topic Re: SPOUSAL CONSOLIDATED FEDERAL STUDENT LOANS in Student Loans

SPOUSAL CONSOLIDATED FEDERAL STUDENT LOANS

Anonymous — Sat, 06 Jul 2019 19:11:48 GMT

Back in 2005, My first wife and I created a Federal Consolidated Student Loan. Since that time I have found out that those are not even available.

We were divorced in 2006, and since then the haunting of this Consolidated Loan has been a huge shadow cast on not only my credit report but my finances. I have talked to several people at the Direct Loans Center and they say there is nothing that can be done, due to the Federal status of the loan.

My ex-spouse and I have not spoken since the divorce and will not speak ever again.

Has anybody had any experience with this type of Consolidation and is there any talk of Congress doing anything to help borrowers in my situation?

The loans are currently in a forebearance status due to being in the middle of a Chapter 13 Bankruptcy. When I get out of Bankruptcy in the next 8 months, I will have to continue making payments on this loan. My ex-spouse claims this was fraudulent and that she never agreed to the consolidation.

Anybody have any suggestions without any negitive comments, yes I know this is a bad situation, but positive suggestions would be very helpful.

Re: SPOUSAL CONSOLIDATED FEDERAL STUDENT LOANS

calyx — Sat, 06 Jul 2019 21:53:31 GMT

Can you give more information re: why this type of consolidated loan is 'different'/unavailable?

I have a consolidated loan through the feds, it's something that is usually offered to borrowers of multiple lines, and is even required to make some loans eligible for forgiveness programs, so I was curious if there is anything special about yours.
As it is a federal loan, you can work with your servicer to get a payment plan that should work for you (many are income based/driven and use your income to determine the payment). If you are eligible, you can even get your loans forgiven after a certain number of qualifying payments (if you are on a standard repayment plan, it's after 20 years) through REPAYE or PSLF programs.

Re: SPOUSAL CONSOLIDATED FEDERAL STUDENT LOANS

Anonymous — Sat, 06 Jul 2019 22:54:42 GMT

The difference with what I have is that both my ex wife’s and my loans are combined into one loan...I’m being stuck with paying..The ex claims fraud...the courts will make an order for separate payments, however the Federal Govt won’t break the loans up...There is no recourse if either one of us decides to quit paying, other then the Govt garnishing wages and tax returns. My ex does not work so ultimately I’m on the hook for mine and her loans

Re: SPOUSAL CONSOLIDATED FEDERAL STUDENT LOANS

calyx — Sun, 07 Jul 2019 03:23:57 GMT

@Anonymous wrote:
The difference with what I have is that both my ex wife’s and my loans are combined into one loan...I’m being stuck with paying..The ex claims fraud...the courts will make an order for separate payments, however the Federal Govt won’t break the loans up...There is no recourse if either one of us decides to quit paying, other then the Govt garnishing wages and tax returns. My ex does not work so ultimately I’m on the hook for mine and her loans

Man, I am so sorry, that sounds awful.
And yep, I have never heard of people combining loans. With your loans, you are still subject to the same protections though, re: various payment schemes. What I do kind of wonder, is that since your loans are combined, if you both have to turn in tax statements for recertifications if you do end up on an income based plan. If one of you doesn't comply then you are back to square one.

This is definitely out of my depth, I can't imagine navigating it without some kind of legal help. At the minimum, I would hope that legally, she would be compelled to help in whatever way is necessary (if she doesn't contribute monetarily, that she at least does the paperwork she would need to keep the collective loan going at the proper payment schema).

You have my best wishes for this.

Re: SPOUSAL CONSOLIDATED FEDERAL STUDENT LOANS

Anonymous — Sun, 07 Jul 2019 05:03:45 GMT

I’ll tell you, the FFEL Spousal Consolidation loan was the most ridiculous offering the Federal Government offered. No, I don’t have the same considerations as a regular loan. Due to the fact that we are now divorced...Something really needs done or a piece of legislation needs passed to break these loans apart. At the present time, even a judges decree in the family court system won’t work...This is a job for Congress and they are too busy trying to give free education and lessening the value of a college degree.

Re: SPOUSAL CONSOLIDATED FEDERAL STUDENT LOANS

Anonymous — Sun, 07 Jul 2019 23:42:34 GMT

I had not idea these type of loans existed and it sounds like you, like current borrowers, are stuck in legislature that fails to protect people from the consequences, not the intent of such a lone. Hoping that new legislature is passed soon to fix it.
Since I've never heard of this, I did a little bit of research on the internet. (Link to follow tomorrow) If what I've read is to be believed, you may have a few options:
1. Direct Consolidation Loan. You would have to be at the point that you're resigned that the loan is yours (vs "ours"). I believe your loan is a FFEL loan, correct? This means you qualify for IDR plans (or possibly only the income-contingent repayment plan, I'll have to check). Since she doesn't work...well it would just be based off your income (you both have to submit your "income" info. It doesn't take your loan balance into account, so if you can make the payments for the required period until forgiveness (25 years?) and still have a loan balance, perfect. If not and you can afford to pay them off, this maybe isn't for you. Another thing I was reading was something about them still retaining some individual properties and as such, her portion might be forgiven (if it's really potentialy Borrower Defense to repayment, disability discharge, etc and not just something she doesn't want to pay).
2. You could refinance the loan. I read an article specifically talking about this and it says if you do find a lender willing to do it, amongst them there are some who would split it. I don't see your ex going for this though as she would be responsible for her portion of the loan again.
I'll keep looking.
Good luck on your search.

Re: SPOUSAL CONSOLIDATED FEDERAL STUDENT LOANS

calyx — Mon, 08 Jul 2019 00:18:55 GMT

Thanks for doing the legwork, Sabii

So with this:

2. You could refinance the loan. I read an article specifically talking about this and it says if you do find a lender willing to do it, amongst them there are some who would split it. I don't see your ex going for this though as she would be responsible for her portion of the loan again.

And this:

My ex-spouse claims this was fraudulent and that she never agreed to the consolidation.

She could put her money where her mouth is and agree to the refinance. It would resolve the "fraudulent" problem she's claiming, as the loans would be hers again, but as you are going through a bankruptcy proceeding, it might be difficult for y'all. I don't know if that's something the judge could order, but maybe it's a possibility? It would take away any federal protection (I'm assuming a private/financial institution doing the refi, I don't think a gov't servicer will), but then, you wouldn't have to deal with her debt, either.

Not an expert - just a thought I had after reading Sabii's post.

Re: SPOUSAL CONSOLIDATED FEDERAL STUDENT LOANS

Anonymous — Mon, 08 Jul 2019 02:34:31 GMT

Sabii,

You are such a good person, thank you for taking the time and investment into looking into this for me. I have attached a link to an article you can see what hell I am going through. My ex wife and I have been divorced for over 13 years and this is still haunting me today. The loan is approx. $8000.00 and at some point I will have to do something. Even though the minimum payment is about $65.00, it is still a bleak reminder https://thestudentloanlawyer.com/247/beware-the-nightmare-loan-federal-joint-consolidatoin-loans/

Since this Forum has many thousands of people, I wondered if this would be a good place to get some type of petition started to send to our United States Congress people to say enough is enough, let these FFEL Spousal Consolidation Loans be either forgiven because they were bad plans in the first place, or have the government allow for a refinance based on individual borrowers to break away from this madness!!

Re: SPOUSAL CONSOLIDATED FEDERAL STUDENT LOANS

Anonymous — Mon, 08 Jul 2019 02:38:53 GMT

Calyx,

Thank you for your response in trying to help me figure this thing out. I have tried to talk to banks about refi, and most say you would have to take a personal loan, or private student loans with another one of the vultures like Sallie Mae. Right now, I do not qualify to have such a loan as my credit is too low, and I am reaching the end of a 5 year Chapter 13 Bankruptcy which, because of the filing has given me 5 years of relief from payments. My Chapter 13 is now coming to a close, thank God, and will have to resume the payment of this loan.

Re: SPOUSAL CONSOLIDATED FEDERAL STUDENT LOANS

calyx — Mon, 08 Jul 2019 14:25:04 GMT

I read that article, and with a financially ruinous ex-spouse, I just saw red for everyone in the comments section (thank heavens for small favors - because that could have easily been me with the FFEL spousal consolidated loans!!!). I am so sorry re: you having to deal with this.

I would happily sign whatever petitions are around to put into place some sort of change for how these are dealt with. I won't get into politics/the5things and the issues re: student loans/forgiveness/etc, but I know writing my congresscritter wouldn't do any good with this particular issue, though I would happily do something else to help (though maybe I'll write them anyway just for my own spleen venting).

Re: SPOUSAL CONSOLIDATED FEDERAL STUDENT LOANS

Anonymous — Thu, 11 Jul 2019 20:13:26 GMT

Almosthesven351:
That was one of the articles I read. I'm sorry, you're correct. To split the loans you would need to a private loan and your wife to sign saying a portion is here which sounds like she'll never do. That's not right!

At $8000 (not $80,000) it's going to save you more time, energy and money just to pay it off. I hate to say that, I absolutely do not think this is fair, but what will end up happening is the interest will accrue and you'll owe that much more. I'll not sure how the bankruptcy works, but when you can start making payments again, throw what you can at it (over there minimum). Forbearance is a last resort. It will not be reporting good payments to your credit report and you'll need that to rebuild; the one good thing is that this old tradeline will help with your age instead of having to start from scratch.
I would say yes to the petition but I've seen them removed a while thread if a guy asking if people wanted to join a class action against Servicer. I think another platform would be more appropriate.
Writing your congressperson seems to be the recommended move. I'm cynical though because I've seen them do very little to fix these horrible effects of good ideas. It's happened for decades, parties and administrations are irrelevant. The higher education lending system is broken imo.
Maybe your efforts or your story can change things for someone else, even if it's just someone in a similar situation feeling like they are not so alone.

Anywho, keep us updated and when the bankruptcy is done this forum is great for helping people rebuild. I've seen it only take a few years for most people who work at it. Things will get better. 🙂

Re: SPOUSAL CONSOLIDATED FEDERAL STUDENT LOANS

Anonymous — Mon, 15 Jul 2019 22:03:26 GMT

I have a question for OP...

When you divorced, how were the accounts/finances split up? Who was ordered to make the payments?

My thought is that you MAY be able to go after her in civil court (if you have proof of her original loan amounts before consolidation). If her name is on the loan then she is responsible for 50%, right? If you are forced to pay the entire balance, couldn't you go after her for her part?

Even if she is not working, you can still get a judgement for it, and make HER pay YOU back.

I would talk with an attorney if you both were ordered to pay the loan back in the divorce.

Just a thought...