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Advice About Student Loan in Collections - The Bills.com Blog
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Advice About Student Loan in Collections
Question: I have a defaulted federal student loan from 1999 for $796.00. With interest and penalties they are asking over $1200.00 for repayment. I have offered to settle for $850.00 but was refused. They are threatening to garnish my wages if I do not pay the full amount. This is no longer on my credit but it is on my conscience. Do they have legal right to do so?
Answer: Youshould be aware that this student loan falling off your credit report will not make the debt go away; the Department of Education can continue its collection efforts on any federally insured loan until the loan is paid off. You may want to consider rehabilitating your loan, which should allow you to resume payments on the loan and have the default removed from your credit report. The Department of Education may also offer other options to help you repay your loan at a rate you can afford; I encourage you to contact the Department
of Education's collections office to discuss the repayment options available to you. For additional information on how to deal with a defaulted student loan, I encourage you to visit the DoE's website at www.ed.gov.
If you fail to resolve your student loan obligations, the DoE may begin garnishing your wages, levying your bank accounts, or attaching other property. If you cannot afford to make payments, or do not wish to do so, you may want to consult with an attorney in your
area to discuss the risks associated with this unpaid student loan to help you determine if rehabilitating the loan is something that you should consider.
To learn more about student loans, I invite you to visit the Bills.com Student Loan Information page.
I wish you the best of luck in resolving this obligation, and hope that the information I have provided helps you Find. Learn. Save.
Best,
Bill
www.bills.com/blog
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