Can anybody tell me if defaulted student loans disappear after a certain amount of time? I have a loan that is over ten years old and until a few months ago had not heard much about it. and all of a sudden I have 3 collectors trying to hit me for different amounts. I have been ignoring the collection agencies thinking that they are playing games and trying to reactivate old debt. but am concerned that they screw up my semi decent rating at the moment. any advice? thanks.
My student loans are ten years old and I've just started getting collection calls for the first time. My most recent credit reports also show student loans in collections. This was just added to my credit report in May of this year. I've been stalling until I get my master's in June and start my new career. The calls, however, are persistent.
First, the negative information from a defaulted student loan can stay on your report indefinately; however, it rarely does. You probably could even dispute it and make it go away--on paper. Unfortunately, reality is a different story! The agency who has guaranteed your student loan is probably Sallie Mae, which is a government-subsidized loan guarantor. I promise you, they are NOT bullshitting you with their collection tactics. They WILL collect from you, and they will stop at nothing to do it. It doesn't work the same way as the collection attempts on a delinquent credit card. Taking your income tax refunds and garnishing a large percent your wages are the easiest means by which they will collect from you. If you still have a chance to recover your student loans, I suggest you do it at once. Check out the Department of Education's website at www.ed.gov to get whatever information you need. If the loan is officially defaulted, the amount you WILL pay back through involuntary collection measures can be almost double what you borrowed. For many, having a large portion their wages garnished through their employer can be embarrassing. Especially when your colleagues are aware of what's going on. They are required by law to comply with the garnishment, and their failure to comply is a criminal offense. Handle it NOW! It WILL NOT go away, there is NO statute of limitations, and they DON'T play around. As long as you are in the country, they will find you very easily. The out-of-sight-is-out-of-mind rule DOES NOT apply here.
The collection charges on my student loan are nearly $6000 on a $9000 loan. It's ten years old and I hadn't heard a word about it until last April. I don't quite understand why the huge collection charges, but you're right, Doris - this is never going away and it gets more expensive every day I delay repayment.
Sweetie, you need to find out how to handle this one ASAP. Otherwise, when you least expect it, it will get nasty, and you'll be hit harder than you ever thought possible.
Believe me, Doris is right . . I ignored mine for several years and I have almost $10,000 in collection costs plus 9% interest caculated daily! I finally got into negotiations with the collection agency to rehabilitate my account. Info on this can be found at the above mentioned web site. After the rehab is issued the loan goes back to the origianal issuer. BUT, it is a one time only chance so if you screw it up you're sol. I would suggest doing ANY contact with the agency in writing - that way you have everything on paper in case they try to pull a fast one. But they will get the money, whether by garnishing your wages or seizing your tax return. And almost no one will lend you money with a defaulted student loan on your CBR.
