Hi, I just got a call today from someone at California Student Aid - she said my defaulted loan will be garnished unless I call them and make payment arangements. She was even so nice as to give me a number to chat with one of her associates. Well this isn't just another situation of a student going to school and then deciding not to pay - the great school I attended closed up and disappeared(after I left). While I was attending, they all of a sudden told me I could no longer come to class because I wasn't paying my tuition (It should have been in deferment while I was attending - I had no idea at the time) So I was forced to quit the school after one year. Two years later I find out the school closed and has no records whatsoever. At this point I have no credits from them and the guarantor wants me to pay the full price of tuition. I'M VERY SICK AND VERY WORRIED!!!!
Contact the Dept of Ed. Ombudsman's Office for student loans and explain your situation. Under the HEA, there are scenarios where student loans are forgiven when then school they were attending closes. You may want to check into that. Good luck. fla-tan
#1. They cannot threaten to garnish wages without the intent to do so and can only do so AFTER they obtain a judgment. #2. I would write them and ask for a payment plan. #3. Student loans don't go away. You are going to have to pay this. The earlier you make arrangements, the easier it will be on you and your credit. I would calculate 33% of my net (the most they can take). Then make payment arrangements. My original student loan wanted an outrageous payoff amount and schedule. I could NEVER have paid it like that. I figured out that the most they could garnish was XXX. I told them that they could waste their time and money taking me to court and the most the judge would allow is xxx. I will start paying yyy now. (yyy being slightly less than xxx) They agreed to it.
fla-tan is correct. You can be forgiven is cases where the school closes. Make sure to look into this before setting up any payment plans...
Sal, 1. I'd get an Ombudsman specialist asap. I would ask them if they can at least "stay" the garnishement until they are able to resolve whether you owe the money or not given the school's circumstances. 2. I'd also get a really GOOD student loan atty. to get the garnishement stayed until the issue is resolved. 3. I'd scale up and up and up to the manager of the guarantee agency and explain and explain what went on with the school. Write the president of the guarantee office if possible - including all correspondence with the Ombudsman's office and any info from the HEA pertaining to closed schools. 4. If worse comes to worse and all of the above determine that you owe the money - make three voluntary (not garnished) payments to the guarantor for consolidation to Direct Loans or sign a good faith rehab agreement and put the loans into rehabilitation. If the Ombudsman office doesn't want to help, I'd get an attorney asap before I'd let them take my money.
Your situation may definitely fit in the category of having your loans forgiven because your school closed. This should be the very first thing you look into. Do not call the guarantor. Put everything in writing. As far as I know, CSAC must notify you in writing that they intend to begin wage garnishment. You will then have X # of days to request a hearing. 4. A judgment is not required to garnish wages in the case of a student loan default. If you do end up having to re-pay, do NOT consolidate until you've researched every facet of your particular situation. Consolidated loans cannot be rehabilitated, and rehabilitation offers some benefits you cannot get from consolidation - particularly with regard to credit issues. After you have rehabbed your loans, if that is what you ultimately end up doing, then you can consolidate to obtain a lower interest rate. Remember, all student loan guarantors, CSAC/EdFund included, are just like all other collection agencies. Put everything in writing.
sal, we discussed this earlier this year! what have you done... did you contact the dept of education... did you gather all the documentation on school closing?
