Senior citizen/low income/high balance on Student Loan

[Anonymous]

Federal Direct Loan sold to Sallie Mae last month. Been on hardship deferment for 13yrs...interest accruing...don't see how I can even begin to pay off these escalating totals....I am 67yrs old and working as many hours as I can handle to supplement my Social Security to make my other financial obligations. FICO 759. Chiropractor working in rural area, but no financial forgiveness such as MDs get in same situation. Have three more years to take a deferment. Should I negotiate with Sallie Mae for interest forgiveness and try to chop away at the principle until I can't work anymore?? Is there anything on the horizon, such as was suggested by Suze Ormond last year, that there may be some changes coming for those on financial hardship for longer than 10yrs?

[SCF]

I believe the current law requires that student loan debt be forgiven after 25 years of payments, and "payments" include months in which you were not required to make a payment due to hardship deferment or having and IBR payment of zero.

I don't think you'll get Sallie Mae to adjust the interest, but it doesn't hurt to ask.  The reason for that being that these loans will not go away until they are paid, unlike private debt, there is not statute of limitations, and they can take actions like seizing your tax return or garnishing your wages if you default, even without a judgment.

Have you considered the IBR payment plan?  That is based on your income, and would probably give you a small, manageable payment once you run out of hardship deferrment.  It would also adjust as your income changes.

[laz98]

Definitely look into the IBR plan.  Right now it's allowing me to get our credit card debt under control, so that later I can focus on just paying my student loans.

[Anonymous]

Thanks for your reply....forgive me, but I never heard of IBR plan.....please advise....

[laz98]

Go to IBRinfo.com

[Anonymous]

Thank you for your reply.  What does IBR stand for?  Sounds like something to look into....   Funny, FDL lost my loan for three years...1997 to 2000....so my last payment was in 1997.  This has been such a mess...

[laz98]

You are very welcome

IBR stands for Income-Based Repayment.  Its twin is ICR, or Income Contingent Repayment.  I don't know the details of that one, just that they are very similar.

Student loans tend to be much more of a headache for people than most realize....myself included! 

[Anonymous]

Oh, great.....thanks so much....

[laz98]

The IBR website is very helpful.  I hope you can find something that works for you!

[kjel]

You might end up with an IBR payment of $0 on Social Security which is better than being in default which can garnish your Social Security benefit up to 15%. That said, if you are still able to you should work until you are 70 in order to maximize your Social Security retirment benefit-hopefully you've already signed up for Medicare though since you were eligible at 65.

This article was helpful: http://www.fastweb.com/financial-aid/articles/3355-ask-kantro-people-retiring-with-student-loans-may...