I am trying to get two very old (28 years) student loans out of default. I hope you can steer me on where to start. Me - 48 years old / Averaged about $12k income per year for the past 5 years. If I get healthy I can expect that to go up to 24k to 35k in about 3 years. The school was DeVry (I know I know)
I have been garnished but I don't make enough for them to get anything.
Background on loans:
1- FEDERAL PERKINS (Disbursement Date 10/13/1987) - Principal Balance $700 + Outstanding Interest Balance $982 = Total Debt $1,682
2- FFEL STAFFORD SUBSIDIZED (Disbursement Date 09/07/1987) - Principal Balance $2,800 + Outstanding Interest Balance $5,184 = Total Debt $7,964
I've been looking at different options of consolidation, rehabilitation, settlement etc.
Consolidate & Rehab With IBR
Using the calculator on studentaid.ed.gov -
I could enter into an Income-Based Repayment plan and based on my income from 2016 ($8,800) my payments would be $0 for 300 months and total forgiveness at the end.
If I use $12,000 income i can expect next year I get $0-$93 payments for 300 months for a total of $5,100 over 300 months.
It just gets ridiculous after that with $18k income I'll be paying over $17,000 for the loans over 293 months. I'll be (hopefully) 73 years old when it gets finished.
Settlement
Using the 100% principle & 50% interest/collection fee method I can get a lump sum settlement of around $6,600. It would take me years to save that up.
Mixture of Both
I could try to settle the Perkins loan for around $1,100 using the above and then put the Stafford Loan into rehab using IBR
Forgiveness?
I've read that they may write-off (forgive?) a student loan if it's under $1000. Anyone know if this is true? And whether i could use that on the Perkins by paying a lump sum of $700 to get it under $1000 and then asking for it to be written-off? Saving myself the entire amount of interest/collection fees while paying off the principle entirely.
Staying the Course
I could in a last resort stay in default for the next 2-3 years and try to save up $6,500 for a settlement. Remembering that I am being garnished so banks are out of the question until I get this solved.
That's all I have. Anyone have some advice for me? Like which plan is best for my circumstances or something I have missed or don't know about?
Thanks in advance
P.S. I filled out a form about 30 days ago for a loan cancellation because I read that DeVry may be one of the schools eligible for them. Haven't heard back yet.
