Getting old student loans out of default: Anyone have experience?

[Jenny in Florida]

I have three relatively small student loans dating from my bachelor's degree almost 30 years ago that have been in default for a good, long time. I was stupid when I took them, broke when I got out of school and just dumb about managing my money for the first several years. Once I got married and had kids and stopped working, I had no income of my own with which to pay back the loans, and I was adamant that my husband (who didn't go to college at all largely because he couldn't afford to do so) was not going to pay them on my behalf. I won't deny that I got little support and advice about how to cope and that there were other potentially mitigating factors, but I totally recognize this situation is my responsibility. So, I don't need anyone to beat up on me about that.

 

For a variety of reasons, beginning with the fact that I hate having this hanging over my head and ending with the fact that I am effectively stuck in my current career situation because my university won't release my transcripts until I deal with the loans, I would like to open communication with the agency now holding the loans and see if I can make any kind of arrangement to resume repayment.

 

Truthfully, though, I'm terrified to make the phone call.

 

As things stand, they more or less leave me alone. I long ago stopped getting phone calls or letters from bill collectors. Once a year, when we file our taxes, we file the injured spouse form so that the IRS doesn't grab my husband's refund to pay my debt. But mostly daily life goes on.

 

When I last tried to deal with this, I ended up giving up because they agency I was communicating with at the time was so unreasonable. I no longer recall all the details, but I think they basically refused to negotiate at all on payment plans, insisting that the only possible option was to make payments that were simply not possible. However, once I had started the conversation, it took a couple of years before the phone calls and letters died down again. 

 

I really do want to clear these balances, but I have to be realistic about what I can do. Most of what I currently make working part time goes to pay my son's college expenses, and we have parent loans for our daughter's degree that we'll be paying off for at least the next decade or two. And, given my bad experience last time I tried to make this right, I'm really scared to remind them that I exist and risk starting another round of harassment. 

 

So, I'd love to hear from anyone who has gone through this process: Have you tried rehabilitating an old student loan? How did it go? Was the agency holding the loan willing to negotiate payments small enough that you could actually keep up with them? Are you glad you did it? Do you have any advice about how I should proceed?

 

Thanks. And please be nice. I'm trying to do the right thing, here.

 

[sarasue7272]

I guess these are not federal loans? Why does the university care? Do you owe them? Maybe you should see if there is a statute of limitations. With regular credit card debt there is a point at which they can't come after you.

[Jyhwkmama]

At the very least, could you own up a bank account now and make payments to yourself and then pay the balance in full once you have saved enough?

[LucyStoner]

Is the amount something you can pay at once or do you need to make payment arrangements?

 

Rehabbing defaulted student loans is something I've helped a few people with.

 

You can check the status of your old loans at:

 

https://www.nslds.ed.gov/nslds/nslds_SA/

 

You can do that without speaking to a soul.

 

It will probably indicate that you need to contact Debt Collection Services (DCS). You can do that by calling:

 

1-800-621-3115

 

The people answering those calls don't work for the lender or a private agency. They work for the Department of Education.

 

It generally takes 6 months of on time payments for the loan to come out of default. The most common payment amount I have seen is $50 on balance under about $5000 and $100 on larger balances for borrowers with modest incomes.

 

I hope this helps.

[Jenny in Florida]

I guess these are not federal loans? Why does the university care? Do you owe them? Maybe you should see if there is a statute of limitations. With regular credit card debt there is a point at which they can't come after you.

 

They are Stafford loans, federally guaranteed, which means there is no statute of limitations and they can't be discharged in bankruptcy. They follow you forever. I'm reading stories of senior citizens who are seeing portions of their Social Security checks taken to repay decades-old student loans. 

 

No, I don't owe the school, but it's a state university, and they have the right to withhold transcripts to students who are in default on their loans. 

 

I think it's ridiculous, especially since the policy wasn't even put in place until well after I had graduated, meaning I never signed anything saying I agreed to that provision. But it is apparently legal.

[LucyStoner]

I guess these are not federal loans? Why does the university care? Do you owe them? Maybe you should see if there is a statute of limitations. With regular credit card debt there is a point at which they can't come after you.

Student loan debt does not go away unless she dies or is eligible to have it discharged due to disability. There are income based repayment programs, programs to reduce the fees and loan forgiveness programs for public service but not even bankruptcy can make student loan debt vanish.

[Jenny in Florida]

At the very least, could you own up a bank account now and make payments to yourself and then pay the balance in full once you have saved enough?

 

It would take a good decade for me to set aside enough to pay the balances, In addition to my desire to take care of this for ethical reasons, I am finding not having access to my transcripts to be extremely limiting as I try to rebuild something like a career now that my kids are grown. If I have to save up enough to pay the balance before I can get going, I won't make any progress until I'm almost retirement age.

[LucyStoner]

Also, the college isn't required to deny you access to your official transcript due to defaulted loans. And they may not deny you access to unofficial copies of your transcript. FERPA mandates that.

 

Talking to a records office dean can sometimes get you access to official transcripts (for graduate school) if you get a sympathetic ear.

 

6 months of on time payment would generally mean the loan would come out of default and you could get your official transcripts sent places if need be.

[Jenny in Florida]

Also, the college isn't required to deny you access to your official transcript. And they many not deny you access to unofficial copies of your transcript. FERPA mandates that.

 

Talking to a records office dean can sometimes get you access to official transcripts (for graduate school) if you get a sympathetic ear.

 

They are not required to do so, but the university I attended has that policy.

 

This particular school also "does not provide unofficial transcripts." If I had attended within the past 15 years or so, I might have access to my records online. However, since I graduated in the mid-80s, those records are not available.

[Tsuga]

First, you are not alone. The federal loan system has been managed in a way that has not benefited all students and many people were encouraged to take out loans for low ROI careers, as well as loans they could not pay back due to family obligations.

 

The fact that they loaned so much to so many very young people was simply unconscionable and a disgusting substitute for a real system of higher education funding, IMO.

 

So yes, of course you made a mistake, but don't beat yourself up about it. Like you said, you're doing the right thing now.

 

 

As things stand, they more or less leave me alone. I long ago stopped getting phone calls or letters from bill collectors. Once a year, when we file our taxes, we file the injured spouse form so that the IRS doesn't grab my husband's refund to pay my debt. But mostly daily life goes on.

 

I'm concerned that if you lose that status, they will grab his refund. Have you considered that? Do you get the EIC? If so, do you need it or could you pay your DH back over the year so he has that money in the end? I really respect your desire to pay this off yourself but you two might need to work this out as a family payment even if you're working it off within the family budget. I really think you need to prepare for that possibility before opening this up again. That might be how you pay this off. 

 

When I last tried to deal with this, I ended up giving up because they agency I was communicating with at the time was so unreasonable. I no longer recall all the details, but I think they basically refused to negotiate at all on payment plans, insisting that the only possible option was to make payments that were simply not possible. However, once I had started the conversation, it took a couple of years before the phone calls and letters died down again. 

 

To whom were you speaking? The loan company? Not federal loans? The college financial aid office? Generally, the federal government will allow income-based repayment. However, it may be that that's the amount that is too high for you, presumably because you are spending more on housing than you are "supposed to" (the assumption being that it's possible to commute a certain distance or live in sufficiently poor conditions to get a lower housing cost), then you guys really need to think. Generally income-based repayment will take a percentage of your income, like 5-10% of the total or 10-15% of discretionary spending money but frankly most people with small kids don't have much that is "discretionary" unless having water and a house counts as "discretionary".

 

I really do want to clear these balances, but I have to be realistic about what I can do. Most of what I currently make working part time goes to pay my son's college expenses, and we have parent loans for our daughter's degree that we'll be paying off for at least the next decade or two. And, given my bad experience last time I tried to make this right, I'm really scared to remind them that I exist and risk starting another round of harassment. 

 

So, your husband co-signed those loans without you, presumably? Parent loans require good credit, so do you presently have good credit? Have they forgiven the loans, effectively? Have you gotten a car loan or home loan or any other type of loan since then?

 

I'm trying to understand where you are standing with the loan companies, what kind of loans they are, etc. It's hard to know where to go without knowing that.

[LucyStoner]

They are not required to do so, but the university I attended has that policy.

 

This particular school also "does not provide unofficial transcripts." If I had attended within the past 15 years or so, I might have access to my records online. However, since I graduated in the mid-80s, those records are not available.

FERPA requires that you have the right to inspect your school record, default or not. They are breaking the law. You need to talk to someone up the food chain.

 

http://www.finaid.org/educators/withholdingtranscripts.phtml

 

I've unravelled student loans and transcripts for people who had many added complications (like a criminal record, a drug conviction or a balance owed to the the school itself) beyond your situation. I can not stress enough the importance of talking to a decision maker at the school and not taking the website or office workers as the final word.

[Tsuga]

 

FERPA

The Family Education Rights and Privacy Act (FERPA) [20 USC 1232g and 34 CFR 99] gives students the right to inspect and review their own education records. In particular, 34 CFR 99.10 (d)(1) requires the college to provide the student with a copy of the education records if circumstances prevent the student from inspecting and reviewing the records in person. Since the definition of education records includes an academic transcript, FERPA effectively requires colleges to provide a student with a copy of his or her academic transcripts if the student does not live in the local area or is otherwise incapable of inspecting the records in person. (34 CFR 99.10(d)(2) permits the college to "make other arrangements for the parent or eligible student to inspect and review the requested records", so a college could potentially fulfill the requirement by means other than providing a copy.)

 

However, this copy does not need to be an official copy of the academic transcript with the registrar's seal. The college is permitted to provide the student with an unofficial copy of the academic transcript. The college is also not required to provide more than one copy of the unofficial transcript, as the language in 34 CFR 99.10(d)(1) is written in the singular "provide the parent or eligible student with a copy of the records requested". Also, since the requirement is to provide the student with a copy of the education records, the college is not required to send a copy of the education records to a third party such as a prospective employer or another school. Nothing prevents the college from indicating on the academic transcript that it is an unofficial copy. If the student has defaulted on his or her financial obligations, the college may also specify this on the academic transcript. 

Such measures are compliant with FERPA but render the transcript useless for other purposes, including any that require an official copy of the student's transcripts sent directly from the college. 

 

Per 34 CFR 99.11(a), the college may charge a fee for the copy of the academic transcript provided that it does not effectively prevent the student from exercising his or her right to inspect the records.

 

But anyway... they don't need a transcript to get a job. If she graduated, she graduated, and that should show up in the main clearinghouse for student data whereby most employers check graduation records.

 

I was assuming she needed official transcripts to continue her education, not to get a job. And for education, anyway, outstanding student loans are not going to be helpful.

[Jenny in Florida]

I'm concerned that if you lose that status, they will grab his refund. Have you considered that? Do you get the EIC? 

 

No, we don't get EIC. My husband actually makes decent money. It's just that he was the only breadwinner for almost 20 years while I was doing the SAHM thing. Because of some legal garbage we had to deal with some years ago, we also have no savings to speak of. Between those facts and the parent loans for my daughter's college, we have a lot less disposable income than most others who make the same amount of money.

 

I don't see how we could "lose injured spouse" status, since it is factually true that the debt is mine from before we were married and the bulk of our income is his. This past year, we did have to allocate the percentages and let the IRS take the tiny bit of our refund that could be attributed to me. However, my income is so tiny in comparison that it was pretty insignificant.

 

But, yes, I have considered that they will insist on looking at our family income when it comes to calculating repayment. If that happens, then I'll have to walk away, because we're working on a pretty slim margin.

 

To whom were you speaking? The loan company? Not federal loans? The college financial aid office? 

 

I honestly don't remember. It may have been Sallie Mae or possibly the Department of Education. They are Stafford loans. I know that they are now being administered by the Department of Education collections department.

 

So, your husband co-signed those loans without you, presumably? Parent loans require good credit, so do you presently have good credit? Have they forgiven the loans, effectively? Have you gotten a car loan or home loan or any other type of loan since then?

 

Yes, the parent loans are in his name. At the time we took those, our credit was acceptable, although not great. The last year she was enrolled, we did not qualify for the parent loan, which meant our daughter automatically qualified to take a larger loan in her 

name (which we are paying on her behalf). We've also taken a couple of car loans over the years, although we're down to one payment now. Our credit remains borderline, but my husband's income is usually enough to get us qualified if we agree to a higher interest rate. We haven't borrowed any money in the last few years, beyond the aforementioned car loan when my husband's previous car bit the dust unexpectedly, and we've paid down about half of the balances on our credit cards in that time.

 

I'm trying to understand where you are standing with the loan companies, what kind of loans they are, etc. It's hard to know where to go without knowing that.

 

Thanks for taking the time to try and help.

[Jenny in Florida]

But anyway... they don't need a transcript to get a job. If she graduated, she graduated, and that should show up in the main clearinghouse for student data whereby most employers check graduation records.

 

I was assuming she needed official transcripts to continue her education, not to get a job. And for education, anyway, outstanding student loans are not going to be helpful.

 

It's both, actually. 

 

I can't get my teaching certification in Florida without my transcripts. There are some tutoring agencies that pay significantly more than the center at which I currently work that won't consider me without seeing my transcripts. 

 

And, yes, I would like to get an additional credential or two. I'm not talking about graduate school, because at my age I don't think the return on investment makes sense. However, I would like to do a certificate program at a local community college and to earn a certification through a professional tutoring organization, both of which require me to submit transcripts.

[Katy]

If you need additional financial assistance, like for grad school or something, then you want to get them out of default by making a payment arrangement and paying on time for six months.

 

If you're just trying to pay it off, find out where to send a payment to BUT DO NOT MAKE AN ARRANGEMENT.  The reason is that while your loan is in default, it's not collecting interest.  You can make lump sum payments on an irregular basis and pay it off faster if it's not collecting interest.

 

I don't think the school can deny you your transcripts based on a federal debt.  But if you have an additional debt that you owe to the school, they certainly can.

[Frances]

But anyway... they don't need a transcript to get a job. If she graduated, she graduated, and that should show up in the main clearinghouse for student data whereby most employers check graduation records.

 

I was assuming she needed official transcripts to continue her education, not to get a job. And for education, anyway, outstanding student loans are not going to be helpful.

Many of the state jobs in my agency require transcripts to verify that you meet the posted requirements. Most of the technical jobs, whether they require a degree or not, require a specific number of credit hours in a particular field, and transcripts are the only accepted way to provide proof of meeting the credit requirements.

[LucyStoner]

I don't think the school can deny you your transcripts based on a federal debt. But if you have an additional debt that you owe to the school, they certainly can.

They can deny official transcripts or deny to send transcripts to third parties like colleges and employers. They don't have to, but it is a legal choice for them to make.

[Jenny in Florida]

If you need additional financial assistance, like for grad school or something, then you want to get them out of default by making a payment arrangement and paying on time for six months.

 

If you're just trying to pay it off, find out where to send a payment to BUT DO NOT MAKE AN ARRANGEMENT.  The reason is that while your loan is in default, it's not collecting interest.  You can make lump sum payments on an irregular basis and pay it off faster if it's not collecting interest.

 

I don't think the school can deny you your transcripts based on a federal debt.  But if you have an additional debt that you owe to the school, they certainly can.

 

Although I would very much like to get this off my conscience, I also need access to my transcripts if I'm ever going to make more than I do now.

 

It is my understanding that, legally, the transcripts are considered the property of the college, not the student. And, while withholding transcripts based on federal debt isn't required, it is "encouraged." The university I attended has chosen to comply.

[Tsuga]

 

It's both, actually. 

 

I can't get my teaching certification in Florida without my transcripts. There are some tutoring agencies that pay significantly more than the center at which I currently work that won't consider me without seeing my transcripts. 

 

Given that they MUST release records, as Katie pointed out, can you use those? 

 

And, yes, I would like to get an additional credential or two. I'm not talking about graduate school, because at my age I don't think the return on investment makes sense. However, I would like to do a certificate program at a local community college and to earn a certification through a professional tutoring organization, both of which require me to submit transcripts.

 

Yeah, in that case it seems necessary.

 

I'm concerned that if you lose that status, they will grab his refund. Have you considered that? Do you get the EIC? 

 

No, we don't get EIC. My husband actually makes decent money. It's just that he was the only breadwinner for almost 20 years while I was doing the SAHM thing. Because of some legal garbage we had to deal with some years ago, we also have no savings to speak of. Between those facts and the parent loans for my daughter's college, we have a lot less disposable income than most others who make the same amount of money.

 

That makes sense--we ourselves spent our retirement on staying afloat during the recession and are making it up now so I totally get it. It sounds like you really need to choose whether to just get your kids an education or to pay off your own.

 

I don't see how we could "lose injured spouse" status, since it is factually true that the debt is mine from before we were married and the bulk of our income is his. This past year, we did have to allocate the percentages and let the IRS take the tiny bit of our refund that could be attributed to me. However, my income is so tiny in comparison that it was pretty insignificant. 

 

So you are paying it off, right? That's what they take out of your taxes. I'm not sure why not just pay that before the IRS takes it? It looks like Florida is not a community property state and the fact that they are only taking a small part of your income reflects that.

 

To whom were you speaking? The loan company? Not federal loans? The college financial aid office? 

 

I honestly don't remember. It may have been Sallie Mae or possibly the Department of Education. They are Stafford loans. I know that they are now being administered by the Department of Education collections department.

 

I see. Okay. Sometimes you really need to get to the right person in those departments because they CAN get you income based repayment in  most cases. I guess the problem would be if his income is included and since you want to pay it off yourself, the payments are based on household income, and not your personal income. I think that since you're married, you two will have to live with that. This is one of the many reasons--not the biggest reason, but one of many--that we aren't married. If something happens to one of us, they won't help us until we are both totally destitute. It is extremely frustrating and I'm sorry you're facing that.

 

So, your husband co-signed those loans without you, presumably?

 

Yes, the parent loans are in his name. At the time we took those, our credit was acceptable, although not great. 

 

I guess that's good news. So you have the hit on your own credit then.

 

 

 

I don't think the school can deny you your transcripts based on a federal debt. 

 

Yes they can. Schools get punished for their default rates. They absolutely can deny subsequent enrollment and official transcripts if the degree is not paid for. It's not like the federal government will continue to issue loans via colleges and universities with huge default rates: there are limits to default rates and schools must keep these down. They keep them down using policies like the one Jenny is facing right now. No pay, no transcript. It sounds unkind but think about it: it's not like the colleges have their own funds to loan out and instructor salaries are based on tuition which is paid in large part through federal financial aid programs and loans. They can't just let people default and say, "Ooops, I guess our students aren't paying their loans! Can we please give more students loans to pay the instructors' salaries?" Hence, the institution becomes the bad guy.

 

I work with people in financial aid and it's really hard for them. They do not want to punish students but they also know that there are enough people who operate on "get an inch, take a mile" that they can't really afford to make exceptions without risking the entire thing collapsing.

[SparklyUnicorn]

No btdt, but I wonder if getting a lawyer would help.  I know, that'll cost more money, but to me if you don't they will likely just give you a hard time. 

[Jyhwkmama]

Is the amount something you can pay at once or do you need to make payment arrangements?

 

Rehabbing defaulted student loans is something I've helped a few people with.

 

You can check the status of your old loans at:

 

https://www.nslds.ed.gov/nslds/nslds_SA/

 

You can do that without speaking to a soul.

 

It will probably indicate that you need to contact Debt Collection Services (DCS). You can do that by calling:

 

1-800-621-3115

 

The people answering those calls don't work for the lender or a private agency. They work for the Department of Education.

 

It generally takes 6 months of on time payments for the loan to come out of default. The most common payment amount I have seen is $50 on balance under about $5000 and $100 on larger balances for borrowers with modest incomes.

 

I hope this helps.

 

This is great advice.

[Jenny in Florida]

 

So you are paying it off, right? That's what they take out of your taxes. I'm not sure why not just pay that before the IRS takes it? It looks like Florida is not a community property state and the fact that they are only taking a small part of your income reflects that.

 

Well, I've been making very little money in my own name since our daughter was born almost 21 years ago. So, if we file the injured spouse form, the IRS gets no more than a few bucks from me each year. It doesn't even add up to a drop in the bucket.

 

It is extremely frustrating and I'm sorry you're facing that.

 

Thanks.

 

 

[Jenny in Florida]

Is the amount something you can pay at once or do you need to make payment arrangements?

 

I would definitely need to make payment arrangements.

 

 

You can check the status of your old loans at:

 

https://www.nslds.ed.gov/nslds/nslds_SA/

 

You can do that without speaking to a soul.

 

Yes, I did that a few months ago, made myself notes about the amounts and other info, then chickened out before making the call.

It will probably indicate that you need to contact Debt Collection Services (DCS). You can do that by calling:

 

1-800-621-3115

 

The people answering those calls don't work for the lender or a private agency. They work for the Department of Education.

 

That's exactly the phone call I'm afraid to make. I'm concerned that those nice, quiet sleeping dog loans will wake up and start barking if I remind them I exist, even if it turns out I can't negotiate a payment I can actually make.

 

It generally takes 6 months of on time payments for the loan to come out of default. The most common payment amount I have seen is $50 on balance under about $5000 and $100 on larger balances for borrowers with modest incomes.

 

I hope this helps.

 

That does help, thank you. I'm still concerned that, if they insist on counting my husband's income, the required payments may be larger than I can realistically handle, but having some numbers to look at is helpful.

[Tsuga]

I wonder if you'd be willing to take out a loan from your DH and then pay him back? If he insists he doesn't want it, then you could pay it back to a vacation fund for you two or something. Would that be an option? I really respect your desire to pay these off yourself, and I feel the same way, but in your situation, in which being married makes it hard to do it separately, a private re-payment option could work if your marriage is strong in that regard. It sounds like you two have made it through a lot already.

[Jenny in Florida]

I wonder if you'd be willing to take out a loan from your DH and then pay him back? If he insists he doesn't want it, then you could pay it back to a vacation fund for you two or something. Would that be an option? I really respect your desire to pay these off yourself, and I feel the same way, but in your situation, in which being married makes it hard to do it separately, a private re-payment option could work if your marriage is strong in that regard. It sounds like you two have made it through a lot already.

 

It's not like he has disposable income. His salary pays the household expenses and debt, including the loans we took for our daughter's degree, We live pretty modestly and still don't have much left over every month. 

[LucyStoner]

What filing status do you use when you file your taxes? I assume married filing jointly. You *may* be better off with the student loan thing if you file separately instead of jointly. You have that option. You do both lose the ability to deduct student loan interest but if you are eligible for an Income Based Repayment plan for yours, you may come out ahead.

[Tsuga]

It's not like he has disposable income. His salary pays the household expenses and debt, including the loans we took for our daughter's degree, We live pretty modestly and still don't have much left over every month. 

 

I was just thinking, if they take your tax return, you could pay that back, unless that is being used to cover needs.

 

Maybe this is not a nice thing to say but... can your daughter help pay back her loans?

[Jenny in Florida]

I was just thinking, if they take your tax return, you could pay that back, unless that is being used to cover needs.

 

Maybe this is not a nice thing to say but... can your daughter help pay back her loans?

 

Even if we let them take his refund every year, it would be 16 years or more before the balances were paid. And because I'm not "making payments," I wouldn't get out of default until the end of that time.

 

And, no, our daughter can't make the payments. First, we absolutely committed to paying those for her. One of the reasons I ended up in the mess I did was that my parents promised to help me with my loans and then did not. I'm willing to go a very long way to avoid dumping the same garbage on my daughter's shoulders.

 

Also, she's on a very limited budget, herself. She's not yet 21 and paying all of her own living expenses and her tuition for her two-year professional acting program. There's no way she could take on any additional financial responsibility.

[Tsuga]

I commend you for paying for your own college and your daughter's.

 

So, let's say your refunds are around $2k annually--that is over $30k in loans. That is not a "small amount" but a very large amount. If I paid my entire refund into my student loans I'd have mine paid off in all of 5 years. (Something good coming out of this thread... I might actually do that!) So yours must be bigger than many of us are thinking when we are thinking "small". Either that or the refunds are tiny.

 

I'm not saying that to make you feel bad but to give you some perspective on what you're facing. There's a reason you haven't paid these off. That's a lot of money. The average student loan debt right now is under $30k, and that includes people who went to school in the last decade in which tuition was skyrocketing. You have an uphill battle for sure.

 

Katie has some good practical advice, but I guess the real issue is that you have taken on your kids' loans as well so that is "discretionary". I'm not sure when an actor starts to make enough money to pay off student loans, particularly not if they are still in a professional program, but I'm guessing it could take awhile. And then you have another fine arts major and I seriously doubt you'll be handing his loans over to him any time soon, either.

 

I guess just pay for the kids until they can pay them off themselves.

 

Suppose you can't get income-based repayment on your own income even if you follow Katie's advice. I hope you can, but it sounds like you are spending that on your kids' education.

 

In that case, can you sell anything to pay off a big chunk? You're tutoring now: can you tutor more? It is beginning to sound like less of a bureaucratic issue of getting a payment plan and more like an income issue based on choices to take out student debt for two additional people. I don't blame you for supporting your kids, but that is really what's affecting your ability to pay back.

 

Also, toasts to us. We are the first and probably the last generation to pay for our own educations and our kids'. :D My mom didn't pay mine--though I was forewarned--and my kids won't be able to pay for theirs the way things are going. They better remember our generation as the generation that paid just like Mr. Reagan said we should!  :grouphug:

 

 

 

[Jenny in Florida]

In that case, can you sell anything to pay off a big chunk? You're tutoring now: can you tutor more? It is beginning to sound like less of a bureaucratic issue of getting a payment plan and more like an income issue based on choices to take out student debt for two additional people. I don't blame you for supporting your kids, but that is really what's affecting your ability to pay back.

 

Also, toasts to us. We are the first and probably the last generation to pay for our own educations and our kids'. :D My mom didn't pay mine--though I was forewarned--and my kids won't be able to pay for theirs the way things are going. They better remember our generation as the generation that paid just like Mr. Reagan said we should!  :grouphug:

 

We don't really own anything worth selling.

 

And one of the reasons that I am feeling pressure to try and resolve this issue is so that I can start earning more. Over the last three years, I've increased my income each year, but only by working more hours. I'm now working close to full-time hours most weeks, meaning that the only way to increase my income from next year forward is to make more money per hour. And most of the jobs that would use my skill set and pay more per hour than I already make require me getting access to those transcripts.

[Crimson Wife]

No btdt, but I wonder if getting a lawyer would help.  I know, that'll cost more money, but to me if you don't they will likely just give you a hard time. 

 

A legal aid clinic might be able to help and that would be low- or no-cost.

 

I have to wonder if there is a way to get the parental loans for the OP's daughter put into deferment long enough to get the old loans paid off & the transcripts released. That might be the financially smart thing to do even if it ups the amount owed on the parental loans assuming that the OP can actually boost her income signficantly. As long as the take-home pay boost exceeds the extra interest paid on the parental loan, it's the smart thing to do.

[Jenny in Florida]

So, let's say your refunds are around $2k annually--that is over $30k in loans. That is not a "small amount" but a very large amount. If I paid my entire refund into my student loans I'd have mine paid off in all of 5 years. (Something good coming out of this thread... I might actually do that!) So yours must be bigger than many of us are thinking when we are thinking "small". Either that or the refunds are tiny.

 

Oh, and, no, our refunds are not close to $2,000 per year. In fact, some years we don't get any refund at all. Many years it's just a couple of hundred dollars.

 

The initial loans were quite small -- less than $10,000 -- but I've racked up quite a bit of interest in the last 30 years.

[Tsuga]

Oh, and, no, our refunds are not close to $2,000 per year. In fact, some years we don't get any refund at all. Many years it's just a couple of hundred dollars.

 

The initial loans were quite small -- less than $10,000 -- but I've racked up quite a bit of interest in the last 30 years.

 

I see. Okay. I always put minimum deductions so I get something back because I know I'm not saving except for retirement.

 

Re: Selling: Well, had to try. You never know. 

 

 

 

And one of the reasons that I am feeling pressure to try and resolve this issue is so that I can start earning more. Over the last three years, I've increased my income each year, but only by working more hours. I'm now working close to full-time hours most weeks, meaning that the only way to increase my income from next year forward is to make more money per hour. And most of the jobs that would use my skill set and pay more per hour than I already make require me getting access to those transcripts.

 

I hear what you're saying, but would it be at all possible to work 50-hour weeks or take private students for tutoring?

 

That's what I did to start paying down debt and move into a better place. Two jobs. It is very hard. But if you can't get income-based repayment based on solely your income, something's going to have to give.

 

Your kids are in college now. It doesn't sound like you're that old. :) Would taking on Saturdays help at all?

[Carol in Cal.]

If your daughter is in a two year professional acting program, aren't her loans and your loans on her behalf deferred until she is finished?

[sarasue7272]

They can deny official transcripts or deny to send transcripts to third parties like colleges and employers. They don't have to, but it is a legal choice for them to make.

What a catch 22. I have stafford loans, and I know you can't get rid of them. I had no idea about this though. Maybe I will order an official copy of my transcripts just in case!

[Anne in CA]

I am sorry. This is really yucky. I agree that you need to talk to a decision maker about releasing your transcripts, not just a low level worker bee. I talk to people all the time who can't work for me because they don't have a driver's liscence, because they have fines they will never be able to pay off. I hate that the government puts people in this sort of position.

[Jenny in Florida]

Tour kids are in college now. It doesn't sound like you're that old. :) Would taking on Saturdays help at all?

Actually, my daughter graduated from college in 2011, and we didn't have kids until we were 30. I already work Saturdays.

[Jenny in Florida]

If your daughter is in a two year professional acting program, aren't her loans and your loans on her behalf deferred until she is finished?

It's not a college program.

[Jenny in Florida]

No advice, just that I hear you re the frustration of being caught in a Catch-22 situation.

 

Thank you.

[TammyS]

We don't really own anything worth selling.

 

And one of the reasons that I am feeling pressure to try and resolve this issue is so that I can start earning more. Over the last three years, I've increased my income each year, but only by working more hours. I'm now working close to full-time hours most weeks, meaning that the only way to increase my income from next year forward is to make more money per hour. And most of the jobs that would use my skill set and pay more per hour than I already make require me getting access to those transcripts.

 

Since you aren't working full time hours, is it possible to take on a 2nd job, temporarily, to get you over the financial hump?  Not necessarily something in your field, just any second job, so that you can stockpile enough cash to get your loans out of default and then get your main job up to the level where you want it?  I know it would be tough, but it wouldn't be forever.

[Jenny in Florida]

I see. Okay. I always put minimum deductions so I get something back because I know I'm not saving except for retirement.

 

Re: Selling: Well, had to try. You never know. 

 

 

I hear what you're saying, but would it be at all possible to work 50-hour weeks or take private students for tutoring?

 

That's what I did to start paying down debt and move into a better place. Two jobs. It is very hard. But if you can't get income-based repayment based on solely your income, something's going to have to give.

 

Your kids are in college now. It doesn't sound like you're that old. :) Would taking on Saturdays help at all?

 

I want to respond to this more fully, and then, if it's okay, I'd like to move on from suggestions about how to manage my life or make more money, since that really wasn't what I asked in my original post.

 

(Please understand: I'm truly grateful for the time and effort folks are putting in to try and help me brainstorm, but I've already spent a lot of time looking at most or all of these alternatives, and there are some factors I'm not comfortable sharing in a public forum that close some of these doors.)

 

Currently, I juggle three part-time jobs in order to scrape together almost full-time hours most weeks. I will be adding a fourth in January (although I will likely be scaling back on one of the others in order to make room). All of them pay about the same rate. One of the things prodding me to consider tackling the transcript issue now is that I have recently been smacked upside the head by the realization that, as long as I am willing to work for the exact same hourly rate I currently make, with no benefits and no guarantee of a minimum number of hours in any given week, employers will trip over themselves to give me as many part-time jobs as I can handle. However, I am in my 50s and have some health issues, and there is is simply a limit to what I can do. In order to make any meaningful steps forward, I'm going to have to get access to those stupid transcripts.

 

The question of taking on private tutoring students is . . . iffy. I signed a non-compete agreement when I took the tutoring center job that says I will not provide similar services elsewhere unless I am working for a school recognized by our state Department of Education. So, in order to do any tutoring of my own on the side, I would need to find a way to offer something distinctly different from what I do at the center. 

 

The only way I put together as many hours per week as I currently work is by stacking multiple short shifts at different jobs together in various combinations six days a week. In theory, For example, this week, I did four half-day shifts and one full day substituting in assorted public schools, three afternoon/evening shifts at the tutoring center plus the one I'm about to leave for this morning, and three two-hour shifts tutoring online (the maximum number of hours that service allows me to schedule each week). None of these jobs has a set schedule week to week, making it nearly impossible to plan ahead or have a life. This past week, I had to walk out on a dental appointment I had waited three weeks for, because I was squeezing it in between subbing and tutoring, and I ran out of time when the dentist ran late.

 

My husband and friends are encouraging me to try some other things, career wise, but I simply don't have the  time or energy to pursue those as long as I'm keeping up with the work life I already have. Something needs to change, and adding more hours of running around stressing for my current per-hour rate is not going to help.

 

Again, I appreciate the concern and the suggestions, but what I'd really love to hear is whether anyone else has been through the loan rehabilitation process and how/whether you managed to negotiate a payment plan you could live with.

 

Thanks!

[Alessandra]

No advice, but I just wanted to say that I am sorry for what you are going through. When I think of the U.S. system of paying for college and compare it to Europe -- well, it reminds me of health insurance....

 

I had no idea transcripts could be withheld. That stinks.

[Jenny in Florida]

Since you aren't working full time hours, is it possible to take on a 2nd job, temporarily, to get you over the financial hump?  Not necessarily something in your field, just any second job, so that you can stockpile enough cash to get your loans out of default and then get your main job up to the level where you want it?  I know it would be tough, but it wouldn't be forever.

 

Please see my most recent post.

[Carol in Cal.]

It's not a college program.

But if it is an acredited post-secondary program, it might still qualify for deferment, right?  At least that is worth checking.

[chiguirre]

I think you're over the barrel as far as getting your transcripts is concerned. Maybe it's worth attacking the problem from a different angle. What jobs could you get without a transcript that would pay better than you current gig? If there aren't any, what can you realistically expect in terms of lifestyle with your current wage? Are there any changes you can make that would make that wage sustainable?

 

I don't have any answers but maybe thinking along these lines will help you find a solution.

[Alessandra]

Some questions I would have

 

Is repayment based on family income or on your IRS income. Someone suggested filing separately. I know in divorce situations, it is possible, by agreement, for each spouse to claim one child and file as head of household. Can you do this if you are not divorced?

 

Can you change your filig status on an amended return? I don't know. But I might invest time in running the numbers for various tax situations and see what it looks like.

 

Is repayment based on your current income, or do they look at past years' income too? Is it a separate form, or based on tax status?

 

I apologize for even offering suggestions, since this is an area I know nothing about, but I guess that, if I were in your situation, I would be trying to manipulate numbers.

 

My biggest concern for you is what happens to your social security when you reach retirement age. I understand that legislators see the injustice of docking SS payments, but who knows what bills will be passed. Just thinking out loud, but I might want to research pending legislation and see where elected reps from my state are taking positions. Then go to their offices or write.

 

Your situation shows how mixed up the system is. If you could get a transcript, you could earn more money, pay off loans and probably pay higher taxes. Imo, the government is losing money by denying you a transcript. Legislators fund public colleges -- influence? It is not as though you are asking for loan forgiveness.

 

https://www.govtrack.us

[Anne in CA]

No advice, but I just wanted to say that I am sorry for what you are going through. When I think of the U.S. system of paying for college and compare it to Europe -- well, it reminds me of health insurance....

 

I had no idea transcripts could be withheld. That stinks.

Well, don't envy Europe over this one, there is no point. My BIL is in the same position as Jenny because Denmark will not release his transcripts so that he can have a better job. He can prove he has a degree, he has the actual diploma, but he is severely hampered in his career because Denmark will not release transcripts for people to work abroad. They consider the degree as belonging to them even though BIL's parents paid for his college and have paid more than 66% of their income in taxes their whole lives. BIL's father is legally blind from some cateracts it has taken more than three years on the waiting list to get removed, so I don't really think you want their healthcare, either. It only looks shiny on the outside.

[Guest]

Just wanted to tell you that when we went to get my student loan out of default, they definitely insisted on counting DH's income but! they DID take into account every single other financial obligation we (both) have when calculating the payment. And they didn't need proof. I just told them over the phone. I included "educational expenses" which obviously is code for books.

 

We set up an alottment to come out of our bank account and actually ended up paying ten dollars a month more than what they suggested based on income/expenses. I have no doubt if I'd said I needed to pat ten dollars less they would have accepted it. They really just wanted me to start paying on it reliably...whatever we could afford.

[MooCow]

Not sure if this applies in your situation, but it popped into my head and perhaps may help in the future. I have 2 teacher friends who worked in very low income schools, and got some of their student loans reduced. Obviously that won't work until you can get your transcripts.

 

Also a neighbor went years with out paying hers, then when she married, they took her tax return. She called them and got a deal, repayment wise. They really helped her out. I hope it works out for you!

[redsquirrel]

I got my loans out of default.  It was years ago, so my memory is foggy.  But my initial payments were quite low, like 50 or 100$ a month.  Now, I know that isn't nothing, but it was low compared to what it could have been. That is why I say low. 

 

I had zero choice in one part, and I hated it: I had to give them access to my bank account. They sucked the money out automatically, I did not send them a check or make a payment. That was something about which they were immovable and would not negotiate. 

 

Once that year was over I was out of default...and my payments went up a whole lot. They did not warn me about that and I freaked out.  I then refinanced or something with a federal program.  That made my payments manageable...but it is like starting over again. So, all those years that I did make payments, and I did try as hard as I could in my 20s and 30s to stay out of default, count for nothing. OTOH, I am out of default and have a 'clean' credit record.  And, as before, the money gets taken from our bank account automatically.

 

Here is what i was able to piece together: My loan got out of default b/c there are companies that buy defaulted loans. They contacted me, I did not contact them. I think their reward for taking on defaulted loan is that for the year you are making payments they keep the money. I don't think it is actually applied to your loan. Then when you have proven that you are able to make payments, they sell the loan for more more money.  You are getting screwed and you have to accept that. They don't tell you what your options are when you are done getting out of default. They just sell your loan and cut you lose. I was making payments and then I got a letter saying "congratulations, you aren't in default any longer and that is the end of our relationship." And the same day I got a letter from a different company saying "Hi, we own your student loan now and you owe us 500$ a month! " I had been led to believe that they payments I was making to get out of default would stay the same while our income stayed the same. 

 

If you can't afford the new higher payments, that is not their problem. If you end up back in default, so much the better for them. Maybe they can buy it again and get more money from you.  It was only after spending days on the phone with the new company telling them that there was no way I could ever afford those payments, they they had better just default me again, that one person asked if I had heard of federal consolidation of student loans.  She sent me the paperwork and told me that if I told them I was applying for federal consolidation that I could not be made to make a payment. So, I never had to make the huge payment, and I was enrolled in the federal program within days.

 

So, look into some sort of federal program that refinances or consolidates your loan, but I think they can't take you if you are in default.