and the IRS took our refund; however, there's a innocent spouse form that you can submit. I was relieved to finally pay it off. They called often and sent me notices for roughly two years. It took me awhile before I could return to school. I felt like crap during this period. Just tell your fiancee to get a second job. This situation will give you a peek into his character. Good luck to you both!

[Anonymous]

OP, first of all, your fiance needs to get his shit together. He needs to figure out a way to use his degree and start paying back the loans. If he finished his degree, he can make more than 30k a year, at least with a second job. If not, he needs to finish that pronto. No talk of going back to school (and another program would cost an additional 100k) until he has a solid plan to pay of these loans.

Like others, I encourage you to view his actions and behavior in this matter in the context of how you expect your partner to behave and how you view financial responsibility. If he casually took out 100k to get a degree in art history, decided he doesn't like art history and now makes $10 an hour as a shift manager at Starbucks, that's an indication that he will continue to make poor decisions in the future.

If you decide that you must stay with him, I strongly advise you to work this out with a financial advisor. It may make more sense to delay the marriage (on paper) until he gets his financial house in order.

Is this guy really worth taking on a lifetime of bad financial decisions or waiting 8 years for?

[Anonymous]

Time to tend bar or serve brunch on weekends.No other solution unless his parents are rich.
The loans are growing and growing.

[Anonymous]

I agree with previous posters, he needs to get a 2nd job or a higher paying job. If he has personality for it, what about sales? Sales rep for medical or research are able to make decent base salary and get car and bonus structure. My husband worked in this field in Boston for many years, he was successful and total comp well over 100k and with only BA.

I'm an NP and it is hard to pay off master's loan on NP salary even without starting with prior debt. Recommend going to cheaper school like Umass or doing something like national health service corp where they pay for school in return for working for them after in underserved area

[Anonymous]

Also, if he defaults, he will not be eligible for any other student loans. So future degrees will be an issue.

[Anonymous]

Anonymous wrote:

Anonymous wrote:ok so once you default they have two years to harass you. They get removed from your credit report in 10 years...so really it is just like a bankruptcy. (Education 10 years, all others 7 years). After two years they can not call you anymore. The federal loan can garnish your wages. Your credit will be ruined for 10 years. but if you default make no effort to pay it back because it will not matter. Your credit is jacked at that point. So don't get married for 10 years, make sure your credit is great, the house will just be in your name, but he will never be able to get anything.

This is not quite right. They can still sue you for the loans up to the statute of limitations, so it is not really like bankruptcy.

There's no statute of limitations on student loan debt collection.

[Anonymous]

Anonymous wrote:I agree with previous posters, he needs to get a 2nd job or a higher paying job.

+1. He's only making $30K per year. If he works full time, then he's only making about $14.5 per hour, so basically he's decided to completely ignore the training and education that he borrowed to get. Well, he's still responsible for paying it back.

$600/month is $150/week. Current minimum wage is $7.25 per hour. If he works 20 hours per week at a minimum wage job, he'll make the payment. If he can make $10/hr then he can do it with 15 hours. Another option is for him to talk to his employer if there are other jobs around the company that can be done. Evening janitorial jobs may be an option. I know someone who extended their work day 2 hours every day and in the middle did the mail courier runs between buildings and customer sites. Another joined the receptionist team and manned the front desk for an hour every day when the receptionist went to lunch and got 5 hours/week more (at a lower rate), but it was enough to make ends meet for her. She still put in 40 hours per week on her regular job, but her work days were not 9.5 hours instead of 8.5 hours.

[Anonymous]

As a person with a lot of loans in a not that high paying profession, I'm more sympathetic to your situation than some of the PPs, however, I think they are basically correct. These loans can't be discharged in bankruptcy, and the private loans aren't eligible for income based repayment. If you intend to stay together and pay the loans-and it sounds like you plan to do so, you both need to make more money.

Personally, I would sit down with him and make a one year plan, a five year plan, and a ten year plan. If he can't stick to the plan and make a dent in his debt, you need to think seriously about whether you want to marry him. Personally, I'm not a big Dave Ramsey fan, but maybe a plan like that would help you.

[Anonymous]

Anonymous wrote:OP here- thanks for your help PP's. However it's really not helpful to say "dump him". My question wasn't whether or not I should be with him. I just wanted advice about the student loans.

You said: What can I do? I know it's not technically my responsibility, but any advice?

I gave you some great advice. Someone who took on $100k of debt for a job that pays $30K, and then wants to go and take on more debt, is a disaster. The only choice you have to make is whether you want to let him drag you down with him.