Information regarding curing default

[Anonymous]

I am currently in default on Student Loans.  Had unexpected pregnancy of twins and subsequent loss of business, income, followed by bankruptcy etc.  Since Bankruptcy, I have not recovered financially enough to begin the payments- we are just barely making it.  I am not sure what to do, I want to do the right thing but the amount of the payments was already at over 400.00 per month on a 40 year repayment before the default and I shudder to think what they would want now- there is simply no way I can manage even a hundred a month right now - I had thought that maybe once I got the house equity up a bit more we could refinance and pay them off but they are rather large and our home (as small and afordable as it seems) has very little equity due to the current market- I am afraid to let them continue to get larger and larger as I may never get them paid off then.  Is there any way to settle a student loan debt for the original amount borrowed or closer to that than with all the interest?  Is there a way to repay (I am sure I got at least one maybe two forbearances or deferrments while everything was falling apart and I don't think I have any more) what and when I can afford without it all getting just chewed up in interest and spinning my wheels?  I also wonder why when I was getting these loans and exploring my options with my college they never mentioned to me that I qualified for a low income program - which would never have put me in this position?    Any info is appreciated.

[LynnInMN]

For  starters,  are these federal or private loans?   How much do you owe??

[Nectarine]

Instead of spending 12 months trying to rehab old loans (I never had the money to pay on time every month for that long), I did a direct loan consolidationthrough the Department of Education.

http://www.loanconsolidation.ed.gov/

I did it under their Income Contingent Repayment Plan, and my payment was at $0/month when I was making very little. It helped me get back into school (because now I don't have defaulted loans!) and I technically don't have to pay right now because I'm in school. Once I have a master's degree my prospects will be much better (I'm going to be a counselor) and I can pay the majority off then.

I highly recommend it! It takes about four weeks total, and if you are a US citizen you are guaranteed to be approved, even if you have no income and bad credit (which was the situation for me at the time).

[Nectarine]

Also, I should say that I'm voluntarily paying the interest (plus a little) on my loans every month so that I can keep them pretty manageable. I pay $75/month some months when I can afford it.

Good luck! Things *will* get better, you just have to have faith in yourself You've already got through the worst of it, now comes the rebuilding.

Griffin

[LynnInMN]

Without knowing what types loans the OP has,we dont even know  if consolidation is even an option.

[Nectarine]

That is a good point! I tend to sort of assume that people have federal loans, unfortunately.

[Anonymous]

With private loans, and probably federal, I highly doubt they will just "forget" the interest.