Student Loan Crisis

[StitchesGr8Fan]

Turns out DBF's grandma didn't pay his student loan that she consigned for and promised to pay, and now they are coming after him cause she is dead. Imagine getting a collections notice for $100K. He's freaking and I don't know where to start. Yes, we need to pay it, but can we set up a payment plan? Anyone have experience with this?

 

[LilyWDW]

Turns out DBF's grandma didn't pay his student loan that she consigned for and promised to pay, and now they are coming after him cause she is dead. Imagine getting a collections notice for $100K. He's freaking and I don't know where to start. Yes, we need to pay it, but can we set up a payment plan? Anyone have experience with this?

All you can do is call the company and see what they can do for you. You may have to deal with the collections agency at this point (since it sounds like it has gone to collections). They may or may not set up a payment plan. All you can do is find out.

 

[CatNipRules]

Who is sending you the notice?

Whatever you do, don't avoid them. They can garnish his wages or even garnish his state and federal tax refunds.

I would tell him to call them and work out a payment plan. They are more than willing to set up monthly payment arrangements. I've been paying mine off every month. Slowly but surely.

Just call them and explain the situation. They just want their money and are more than willing to work out payment plans......

 

[momto2inKC]

No one here knows honestly. You'll have to contact the company the loans are through and see what they will do to work with you.

 

[SevsOnlyGirl]

If it was apersonal loan, it's harder to say. If it's the Dept of Ed - they'll generally work with you after default.

 

[StitchesGr8Fan]

He is going to make sure the claim is legit and then call them and set up a payment plan. It's not as dramatic as we thought to begin with.

 

[reginaastralis]

The pp is correct, if it's the DOE, they are usually pretty easy to work with after default. Also, I believe the DOE will work with you in consolidating a default loan with another provider. Don't quote me on that, I worked in student loans about 4 years ago, so it's been awhile.

 

[Trishtack]

IF it is a Department of Education loan the borrower would have to be the student or a parent or guardian. Grandparents cannot cosign a federal loan unless they are the legal guardians. Most loan companies will cancel the debt once the primary borrower is deceased. Who was primary? Your son or his grandmother? You said she cosigned. If so then the debt would still be his with the student loan company. Most would work with you as they rather have the funds than not.

 

[Gumbo4x4]

You said she cosigned. If so then the debt would still be his with the student loan company.

^^^This. I know that's not helpful, but if it was HIS loan with grandma as co-signer, she was just there in case HE failed to pay on HIS loan.

 

[StitchesGr8Fan]

I guess the verbal agreement was that she would pay the loan as her gift to him. He knows he is responsible and is going to pay it back. Never do financial transactions with family!

 

[wvjules]

Go to www.creditboards.com They are extremely helpful over there.

 

[cm8]

I guess the verbal agreement was that she would pay the loan as her gift to him. He knows he is responsible and is going to pay it back. Never do financial transactions with family!

Is there a reason she could not have it in her name to begin with

Can he at least prove she was making payments or did she not pay anything?

 

[mrsklamc]

If she was the cosigner, they should have been contacting him well before it made it to collections

 

[Gumbo4x4]

If she was the cosigner, they should have been contacting him well before it made it to collections

Yeah, I'm wondering about that as well.

 

[LilyWDW]

If she was the cosigner, they should have been contacting him well before it made it to collections

I didn't even catch that... nice eyes!

If she was the cosigner, then they would have still been contacting the actual primary on the loan (the student) way before now.

 

[ccgirl]

I didn't even catch that... nice eyes!

If she was the cosigner, then they would have still been contacting the actual primary on the loan (the student) way before now.

That's what I was wondering as well.

OP - was he the primary borrower? If so, he is the one the is primarily responsible. I think borrowers really need to make themselves informed about loans. For example, there might have been an agreement that grandma paid but what if she lost all her money somehow or passed away earlier? How long has the loan been around?

 

[momto2inKC]

If she was the cosigner, they should have been contacting him well before it made it to collections

Ah, nice catch! Yep, he should've been getting calls/letters.

 

[seashoreCM]

What was the original payment schedule like? He could propose a payment schedule similar to that to the collection agency.

If you are or he is thinking of paying it off all at once, propose an amount somewhat smaller than what they are asking for and negotiate up from there.

 

[disneymarie]

If she was the cosigner, they should have been contacting him well before it made it to collections

Wow, I think the dbf is sugar coating things. I think he thought when he did not come up with funds Grandma would, then she passed away. I don't know what kind of student loan needed a cosigner, as a student over 18 I signed my own papers w/o credit or cosigner.

I would not entangle your life legally into his with this mess. It could mean the rest of his life of income tax returns being garnished, wages, even if they reduce it, they won't forgive it.

He would have been the first contact within months of graduation. If he had mail sent to grandma, was she even in financial means of making his parents and why would she if she did have funds?

There are more questions then just he is freaking out what can he do.

Think again about hooking your wagon to this horses behind. If he were my own son I would tell you the same thing.

I had a $1,200 student loan before I got married. Graduated the week after the first baby was born. the ex left soon after. I had $200 in welfare and he was $thousands in arrears on child support. I tried to send $40 a month, then months as winter I did not have it. After the ex finally paid up and welfare took the money I tried to get enough work, 2 pt jobs. The nasty contacts came, I was only paying near enough for interest. I filed income tax and only had earned income credit for the nominal hrs I worked...
the Earn income credit of $500 was taken by the DOE for the payments and balance of interest owed. For awhile that was all I could do, send toward interest, and they took the income tax returns. I knew I had to pay it off before I remarried, so I finally found a full time job, and fiancee stayed with the kids while I worked a second pt job doing security work. I paid it off before the wedding. my now dh wanted to pay it off, but I would not allow him.

Long story ends.... by the time the $1,200 loan was paid off, it was $3,800. Yes it took me from 1982, until 1990.

 

[cornflake]

Wow, I think the dbf is sugar coating things. I think he thought when he did not come up with funds Grandma would, then she passed away. I don't know what kind of student loan needed a cosigner, as a student over 18 I signed my own papers w/o credit or cosigner.

I would not entangle your life legally into his with this mess. It could mean the rest of his life of income tax returns being garnished, wages, even if they reduce it, they won't forgive it.

He would have been the first contact within months of graduation. If he had mail sent to grandma, was she even in financial means of making his parents and why would she if she did have funds?

There are more questions then just he is freaking out what can he do.

Think again about hooking your wagon to this horses behind. If he were my own son I would tell you the same thing.

I had a $1,200 student loan before I got married. Graduated the week after the first baby was born. the ex left soon after. I had $200 in welfare and he was $thousands in arrears on child support. I tried to send $40 a month, then months as winter I did not have it. Did not ask my parents to help until after the ex finally paid up and welfare took the money. About that time, the nasty contacts came, I was only paying near enough for interest. I field income tax and only had earned income credit for the nominal hrs I worked...the Earn income credit of $500 was taken by the DOE for the payments and balance of interest owed.

Long story ends.... by the time the $1,200 loan was paid off, it was $3,800. Yes it took me from 1982, until 1990.

Non-federal ones, private ones, large ones.

It could well have been a private loan. Though they should have been contacting him as the borrower, depends on how they set it up. It's possible the mailing address was him c/o grandma at grandma's place and she was sending the checks.

Dunno if it's a fanciful tale or not, just saying that's possible.