Did you watch the finale of Survivor a few weeks ago? One of the finalist was a Doctor who told the jury he had over $300 thousand dollars in student loan debt! Yikes…how stupid must you be to rack up massive student loan debt like that! Do you know how long it will take a beginning doctor to pay back a student loan like that? A very long, long time!
Sadly, many college students get their self into such debt. I’m not sure why either. With a little planning, some good student loan advice and just a tad bit of work ethic, you can minimize your student loan debt while in college.
But it does no good to keep your student loan debt low if your other debts go through the roof. One of the best things you could do as a student is to cut up your credit card. Oh..yeah…this will hurt. But it’s the best move, and the smartest one, you could make. No, don’t keep it around for emergencies. You’ll have several emergencies per day if you do.
Also, if you can’t afford it, stop going out all the time. I once spoke with a young lady who constantly complained about having no money and how she could not pay her bills while in College. She then went on to brag how she partied nearly every night and how her and her girlfriends loved to take weekend trips into a major city to shop for clothes!
The problem was, her ‘friends’ were born with Silver Spoons in their mouths and she was not!
Another thing I don’t get are those of you who are going to college and racking up massive debt so you can get out and make $30,000 per year. If you’re going to rack up huge piles of student loan debt, at least make sure you can get a job above the poverty line when you get out!
Student loans for Nurses is a prime example. There are many ways to get a Nursing degree without racking hundreds of thousands of dollars in debt. Heck, if you’re going to pile up that much debt, why not go ahead and become a doctor?
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Student Loans
As unemployment rises, more and more people are having trouble making ends meet. The government has many programs to help you prevent student loan default. If you are going through a difficult time, one of the best things you can do is communicated with your lender and try to create a solution before your loan goes into default.
Your lender will attempt to collect the loan up until it is over 270 days past due. At this point, your loan is turned over to the US Department of Education or one of the guaranty agencies.
Where your loan will go depends on the type of loan you have. If you have a Federal Family Education Loan (FFEL), your loan will first be assigned to a state guaranty agency. It may later be sent to the Department of Education. Both Direct Loans and Federal Perkins Loans will be assigned directly to the Department of Education to be collected.
There are numerous consequences of defaulted student loans. If you have a defaulted student loan, your loan will be accelerated. What this means is that the full balance of the loan, plus interest and fees is now due. You will no longer be eligible for any type of forbearance plan or deferment. You may make partial payment to either the guaranty agencies or the Department of Education, however.
Many people do not understand the seriousness of federal student loan default. Unlike most debts, student loan debts are not dischargeable in a bankruptcy. And, there is no statute of limitations on them. This means they can be collected 30 years from now.
In addition to this, the IRS may withhold any tax refunds you have coming due until your loan is paid in full. If you have a solid income, it is likely that you will be sued and the government will get a wage garnishment against you. This means that they will get a portion of your paycheck each month before you do. The guidelines vary, but typically they can garnish up to 15% of your disposable income.
If you are a Federal employee, you will be un-voluntarily entered into the Federal Employee Salary Offset Program. This means that 15% of your monthly income will go directly to the government! Sounds fun, right?
Obviously if you are facing student loan default, you want to get the situation rectified right away. Two possible solutions are student loan rehabilitation and student loan default consolidation.
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Tagged as:
default student loan,
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