U.S. Stepping Up Enforcement on Delinquent Student Loans

[Anonymous]

"....Key Insights:
The Treasury Department may withhold federal income tax refunds, Social Security payments (including Social Security disability benefits) and more
State tax refunds may be also withheld and applied toward repayment of a loan

State drivers licenses or other state-issued licenses may be confiscated

A borrower's employer may be ordered to withhold up to 15% of disposable pay to collect defaulted debt without a court hearing

Withholding ``garnishment'' continues until a defaulted loan is paid in full or removed from default

Costs associated with collecting defaulted federal student loans, including the cost of placing a loan with a private collection agency, can also be added to the balance due

Collection costs such as processing fees and costs associated with potential civil litigation can also be added."

https://www.bloomberg.com/amp/news/articles/2019-05-12/u-s-stepping-up-enforcement-on-delinquent-stu...

[Anonymous]

A lot of people got a shock when their tax refunds were used for an offset this year.  I hear it was a record year.  It left a lot of people in a bad place.  I personally think if banks got a bail out, the American people deserve one. 

[Anonymous]

Social Security and Disability are lifelines for most of the people who receive them.
Going after the most vulnerable is not smart as they will simply have to rely on other government aid which will cost more in the end.

[Anonymous]

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@Anonymous wrote:
Social Security and Disability are lifelines for most of the people who receive them.
Going after the most vulnerable is not smart as they will simply have to rely on other government aid which will cost more in the end.

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Totally agree!  If someone is on SSD, that should be an automatic forgiveness. 

[Shooting-For-800]

Student loans payments are based on income.  No real excuse for not making arrangements to pay.

[Anonymous]

No, actually the payments are not.
They can be, if you know to sign up for it.
Students are by automatically put on the standard repayment plans. Then when servicers find out they are having problems paying they put them on a deferments or forbearance. Not to mention servicer errors (that I have experienced myself multiple times) that try to put people in default through no fault of their own.
It is estimated that by 2023 40% of borrowers will be in default.
There has been a lot of talk that students should be put on Income-driven repayment plans automatically after graduation but so far lawmakers are content to let youth "figure it out" by themselves...or more likely fail to do so.
Did you know they are taking away people's professional for getting behind in paying student loans? How are you expected to pay with no job?
The problem with student loans is that the system almost sets people up to fail.

[calyx]

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@Anonymous wrote:
No, actually the payments are not.
They can be, if you know to sign up for it.
Students are by automatically put on the standard repayment plans. Then when servicers find out they are having problems paying they put them on a deferments or forbearance. Not to mention servicer errors (that I have experienced myself multiple times) that try to put people in default through no fault of their own.
It is estimated that by 2023 40% of borrowers will be in default.
There has been a lot of talk that students should be put on Income-driven repayment plans automatically after graduation but so far lawmakers are content to let youth "figure it out" by themselves...or more likely fail to do so.
Did you know they are taking away people's professional for getting behind in paying student loans? How are you expected to pay with no job?
The problem with student loans is that the system almost sets people up to fail.

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^ Especially the bolded part.
I had student loans, I couldn't afford the payment, and I called.  They put me on deferments.  
At one point, my servicer changed without warning (to me), and I was never contacted.  I defaulted, which I didn't know until after I was garnished.

On one hand, sure, I'm an adult who should have educated myself, but on the other - it wasn't easy to find out about IBR payment plans.  Servicers, who really should be helpful and a primary source of information, are not.  Servicers are not held to any kind of reasonable standard when it comes to making errors with loans, either.   It's fine if they mess up, because they won't be harmed, they can still garnish.

The system is set up for failure, and then somehow the people it fails end up getting the blame.  Nearly everyone I know who has had SL problems never intended to *not* pay back their loans, it's just a difficult system to navigate.    When you add on the predatory tactics to those with fewer resources, it becomes especially cruel.

[Anonymous]

I'm all for brain storming ways to change the system but there needs to be more Brains and less Storming.
Someone attends school, gets student loans and then gets diagnosed with cancer and goes on disability (not far-fetched), the disability assistance should be a lifeline to help meet minimum living standards and then have THAT garnished?

Taxes? I'm fine with because not getting a refund does not necessarily come down to life or death. But, Disability income, Social Security income? No bueno.
Recouping student loans should not involve taking away people's basic needs.

[Shooting-For-800]

I am sorry if you went to college and don’t know how to contact your student loan provider to get your payments reduced or put in forbearance or outright forgiven.

Of course, people in real need should get help; it IS available.

A I willing to bet that a majority on people in defuault are not disabled.