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Advice About Settlement on Student Loans - The Bills.com Blog
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Advice About Settlement on Student Loans
Monday, Jun 9, 2008
Question: My daughter has a student loan from many years ago. Does the government ever settle for a lesser amount? If so, under what circumstances would that be?
Answer: The government rarely settles federal student loans for less than the amount owed. They do this because the loans were issued at an already low interest rate and student loans are not dischargeable in bankruptcy. The government may also garnish wages and taxes without going through the court system. It may be possible to payback less than what was owed if a disability or extreme financial hardship occurred. If you feel your daughter falls into this category, contact the department of education for the appropriate forms.The Department of Education can compromise FFEL or
Perkins Loans of any amount, and suspend or terminate collection of these loans. It can be difficult, however to negotiate a “good” deal. The Department of Education has not given out much guidance on what they are likely to accept. The Department has Standardized Compromise and Write-Off Procedures for use by guaranty agencies.
These are for negotiated agreements between borrowers and guaranty agencies to accept less than full payment as full liquidation of the entire debt.
For more information on student loans please visit the student loans section at Bills.com.
I hope the information provided helps you Find. Learn. Save.
Best,
Bill
www.bills.com/blog/
For more information on student loans please visit the student loans section at Bills.com.
I hope the information provided helps you Find. Learn. Save.
Best,
Bill
www.bills.com/blog/
Also, make sure to get a free financial health check-up with Bills IQ!
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1. Posted by Walker on Thursday 5th November 2009 09:00
I got a private student loan 7 years ago. My parents had a friend co-sign, but recently the co-signer stated he didn't agree to co-sign filled an affedeviet and the loan went into default. Now a collection agency is calling and I don't know what to do. The loan was being paid as agreed. My credit is good, yet, I don't have any collateral to take a loan to pay it all off. I don't know what to do?
2. Posted by Bill on Thursday 5th November 2009 10:04
Let me get this straight: You were current on your payments for your student loan. The co-signer filed an affidavit (a formal sworn statement of fact) that he did not agree to co-sign the loan that he co-signed seven years before and is now just getting around to realizing his folly. In response your creditor called the loan, and requires you to repay the remaining balance immediately or you will be considered in default. Is my interpretation of your message accurate? If so, I would love to see the affidavit the co-signer sent the lender. Please reply with more information.