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  1. #1
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    Question Is There Any Reason to Pay Token Money a Student Loan

    My question involves collection proceedings in the State of: Missouri

    90,000 of student loans are federal. 10,000 are through the state school (I don't know if that is federal or not).

    Jane made some marriage mistakes in college that included gaining a lot of student debt and losing a husband all before she got her degree. She has never been able to pay 500 per month to student loans, and was told by the loan agency that sending in less than that would do nothing to keep her out of default or keep her credit report clean. She got forbearances and then ran out of time and still couldn't pay the 500 per month she was required to pay. She was again told paying less than that would serve no purpose. Jane went into collections; she has now defaulted. Jane voluntarily called the collection agency before they ever call her and asked if she could rehab her loan. She said she lost her low paying job last year and has a ton of medical bills but can they work with her? She would like to rehab her loan. They say yes, and to do so she must pay 10,000 down and 900 per month. Jane couldn't afford 500 per month so she clearly can't afford 900 per month with 10,000 down. Jane asks for a hardship payment plan which they say is 700 per month. Again, she can't afford that. She asks if it would do any good to send in 50 per month and they say no.

    What can Jane anticipate happening? Will she be sued? Will the Collection Agency take her property from her family? She has no wage to withhold. She gets no tax refund and pays no taxes because she is a dependent to her husband. What punitive actions will the Collection Agency be likely to take? Is the collection agency making a good faith effort at rehabing the loan? Aren't they required to do so by Obama's new law? Jane really doesn't have enough money (and never has) to pay such a huge student loan. Had she known the future she shouldn't have taken it. She would pay 50 per month if it would do any good, but they have told her it won't.

    Is there even any reason for her to pay anything in this situation? Is there any reason for her to pay any debts at this point? It seems that her financial future has just been blacked out forever, so is there any reason to continue talking to the collection agency at all?

  2. #2
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    Default Re: Is There Any Reason to Pay Token Money a Student Loan

    Quote Quoting ellapescada
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    My question involves collection proceedings in the State of: Missouri

    90,000 of student loans are federal. 10,000 are through the state school (I don't know if that is federal or not).

    Jane made some marriage mistakes in college that included gaining a lot of student debt and losing a husband all before she got her degree. She has never been able to pay 500 per month to student loans, and was told by the loan agency that sending in less than that would do nothing to keep her out of default or keep her credit report clean. She got forbearances and then ran out of time and still couldn't pay the 500 per month she was required to pay. She was again told paying less than that would serve no purpose. Jane went into collections; she has now defaulted. Jane voluntarily called the collection agency before they ever call her and asked if she could rehab her loan. She said she lost her low paying job last year and has a ton of medical bills but can they work with her? She would like to rehab her loan. They say yes, and to do so she must pay 10,000 down and 900 per month. Jane couldn't afford 500 per month so she clearly can't afford 900 per month with 10,000 down. Jane asks for a hardship payment plan which they say is 700 per month. Again, she can't afford that. She asks if it would do any good to send in 50 per month and they say no.

    What can Jane anticipate happening? Will she be sued? Will the Collection Agency take her property from her family? She has no wage to withhold. She gets no tax refund and pays no taxes because she is a dependent to her husband. What punitive actions will the Collection Agency be likely to take? Is the collection agency making a good faith effort at rehabing the loan? Aren't they required to do so by Obama's new law? Jane really doesn't have enough money (and never has) to pay such a huge student loan. Had she known the future she shouldn't have taken it. She would pay 50 per month if it would do any good, but they have told her it won't.

    Is there even any reason for her to pay anything in this situation? Is there any reason for her to pay any debts at this point? It seems that her financial future has just been blacked out forever, so is there any reason to continue talking to the collection agency at all?


    ...and does Jane plan on never working again?

    Does Jane qualify for SSDI?

  3. #3
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    Mar 2011
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    Missouri
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    Default Re: Is There Any Reason to Pay Token Money a Student Loan

    If SSDI is Disability then no. She is not disabled. She has a family member (a parent) who is and for whom she cares. She would not quailfy for loan forgiveness because nothing is wrong with her to prevent her from working. She did have a physical problem and at that time for reasons "unrelated" lost her job, but now she is fine, but has no job.

    She would like to, but her professional lisence is being withheld until she pays her entire student debt. She does a little to make money right now, like babysit every once in a while, but she has a very sick family member and she has a child so the cost of replacing her at home would be more than the wage she could earn. Even if she were to return to her full earning potential by using her degree in the helping field, it would take her 5 years of her entire salary to pay off her loans. If her wages are garnished she doesn't mind, after all, she owes the money. She would pay a reasonable amount on the loan now, if the collection agency said it would do her any good. She's not trying to avoid the debt, but if the debt can't be satisfied, and it is wrecking her entire financial future, then she wonders why she should spend the last of her savings satisfying debts that can't be satisfied.

    It doesn't seem like there is any benifit to doing so in terms of the credit collectors, and she should have savings for her children's safety.

  4. #4
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    Default Re: Is There Any Reason to Pay Token Money a Student Loan

    Quote Quoting ellapescada
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    If SSDI is Disability then no. She is not disabled. She has a family member (a parent) who is and for whom she cares. She would not quailfy for loan forgiveness because nothing is wrong with her to prevent her from working. She did have a physical problem and at that time for reasons "unrelated" lost her job, but now she is fine, but has no job.

    She would like to, but her professional lisence is being withheld until she pays her entire student debt. She does a little to make money right now, like babysit every once in a while, but she has a very sick family member and she has a child so the cost of replacing her at home would be more than the wage she could earn. Even if she were to return to her full earning potential by using her degree in the helping field, it would take her 5 years of her entire salary to pay off her loans. If her wages are garnished she doesn't mind, after all, she owes the money. She would pay a reasonable amount on the loan now, if the collection agency said it would do her any good. She's not trying to avoid the debt, but if the debt can't be satisfied, and it is wrecking her entire financial future, then she wonders why she should spend the last of her savings satisfying debts that can't be satisfied.

    It doesn't seem like there is any benifit to doing so in terms of the credit collectors, and she should have savings for her children's safety.


    Jane needs a reality check.

    This can come back to haunt her many years down the line.

  5. #5
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    Mar 2011
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    Missouri
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    Smile Re: Is There Any Reason to Pay Token Money a Student Loan

    Agreed. One doesn't even have to look a month from now to see how this is hurting her already. Trust me, Jane is so upset about this she can't think clearly and can't stop crying. She knows how bad this situation is.

    However, she does not have the money and does not have a way of obtaining nearly $20,000 spendable dollars starting now in the next 10 months. Thus the questions about what she may anticipate the student loan collection agency will do, and whether there is any reason to pay attention to the rest of her debts as long as a huge student loan default is on her record. ETA And the question about whether she should be sending in checks for 50 dollars in the mean time, given the collection agency says they won't help her situation.

  6. #6
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    Default Re: Is There Any Reason to Pay Token Money a Student Loan

    Quote Quoting ellapescada
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    Agreed. One doesn't even have to look a month from now to see how this is hurting her already. Trust me, Jane is so upset about this she can't think clearly and can't stop crying. She knows how bad this situation is.

    However, she does not have the money and does not have a way of obtaining nearly $20,000 spendable dollars starting now in the next 10 months. Thus the questions about what she may anticipate the student loan collection agency will do, and whether there is any reason to pay attention to the rest of her debts as long as a huge student loan default is on her record.

    Bankruptcy may free up enough funds to enable her to pay her student loan debt.

    But really, Jane needs professional and personal help. From an attorney and an accountant.

  7. #7
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    Missouri
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    Default Re: Is There Any Reason to Pay Token Money a Student Loan

    I guess that because of the title of the forum I had hoped for legally oriented suggestions, tips, or thoughts; instead of judgment. I see that you did not have expertise in this area, but thank you for your responses anyway.

  8. #8
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    Default Re: Is There Any Reason to Pay Token Money a Student Loan

    Quote Quoting ellapescada
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    I guess that because of the title of the forum I had hoped for legally oriented suggestions, tips, or thoughts; instead of judgment. I see that you did not have expertise in this area, but thank you for your responses anyway.


    Good luck to "Jane".

    Who needs an attorney.

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