Not Paying Government School Loans Back

[delilah]

Well, one time the loan number on my husband's student loan was changed and I made the payment to the other number. This was his first year working, and before I started medical school. Seven years later, after I had graduated from medical school and finished residency, we had trouble getting a mortgage for our new house because we were "late" with a payment. We were not late, and the bank had their money--they had just changed their account number and not credited the payment properly. The bank in question was Bank One, now Chase (and it took me years to forgive them).

 

[Tink&SquirtsMom]

I know someones whose direct loans were "forgiven" due to disability and they didn't have to pay another dime and nothing negative went on their report.

However if you apply for that and are declined they will come after you hard for all the back interest and fees you owe, so best to move quick before that stuff builds.

 

[Microbio]

The person I'm thinking about does not work but receives disability.

It does not matter what they are on. They will take it from the Disability check and all there tax refunds. and It does not matter how many deferments they have gone through.
trust me, they are nasty and I know!
good luck

and no it has not gone on my credit, I do have good credit.
also I should NOT be paying these loans back. I had been "let loose" from them. but the government just does not care.
and even thou they are being paid back, they are still in default, and they will not put them into an "active" state.

 

[JPN4265]

What would happen if someone doesn't pay back on their government student loans?

If you do not pay back your student (government funded loan) loan, or at least are making payments on the loan in the first five years of your graduation, the government can request that your diploma be revoke. This happened to a friend of mine. This is a little known fact, and one that is starting to be used more and more. The government will notify your employer that you no longer are considered a college grad, and this could cost you your job. They then take legal action to collect the debt.

 

[BuzznBelle'smom]

OT a bit, but I'm really glad to see that they're doing this. When I graduated (1985), my brother graduated the same year. He considered them a joke, has never paid a cent. Felt absolutely no responsibility to--he's that kind of person. you guys are making me wonder if this is part of the reason he moved out of the country, although he still generates some income here. BTW, he also feels no obligation to pay back any monies borrowed from our disabled mother or his brother, either--fortunately, I've never lent him a dime!

 

[lunchmomd]

If you declare bankruptcy and can prove a hardship, student loans can be discharged.

 

[Microbio]

If you declare bankruptcy and can prove a hardship, student loans can be discharged.

sorry, but one thing you cannot bring into a bankruptcy is a student loan. It is very hard to prove. I to have been thought this. my loan was only for 6000 bucks but with the interest, it just about tripled. I had deferments also for 11 years, every 6 months. at the very least I asked them to stop the interest, I had no desire NOT to pay them back.

but I tryed twice to do the hardship thing, after a bankruptcy. no go.

 

[In a hurry]

Recently their was a news-bite about a man who didn't pay his student loans, and the government was deducting them from his Social Security payments.

 

[mainewmn]

Except for bankruptcy which can stay on your credit report for longer then 7 years other bad credit can only stay on your report for up to 7 years from the date of last activity. SO lets say I have student loan that I defaulted on in January of 2000, then repaid them in full on January 2002, they must come off no later then February of 2009. Seven years from the last activity.

 

[Lisa loves Pooh]

It is a law that states that bad credit can only be placed on your credit report for up 7 years.

a student loan is not a line of credit and the penalties are quite different.

 

[Lisa loves Pooh]

http://www.ed.gov/offices/OSFAP/DCS/repaying.html


While it is true that they *may* be removed after 7 years since last activity...on defaulted loans, there is no statute of limitations on enforcabiilty

 

[mainewmn]

They can be much more stringent when it comes to collecting the loan then lets say your regular run of the mill creditor be and like others mentioned attach ones wages, tax returns, etc, etc. However they are not above reporting it in any other manner then what the law dictates its there to protect consumers.

Edited to add:

That’s exactly what I was saying that the BAD information can only stay on ones credit report for up to 7 years, however the government can go after the individual that defaulted for as long as they have to.

 

[Lisa loves Pooh]

Another link that details what can be done.

It looks like deferrement can happen for temporary total disability. Forbearance can also take place--but that is more costly.

http://clarkcountylegal.com/student_loans.htm

 

[mickeyfan2]

If I was that person, I would try and pay what I could and see if they would do anything, because not paying at all probably isn't an option.

Make good faith payments until a permanent arrangement can be reached.

 

[ImarriedGrumpy]

When I was living below the poverty level and on public assistance, I learned that I could work out a repayment plan that was based entirely on my income level. There is a plan for low income people that caps the monthly payments at a certain percentage of income. If someone were to remain low income for a certain length of time (I think I was told it was 20 consecutive years of qualifying for this particular program), then the remaining loans might be forgiven. It is an extremely difficult repayment program to qualify for, and I needed help from a knowledgeable credit counselor to apply for the program, but it was helpful for the few years when I was single and making less than $10,000 a year.The #1 lesson I've learned with my student loans is that there is no option of "not repaying" them, but there really are a lot of ways people can get help with repaying them if you are having difficulty. You might need help discovering all of the options, but they do exist and are better than defaulting.

 

[summerrluvv]

Social Security, Disability and Child Support cannot be garnished, period.

Certain types of student loans can be discharged in bankruptcy, typically only those owed to the school directly.

 

[CheshireVal]

You can lose your teaching certification here in Georgia, and I think any state licenses (for certain jobs), too.

 

[BuckNaked]

Social Security, Disability and Child Support cannot be garnished, period.

Incorrect, at least as to Social Security.

 

[vivilasvegas]

A friends of ours recently went to get a job, only to find out his social security number was flagged because of non-payment of his student loans. I'm assuming that meant they would start garnishing his wages right away....he didn't get the job.

 

[In a hurry]

Incorrect, at least as to Social Security.

So true! It held up in court recently. I thought it was a perfect judgement!