My $20,000 student loan with Sallie Mae is in finalization with GC Services, and we can not afford the payment arrangements offered. What happens now? We live in North Carolina and according to your site they can not garnish our wages, and we do not own any property. I incurred this debt before we married.
GC Services, based in Houston, Texas, collects debts for a variety of businesses. It is one of several collection agents for delinquent federal student loans serviced by Sallie Mae. GC Services may also collect Sallie Mae’s delinquent private student loans as well.
Sallie Mae used to be the largest originator of federal student loans. Today, Sallie Mae only originates private student loans, but continues to service federal student loans.
Your first step is to determine whether your loan or loans are private or federal. We look at your options for both types of student loans if you and GC Services cannot agree to terms.
|Companies mentioned here|
| GC Services |
Houston, TX 77081
| Sallie Mae |
PO Box 9500
Wilkes-Barre, PA 18773-9500
| FSA Ombudsman Group |
U.S. Department of Education
830 First Street, N.E.
Washington, DC 20202-5144
If you cannot afford your federal student loan payments, contact your loan servicer because you may qualify for a deferment, forbearance, consolidation, or various payment plans before you become delinquent severely. Here, if your loan is federal, contact Sallie Mae immediately to learn about deferment, forbearance, consolidation, or a payment plan.
The Dept. of Education classifies a federal student loan in default if the borrower makes no payments for 270 days. One result of a defaulted student loan is loss of eligibility for future student loans or any type of state or federal student aid. The default is reported to Equifax, Experian, and TransUnion. Delinquent federal loans usually eliminate the option of private loans, which are based on credit score. Another consequence of a default is an administrative wage garnishment. If you cannot come to terms with your federal loan servicer, contact the Dept. of Education’s FSA Ombudsman Group.
There is no statute of limitations that prevents the Dept. of Education from collecting a federal student loan debt.
Here, you mentioned North Carolina, which does not allow wage garnishment for private creditors. Because the Dept. of Education is not subject to state wage garnishment laws, your wages can be garnished by the Dept. of Education.
Private student loans are delinquent after 120 days, generally.
The law sees private student loans it does other unsecured debt, such as credit card or medical debts, in all ways but one. If you default on an unsecured debt, such as a private student loan, the creditor has a cause of action against you for breach of contract. In other words, the lender has the right to file a lawsuit against a borrower who fails to make their private student loan payments as agreed.
If the borrower does not reach an out-of-court settlement with the plaintiff, and the lender prevails in court and wins a judgment, the lender can garnish the borrower’s wages (if allowed by state law), levy the borrower’s financial accounts, or attached a lien to the borrower’s property.
If your loan is federal, you have many payment options. Your doing nothing will result in a wage garnishment of 15%, which is probably a much greater amount than you qualify for in one of the Dept. of Education’s many payment plans. Contact Sallie Mae or GC Services to rehabilitate your federal student loans.
If your loan is private, you have fewer payment options. However, GC Services has a great deal of discretion in developing a payment plan or lump-sum settlement to resolve the loan. Read the Bills.com article Debt Negotiation Advice to learn how to negotiate a debt.
One option is a lump-sum settlement of the entire amount for less than the entire balance. Lay out your finances to GC Services or Sallie Mae and explain exactly what you can afford to pay. It appears you started to work through this process already. Ask about a lump-sum settlement possibility. You may be able to settle the entire debt for 30 to 50 cents on the dollar, provided you can borrow that amount from a close friend or family member.
One last thought. Review your options to discharge or cancel the debt. A chapter 13 bankruptcy, for example, can result in affordable monthly payments on your student loan and other debts.
I hope this information helps you Find. Learn & Save.