I'm sixty-six years old, retired, and spending a very large chunk of my very limited income toward paying off my student loans.
I know some of the penalties that come with SL default: wage garnishment, lowered credit rating, withheld transcripts and so on. None of these would make the slightest difference to me, as my only income is my tiny teachers' pension and Social Security, and they can keep my bloody transcripts.
Just for the sake of argument, would it make any sense at all to just close the account from which the student loans are debited, and ignore all the threatening messages that would follow?
Posted by Fine-Froyo-3817
11 Comments
This is a question for a lawyer, as none of us should give you legal advice on here.
All I can say is that your reasoning seems sound, but there could be other consequences you haven’t considered.
There’s also the steep collection costs. Could IDR forgiveness be a path for you especially with your limited income?
How much do you owe? What are your payments? and are these federal or private loans?
See if you qualify for income based repayment.
Well, if they’re Federal loans they can garnish your social security: https://studentaid.gov/manage-loans/default/collections/
You should consider an income driven plan.
I don’t know much about federal student loan enforced collection action, but I work in tax resolution so I know the IRS collection tactics pretty well. The IRS will send out letters to the banks in your area to find what institution you bank with, and can levy you that way. I imagine they have the same tools at their disposal. So I’m not sure just closing the bank account will get you around it.
They can garnish your SS checks. If private loans they can get a court ordered garnishment. Can you file for bankruptcy? Being in your 60s with limited income and low earning potential due to age, it is possible they could be discharged in bankruptcy. It’s at least worth looking in to
Federal student loans can garnish social security checks and tax refunds.
I have seen a handful of legit articles lately that say that there’s an 80%+ rate of success for people who declare bankruptcy and get their student loan discharged that way.
You could always just take a community college course under a degree program and that sets the repayment until your graduation date. Then either drop the class or take it, whatever you want to do. Then take a semester or two off and rinse repeat until death
Have you tried forbearance?