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  1. #1
    Join Date
    Aug 2010

    Default Best Way to Deal with 25 Year-Old Student Loan Nightmare

    Okay, I have been a Student Loan deadbeat. I am not going to go into all of my reasons or excuses here. Life shows up and you do the best you can with what you have to work with at the time. That is all water under the bridge.
    Here is where I am at now...
    I have been able to clear up some old debts, but I still have this Student Loan nightmare hanging over my head, and I am not sure what options I might have. I took out three Fed Gar. Student Loans back in 1884 and 1985, for $2500 each, or total of $7500. No payments have been made except for a $1000 Tax return that was garnished last year and applied to the debt.
    According to the letters I keep getting from whoever is collecting the debt, the total amount still owed is about $28,000.00. So there has been over $20,000 dollars of interest and fees applied to this $7500 debt.
    At the moment I am on unemployment. My average earnings for the past 5 years have been about 20K a year. $21,000 interest on these loans just seems crazy considering the state our economy is in and all of the bailouts given to large corporations. I would like to find a way to start dealing with this student loan nightmare, and get it taken care of.

  2. #2

    Default Re: Best Way to Deal with 25 Year-Old Student Loan Nightmare

    Who currently owns your loans? Are they still owned by the Department of Education?

    Defaulted federal loans can often be rehabilitated and then placed into an income based repayment plan, but a loan that is 25 years old may not qualify. Here is some info on rehabilitation:

    The amount of interest that you owe may be crazy but there's no law against it. Your best bet is probably to negotiate with them and convince them that you can pay the original principal down over time along with some of the interest, and see if they'll knock the rest off. It would help if you had a lump sum to give them.

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