Thank you for your input.
My friend has told me that actually these loans are private student loans from Sallie Mae. He has government loans too, but they are not nearly as big as these. As far as collections go, would he have any chance at negotiating with the collection agency for a settlement less than the full amount?
If the answer to this is no, which means my friend will eventually have to pay back all the 100k+, I'll get him to enter the rehab process to improve his credit. Then hopefully in some far future he'll be able to finally pay back all the debt from Sallie Mae with cut-throat interest. I don't think private student loans are dischargeable in bankruptcy...
@Swapmeet wrote:I couldn't say with any assurance... The best thing to do in any case, is call the lender. I am having a hard time understanding why there is so much hesitation in doing this.
As you can tell, neither I nor my friend has any experience dealing with student loan lenders. He should know his loans better than I do, but I'm more knowledgeable with financial matters.... He was so angry to see the debt grow faster than he could pay it that he doesn't want to touch the debt again. If I didn't explain the effect of leaving the student loans in delinquence on any future loan application, he may have thrown away the letters from the collection agency. I'm hoping that by fully explaining the situation and his options I can give him some boost of confidence to get back on the solvency track.