Anonymous
Post 05/08/2013 15:19     Subject: Defaulting on student loan?
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:I disagree that default should never be an option.

You could avoid marrying, or see if you can marry but ensure everything is in your name. Up to 15% of his wages may be garnished, but he will have no assets to attach. Then after the statute of limitations in your state expires he may be free.

Of course he can't borrow to go back to school, but nor should he. That would be crazy when he has $100K in unpaid debt.

I already said it, but I will repeat - there is no statute of limitations on federally-backed student loan debt. Plus, state law has nothing to do with it. It is all under the Higher Education Act, which is a federal statute.
If you stop paying, the interest will continue to accrue indefinitely. If you have a job, your wages will be garnished - and that does not require a lawsuit, just a due process notice sent to the borrower. Social Security benefit payments may also be garnished, and tax refunds and other federal payments offset indefinitely. It's really a crappy situation to be in.


90 percent of his loans are private. There is a statute of limitations on private student loan debt. This is governed by state law.

I think that is most likely a misconception on his part. 10K is not even one year's limit on federal undergrad loans. No way he took private loans before exhausting the federal limit.
Anonymous
Post 05/08/2013 15:17     Subject: Defaulting on student loan?
Anonymous wrote:
Anonymous wrote:I disagree that default should never be an option.

You could avoid marrying, or see if you can marry but ensure everything is in your name. Up to 15% of his wages may be garnished, but he will have no assets to attach. Then after the statute of limitations in your state expires he may be free.

Of course he can't borrow to go back to school, but nor should he. That would be crazy when he has $100K in unpaid debt.

I already said it, but I will repeat - there is no statute of limitations on federally-backed student loan debt. Plus, state law has nothing to do with it. It is all under the Higher Education Act, which is a federal statute.
If you stop paying, the interest will continue to accrue indefinitely. If you have a job, your wages will be garnished - and that does not require a lawsuit, just a due process notice sent to the borrower. Social Security benefit payments may also be garnished, and tax refunds and other federal payments offset indefinitely. It's really a crappy situation to be in.


90 percent of his loans are private. There is a statute of limitations on private student loan debt. This is governed by state law.
Anonymous
Post 05/08/2013 15:16     Subject: Defaulting on student loan?
Anonymous wrote:It sounds unlikely that he would have take 90k in private loans and only 10k in federal student loans. He can look up they types of federal loans he has, the current balance, and who services them on www.nslds.ed.gov. He should then look into the IBR repayment plan for his federal loans and work with whomever is servicing his private loans for a payment plan with reduced monthly payments. When you get married, if you decide to file taxes jointly, that will have an effect on his monthly payment amount under IBR.

Yeap. No financial aid office would recommend private loans before he exhaust his federal limit, which he hasn't done. Sallie Mae could just be a servicer of his federal loans.
Anonymous
Post 05/08/2013 15:12     Subject: Defaulting on student loan?
Anonymous wrote:I disagree that default should never be an option.

You could avoid marrying, or see if you can marry but ensure everything is in your name. Up to 15% of his wages may be garnished, but he will have no assets to attach. Then after the statute of limitations in your state expires he may be free.

Of course he can't borrow to go back to school, but nor should he. That would be crazy when he has $100K in unpaid debt.

I already said it, but I will repeat - there is no statute of limitations on federally-backed student loan debt. Plus, state law has nothing to do with it. It is all under the Higher Education Act, which is a federal statute.
If you stop paying, the interest will continue to accrue indefinitely. If you have a job, your wages will be garnished - and that does not require a lawsuit, just a due process notice sent to the borrower. Social Security benefit payments may also be garnished, and tax refunds and other federal payments offset indefinitely. It's really a crappy situation to be in.
Anonymous
Post 05/08/2013 15:07     Subject: Defaulting on student loan?
Oops I meant "not using his current degree"
Anonymous
Post 05/08/2013 15:06     Subject: Defaulting on student loan?
Well, what is his plan for paying back the money? Does he have one? How is he going to pay for further education? If he's using his current degree, how do you know he will use a future one? How is he going to cover bills after you are married? How are you both going to pay for childcare? Does it bother him that his bad credit and money problems are causing you angst?
No one on this board can convince you to drop him, but YOU should take it upon yourself to ask him these hard questions.
You probably won't like the answers.
Anonymous
Post 05/08/2013 15:04     Subject: Defaulting on student loan?
I disagree that default should never be an option.

You could avoid marrying, or see if you can marry but ensure everything is in your name. Up to 15% of his wages may be garnished, but he will have no assets to attach. Then after the statute of limitations in your state expires he may be free.

Of course he can't borrow to go back to school, but nor should he. That would be crazy when he has $100K in unpaid debt.
Anonymous
Post 05/08/2013 14:55     Subject: Defaulting on student loan?
It sounds unlikely that he would have take 90k in private loans and only 10k in federal student loans. He can look up they types of federal loans he has, the current balance, and who services them on www.nslds.ed.gov. He should then look into the IBR repayment plan for his federal loans and work with whomever is servicing his private loans for a payment plan with reduced monthly payments. When you get married, if you decide to file taxes jointly, that will have an effect on his monthly payment amount under IBR.
Anonymous
Post 05/08/2013 13:32     Subject: Re:Defaulting on student loan?
OP, why is this a problem it's clear that he needs to earn more money with one job or get a second.

Default should never be an option. It really sounds like your fiancee is an underachiever if he hasn't already thought about getting a second job. Maybe he doesn't mind that you're covering more than your share of the bills.

Think twice before marrying him, you'll likely resent him and his predicament within the first year.
Anonymous
Post 05/08/2013 13:26     Subject: Defaulting on student loan?
he needs to get a new job or take on a second job. period. he does not make enough to cover his debt. you can take on a second job too if needed, but no question he at the very least needs to own up and work his butt off to pay down that debt.
Anonymous
Post 05/08/2013 13:21     Subject: Defaulting on student loan?
Anonymous wrote:
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?


Yes, of course you can be sued - a loan is a contract, and if you breach it they can sue you. As a pp notes there is no statute of limitations for the government to sue you. But private loans most likely have the statute of limitations of your state, probably around 6 years in many cases. And you cannot discharge either private or federal loans in bankruptcy.

If OP's fiancé has 90k in private student loans and earns 30k, he is well and truly screwed. At least with federal loans he would get some kind of income based repayment plan and/or extended repayment terms.
Anonymous
Post 05/08/2013 13:19     Subject: Defaulting on student loan?
Anonymous wrote:Alright, I am a perpetual worrier. My fiance has $100k in student loans. I make $40k, he makes $30k. We're in MA. He is in the medical field, not using his degree.
I think 10% of those loans are federal and the rest is Sallie Mae. He can't keep up with the payments. He has used all his forebearances. He will be late on a payment, get a zillion calls from them, somehow scrounge up the money, then the cycle continues. It's $600+/month that he just can't afford. I pay a higher portion of our rent/bills (because I make a little more and have less expenses than him), but not a huge difference.
He wants to go back to school (to be an NP or PA), in a year, which of course will require more loans.
It's hard to discuss with him because I don't really have any good advice for him, nor do I have the practical answer ($$$). Honestly, if I had the money, I would of course help him out until he got back on his feet (as I know he would with me).

Neither of us want him to default - especially if he'll need more loans in the future. I have excellent credit, no student loans- just a car loan w/ 2 years left.

What can I do? I know it's not technically my responsibility, but any advice? Any sites you can lead me to? I'd like to point him in a direction he hasn't explored yet.

Also, if he DID default- what does that even mean? What are the consequences?



That's pretty unethical. Too bad that they don't take away diplomas when people default on the student loans! You guys are making bad karma and something bad will happen to you in return
Anonymous
Post 05/08/2013 13:17     Subject: Defaulting on student loan?
Anonymous wrote:Can he consolidate his loans to make a smaller payment? It'll cost more in the long run, though.


If these are private loans, not federal loans, then there are generally no viable consolidation options.
Anonymous
Post 05/08/2013 13:13     Subject: Defaulting on student loan?
Anonymous wrote:
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.


+1,000,000,000
Who has this much debt and then wants to accrue more debt??
Get another job (or 10)
Anonymous
Post 05/08/2013 13:10     Subject: Re:Defaulting on student loan?
Financial stress is a leading cause of divorce. You need to think about whether you want to marry this guy. And if it will take him eight years to get out of his financial difficulties, would that be too late to start a family?