New Contributor
ds3
Posts: 76
Registered: ‎10-02-2012
My Story

This is by no means recommended by me, but I wanted to share my Direct Loans saga. In 2003, I decided to attend grad school to earn an MA and bump my pay up (I'm a public school teacher). I had never borrowed student loan money before, and really didn't have to for grad school, but after filling out the FAFSA they offered lots ($45k) of relatively free money. I had the best of intentions to invest it and pay it all back after 2 years, then my wife lost her job and we had to live off of it for a couple of years. After going into default and ignoring it long enough, it grew to over $60k, and I got the dreaded notice that they were going to tag me for 15% of my gross income. I called, and they had me send a ton of documentation to qualify for Income Based Repayment. It took about 4 months, and I was stunned to see that my new payment was $53 a month...no, I didn't miss a zero...really, $53 a month. After a year, they dropped all the late fees, etc., the loan was totally rehabbed, and they sold it to another lender. I immediately filed for teacher loan forgiveness ($17.5k)...took 3 months and goodbye 33% of my loan, which they applied as future payments, which makes my next payment of $53 due in January, 2042. I will continue making regular payments until I get to 120, then the rest goes away in Public Employee forgiveness right before I retire. The moral is, call them! Don't wait for them to tag you for 15%, but if they do, call them immediately. I hope this helps someone else get through student loan mess.

Established Contributor
bahbahd
Posts: 729
Registered: ‎08-12-2011
Re: My Story

That is a great story. You are very lucky to be in public service. I applaud you for your dedication to the education of those around you.

New Contributor
ds3
Posts: 76
Registered: ‎10-02-2012
Re: My Story

Thanks for the positive words. I just hope that someone out there benefits from what I went through.

New Visitor
brezofleur
Posts: 1
Registered: ‎04-09-2011
Re: My Story

Your story is very encouraging. My BF has defaulted on his 4 loans (was $12k and now up to $24K). He received a notice about the garnishments this week and we'll be calling them tomorrow.

 

I noticed that you said they removed late fees. After a year of ontime payments, did they automatically drop them or did you call? Do you have any other advice that I can pass onto him?

 

Thanks again for sharing your story!

New Contributor
ds3
Posts: 76
Registered: ‎10-02-2012
Re: My Story

brezofleur wrote:

Your story is very encouraging. My BF has defaulted on his 4 loans (was $12k and now up to $24K). He received a notice about the garnishments this week and we'll be calling them tomorrow.

 

I noticed that you said they removed late fees. After a year of ontime payments, did they automatically drop them or did you call? Do you have any other advice that I can pass onto him?

 

Thanks again for sharing your story!


I didn't have to do anything, they just dropped all of the fees, but that's no guarantee they will do the same for him. The lenders want to help people get back on track, and it seemed to me that the last thing they wanted to do was take 15% of my paycheck. The most important step is to make the call, be honest about your situation, and follow through with whatever arrangements you make, no matter how much it hurts or how embarrassing it is. He wants to try for Income Based Repayment (IBR). Depending on what field he works in, he may be able to qualify for some kind of loan forgiveness in the future.

 

Best of luck with all of this. I hope he gets it resolved in a way that works for everyone involved.