What can happen to me if I default on a Salliemae private student loan? I have exhausted all payment options.?

Question

I owe Salliemae over $121,000 all in private student loans. Once I graduated I could not find a job in my field. The minimum payments on these loans was more than my monthly income. I could not afford to even pay the lowest minimum amount, so of course my loans have gone into default now. Their recovery department contacted me and stated I could pay them $66,700 and the debt would be considered paid in full (which if I had this kind of cash/credit I wouldn't be in default) or I could pay them the past due amount of $12,000 and then pay them $250 a month for two years. This would be awesome but I cannot afford the $12,000. My question is what are my options? I live in Kentucky and know they will probably garnish my wages but am just wondering if anyone knows how the Statute of limitations works on private student loans? I have been doing some research online and have found conflicting information as to when the Statute of limitations clock starts running, when the debt is accelerated? When the promissory note is signed? When the last payment was made? I really want this all to just go away and I know there are millions of people in the US who tried to live the American Dream and have a bright future who now do not have a future and no hopes of owing a home or affording a family because these student loans will haunt them forever. I know that I shouldn't have taken out so many loans but being a naive 18 year old I was thinking my future would be bright and I would be successful with my new found life as a Biologist but reality has since sunk in. Please don't respond that this is all my fault and it is my responsibility because I know that, I am simply asking for some advice. Perhaps one day the government will help all us buried in student loan debt citizens just as they did for those people who took out mortgages they could not afford which caused the collapse of the housing industry instead of bailing out the banks who knowingly lent money to those who could not possibly pay it back.

Answer 1

Your credit will be absolutely ruined for a very long time. They can sue you, garnish your wages (not in all states), and continue to demand payment in full. With credit that bad you won't be able to get a house, car or any other loan and may have trouble getting an apartment, utilities in your name, a cell phone, car insurance, and even may not be able to get some jobs. There isn't really any magical advice for you. You know you screwed up by taking on such significant debt, and there is no easy way out of it. It's not going to just go away. Even when the statute of limitations runs out (it starts from the time of your last activity, so last payment usually), a collections agency will still hold the debt and try to collect. Your cosigners are also going to have their credit ruined. Anyone you listed as a reference is going to be hounded as to your whereabouts.



Really I'm not sure what you want someone to tell you. You don't really have any options. You either pay what you owe, or you don't. Call the lender again and ask them what else they can do to help you. The key is to stay in contact with them so they know you aren't just ignoring your debt.

Answer 2

They'll start taking your earnings tax return, garnishing your wages, you'll by no means be in a position to buy a residence, or a vehicle, considering that your credit will stink. Defaulted pupil loans in no way go away. For some strange intent people suppose that if they're fairly ancient, they simply disappear. No longer the case... Oh, and if you do go into default, they legally begin adding all kinds of expenses and larger curiosity premiums onto it... So a mortgage that could have started out at 5000.00 will swiftly become 15,000. Here is a newsletter, in the back is a good bit on default.

Answer 3

I would love to know where the student bailout is. I'm in the same situation with close to the same amount owed, and I have yet to get into my field. Most of the representatives don't care, and the first question they ask is will you be paying today or when can you? There's never an "I understand your situation, we're in a bad economy," nothing. They just want you to put your bank account down to 0 so they can get their money.