Okay, here is a question brought up by a friend with student loan problems... Original loans were taken out in the early 1970's (yes 1970) Original amount approximately $3500.00 1977 -Loans went into default in, no payments ever made 1987 default judgment obtained by guarantee agency (NYSHESC) ,no payments ever made 11/2002 friend is contacted at his job! by the NYSHESC, and told that if he doesn't start making payments they will garnishee his salary. Amount now due approximately $14,000 1/2003 He was able to arrange for "rehabilitation" of this loan, and began making minimal monthly payments ($75). NYSHESC took his federal income tax refund of $4500 so the balance on the "loan" is now about $9000. The question is what exactly is the status of this "loan"? Since it has already been reduced to judgment it's no longer a closed end contract. What will happen after 12 months of timely payments? He does not want anything on his credit report concerning these loans (anything derog that was on there has L o o o n g since dropped off!) Does he just continue making payments, or will the NYSHESC turn his loan over to another "servicer" who might start reporting? Thanks
Since it sounds like a government backed loan then most likely it's open for collection until you die. Student loans are like selling your soul to the devil. I would ask for a copy of the original prommissory note to see what the terms are.
