Question about student lou-ans
 

My girl is getting her tax refund intercepted because she defaulted on her student loans from 3 years ago. I get that, she should have paid it. But the letter she received lists what she owes as follows:

Principal: $6954.39

Interest: $957.52

Penalty: $0

Fees and Cost: $1925.76

Total: $9837.67

I understand the interest, but how do they come up with the "fees and cost" @ almost 2 G's? It doesn't say what they're for. She's tried calling them twice to get a detailed assessment of how they came up with that number but they still haven't sent anything after three weeks. Something else strange is where it is supposed to show her account number is blank. Does this sound fishy to anyone else or is this completely normal?

If it makes a difference her lender is "Direct Loans" through the US Department of Education.

Sounds like she's screwed.

The type of loan would be useful in determine a proper response.

Is it covering everything that she owes?

All you have to do is either call the IRS or Direct Loans and see if it's been paid off. They aren't going to tell you what the "fees" are for. Consider it a lesson learned and move on.

^3 posts all at the same time, that's funny. I have never had issues with Direct Loans. My wife has a loan that we owe ~9k on, and I have never had an issue with her account number not being on it. Then again, we are paid ahead like 3 years (we are just trying to get it done as quickly as possible).

I don't know what the default fees are for direct government loans, but I know my private loans have a default fee of 50% of the balance at the time of default.

She might be able to speak to the lender and get the fee reduced if she agrees to a payment plan and sticks with it.

No her tax return is only enough to cover about half of it. So they can just come up with any amount they want, call it "fees", and you have to pay it? Sounds like a scam to me. How can anyone charge you almost $2000 in "fees" and not have to tell you what they're for?

She defaulted. They could put that $2000 into "penalties" and you wouldn't be able to say shit.

I'm guessing the fees are for having to track down their money.

Stafford loans all have a fee assessed on them. For loans prior to 2007 this was 3%.

Since she didn't bother paying back her loan and is now in default, it all becomes payable immediately including interest, late fees, penalties, and whatever fees they want to assess related to the collections process, if it's gone to collections.

She could have 15% of her wages garnished or other legal issues if the process drags on long enough.

There's no reason to default on them because you can call up the servicer and ask for a forebearance or a deferment anytime you want to, and even if you cocked that up, you can call and ask about loan rehabilitation where you agree to a repayment plan and they bring you out of default.

Crazy. Ive never missed or even been late on a loan or any other bill in my life so this is all new to me.

Student loans are the absolute worst loan to default on. The government will take all necessary steps to get their money back....and they WILL NOT go away.

She's ****ed. If you default on a student loan, you're pretty much going to pay whatever they are asking you to. It's not the sort of debt that goes away or she's going to be able to "fight" in any capacity.

Listen to Pest, he knows what's up.

Maybe... defaulting on a credit card debt might be worse, because they'll sell it to a scum sucking vermin debt buyer who will harass and sue you.

Where is the paperwork she signed when she gladly accepted that money that she didn't intend to pay back.

I'll bet you anything that the paperwork will outline what fees are required.

It sucks to have turned $7,000 into $10,000 by not making minimum payments. That's a pretty high interest rate. But instead of arguing with them, which will get her nowhere, have her call and ask what her options are. The government is going to get their pound of flesh out of her. It's not going to go away.

Probably. She's ****ed. I don't understand how people can be so stupid. She is horrible with $, drives me ****ing crazy. :banghead:

Red flag

Credit card debt will eventually go away. Yeah you'll be harassed by phone calls from collectors. The government won't go away....they'll just start garnishing everything you have until they get theirs.

Call them..... They will work with you all.

Also, you can't discharge student loan debt in bankruptcy anymore. They will just keep coming. If she gets a judgment against her they could dip into her bank accounts too. It's probably all avoidable if you just talk to them and work something out.

Lock her down..... y'all seem like a solid match.

Hey, at least it's not your money...


...yet


:D

Were you going to use that money for your future mother-in-law's smoking closet?

**** her. She may learn a lesson. Cry to somebody who gives a shit.

I have no idea, but I'm going to say for sure it's Obama.

I would get out of this relationship now.
Unless that's her in your avatar. Then, I might see how this whole loan thing plays out for a while.

effing obama

Its not, but she's close. Ive posted pics of her before.

:homer:

Have her call. Negotiate lower fee amount. Tell them they can use the tax check and set up payment plan for future.

I take it her degree isn't in finance?

If it's gotten to the point that they are garnishing wages, I'm pretty sure that $2k is legal fees.

My wife had a loan through Direct Loans before, but the servicer was Educap. I have one now and it's FedLoan Servicing. Find out who the actual servicer is. It is possible that it is Direct Loans.

We defaulted on her loan back in the day. It went to court and all that had to be done before they could start garnishing anything. I'm betting that's where a lot of the fees come from.

Her wages were never garnished, they're just taking her tax return. She said she'd call but the way she procrastinates it probably wont happen until they tack on another couple grand. :shake:

Those fees are probably where they have handed or sold the bad debt to a collection agency

I'd betcha those fees are at least partially, if not completely because they hired a collection agency to bust some heads. You are fighting an impossible fight here.

This is like Chiefs vs Colts at this point, just have her call.

Been defaulted for 3 years?

That's a lot of money for beauty school.

Do any parents not pay for kids college any more?

Student loans are going to get paid.

You should take her to Chuck E. Cheese and see if she can find some other boyfriend so you no longer have to worry about it.

9 / 10 pooties

Would read again

Dunno. She looked pretty hot.

Statute of Limitations on collecting on consumer debt varies by state, but Government loans have no limitations. And debt collectors can't call you after the SOL goes by. If they do all you have to do is report them.

That's why it is top of the list to pay your student loans. The government never goes away.