Sutdent Loans: Deferrment, Dismissal

Student Loans

If you are behind in government guaranteed student loans, there are ways to “catch up” or re-establish and get back in the good graces of the lender. Contact your student loan provider to start that process.

If you consolidate your open loans, it is common for the old loans to show a balance due after the consolidation, as well as the new loan reporting. Your debt has appeared to have doubled. That error can, and should be fixed. Be pro-active, check your reports, and make sure that they get this right. It can be a nasty surprise when suddenly you have double the student loan debt on the same income. Your DTI ratio has dropped considerably, and your chances for new loans have dropped as well!

If you are thinking of defaulting on those student loans altogether, there are really no good ways to do that. The government will keep your tax refunds, forever. If that does not work out, being the government, they will actually garnish your Social Security or SSI checks. They are going to get you for as much as they can. You cannot get out of government backed student loans by Bankruptcy or Debt Negotiation.

There are two ways out of government backed student loans; Medical Dismissal is one of the ways. There is a lengthy and time consuming process, but with a proper medical certification, you can actually get those student loans written off. The other way out of student loans is death, and I am not sure that your estate would not be held liable, as the IRS settles the books on your life. Estate taxes are a fact of life, and it stands to reason, that if the IRS holds your tax refunds for decades, they would wreck your estate as well.

The process seems to work like this: You default on the payments to the lender. Sallie Mae gets upset as she gets the loan back via guarantees. Then Sallie Mae gives up on you, and it tends to come back to the State Regents or Higher Education Board. They obtain wage garnishments to try to collect the balance forever, as well as the IRS, who then grabs as much of your estate of it possibly can.

CCFG has cleared up the aftermath of hundreds of individuals who had gotten behind in their student loans, as well as several who actually were in garnishment at the time. What can we do for you?