All About Student Loans

With the cost of higher education constantly increasing, its causing more and more students to go further and further into debt. Whats more frightening are the jobs available to those graduating with all this debt, aren’t really there as we had planned. Many are forced into lower than average salaries that just pays the bills each month.

True Story, I have a friend that works over at the Dept. of Education, student loans division. He received a call one Monday morning from a woman looking for options and details of her loan. What prompted her to call was the fact that her Government Stimulus check hadn’t arrived, neither had her tax return she was desperately expecting to receive. What arrived instead was a notice that her entire tax return, which was just a hair bit over 4 thousand dollars, was going to be taken and applied to her defaulted student loan!! Well, my friend finds her loans and not only sees that both her tax return and stimulus check was applied to the loan, he noticed the balance: $207,000.00. That’s right, Two hundred and Seven thousand dollars in student loans! GASP! Now the amount of the loan had nothing to do with her checks being taken, its just one of the many other bad things the Government can and will do if you default on the loan you owe them.

THERE IS HOPE: OPTIONS FOR DEFAULTED LOANS

If you have any defaulted student loans (private loans don’t count here), its a great great idea to have that be on your priority list when trying to clean up your credit. Why? Well because its a federal loan! Which means it can’t be listed for bankruptcy, it can’t fall under your states statute of limitations and they certainly will come and take their money if you can’t pay it.

what can be done? Well a number of things can be done to assure they get some of their money. They can and most likely will:

1. Garnish your wages

2. Tax offset; as mentioned above, when they take your tax return

3. litigation

4. judgments, etc. etc. etc.

So the list goes on. The scary thing is those payment methods aren’t really applied to the principle balance (amount you borrowed) its applied to the penalty fees and interest first and that usually means the principle goes untouched.

By this time you’ve most likely have gotten many calls and notices about it and its usually the last resort. If a third party agency contacts you about it, they are contracted by the Dept. of Education to collect the debt, which means they can and will make the recommendation for involuntary repayment of the loan.

So I’ll leave you with that to think about. Tomorrow I will go over the options of repayment that you do have if you are in default and want to prevent any of those bad things from occurring. Until then, check out our site for more information on related issues: Identity theft, Bankruptcy, Credit cards, Credit reports, etc. etc.

www.securecreditsolutions.com

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