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  1. #1
    Join Date
    Feb 2009
    Posts
    5

    Default Minor Taking Out a Stafford Loan Without Being Eligible - Do They Have to Pay Back

    Dear Experts,

    I was 16 when I went to college. My parents took out a Stafford Loan in my name however, I was unaware of this debt until recently since I lived out of the country and moved frequently and my parents never forwarded me the information regarding the debt after graduation.

    15 years later the debt has defaulted and reached me and with the accumulated creditor fees and interest, it is completely crippling.

    At first I thought, how I am responsible for a debt I took out as a minor where I had no idea it was taken out in my name? I quickly found that since 1992, minors are responsible for Federal Student Loans - no matter what.

    However, looking at the student loan qualifications for the Stafford -- You must have at least a high school diploma or the recognized equivalent of a high school diploma.

    I didn't.

    I entered college at 16 without a high school diploma or its equivalent. It wasn't until a month before my 18th birthday that I received my A.A. Degree, which functions as a equivalent of a high school diploma.

    I run a non-profit and am completely crippled by this debt. The creditors, because my loan is defaulted, want to garnish my wages -- essentially putting me the poor house.

    Please help! Anyone.

    Many thanks in advance.

    -- In Need

  2. #2
    Join Date
    Apr 2007
    Location
    Il.(near StL,Mo.)
    Posts
    5,252

    Default Re: Minor Taking Out a Stafford Loan Without Being Eligible - Do They Have to Pay Bac

    You said the creditors want to garnish your wages - do they already have a judgment against you?

    What is the name of your state?

    Thanks.

  3. #3
    Join Date
    Feb 2009
    Posts
    5

    Default Re: Minor Taking Out a Stafford Loan Without Being Eligible - Do They Have to Pay Bac

    Thank you for your reply Betty3.

    Yes the creditors, Allied Interstate Incorporated, have threatened to garnish my wages.

    At first they demanded that I immediately put down 20% of around $60,000 that I owe. The original loan totaled a but more than $30K but with interest and creditor fees it has almost doubled.

    I don't have any savings nor disposable income, as I stated, I founded and run a small non-profit with a very fixed income. So when I said, I don't have $12,000 they told me to borrow it from someone.

    When I stated that was impossible they threatened that the Dept. of Education would garnish about a third of my wages AFTER tax. I couldn't survive with that little.

    So, yesterday they called back and divided that number by half which I still can't afford. And when I said, I am happy to start paying back but I can't afford that amount monthly - they threatened that the amount was the minimum the Dept. of Education would consider and that I better take it now and in 12 installments it would get my loans out of default.

    I don't know who to believe or where to turn. What are my rights in negotiating a monthly payment and truly, how much can they take out of my wages legally?

    Also, as I mentioned before, this Federal Stafford Loan was given to me as a minor when I was uneligible for it during the first two years of college... Is there any loophole to be considered with this? Would it be worth seeking counsel and fighting this?

    I have put myself through college and worked so hard to help others since I graduated. I have never lived grandly, I just want to be able to do the work I do without being buried in debt.

    If I could possibly refute my debt towards the first two years of my Stafford loan - if the original two year loan combined with interest and creditor fees were dismissed, I could possibly handle paying back the rest.

    I appreciate your advice. Thanks for taking an interest in my quandry.

    Best,
    1 2 Many Books

  4. #4
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: Minor Taking Out a Stafford Loan Without Being Eligible - Do They Have to Pay Bac

    Did you sign the promissory note or not?

    If you did not sign the promissory note, have you ever raised that issue to the lender? Did your parents sign their own name(s) to the note, or yours?

    The money was applied to your college education?

  5. #5
    Join Date
    Jul 2006
    Posts
    5,437

    Default Re: Minor Taking Out a Stafford Loan Without Being Eligible - Do They Have to Pay Bac

    Quote Quoting Mr. Knowitall
    View Post
    Did you sign the promissory note or not?

    If you did not sign the promissory note, have you ever raised that issue to the lender? Did your parents sign their own name(s) to the note, or yours?

    The money was applied to your college education?
    We need these answers.

  6. #6
    Join Date
    Feb 2009
    Posts
    5

    Default Re: Minor Taking Out a Stafford Loan Without Being Eligible - Do They Have to Pay Bac

    This was 15 years ago. I remember signing small Perkins Loans when I got to school but no, I do not remember signing any Stafford loans with my parents at the time.

    I do not remember signing the promissory note for such a large loan, which it is my nature to remember. At the time my parents informed, and majorly guilt tripped me, that they were paying for the additional college tuition not covered by my almost full scholarship.

    We are estranged, have been since I was 16, and I don't have the answer to whether my parents signed their own names at the time. I called them about this and they said they don't remember.

    The money was applied to my college education.

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