My Student Loan Debt Story
I had been out of school for quite a while. I was working at a big law firm in New York City making a decent living, paying my bills and some of my debt. I had (foolishly) incurred a lot of credit card debt in my youth and I was really paying for it. I also had about $11,000 in student loan debt from a Federal Subsidized Stafford Loan I had taken out when I was in school. I wasn't making any payments on my student loan debt. In fact, I completely ignored my student loan debt, throwing all the threatening letters I received into the trash! My thinking was, "what could they do to me? If I ignore the debt the government will step in a pay it off. Besides, those monthly payments are way too high!" There was a moderate amount of guilt associated with my actions, but it's hard to feel sorry for the richest government that has ever existed on the earth.
So I was moving along with my life, happy to be slowly improving my credit rating by paying of my old credit card debt. I got a raise at work and started investing a large chunk of my paycheck into my employer's 401K plan. Yeah, things were OK and getting better. It was at this point in my life that I opened a business checking account because I had big plans of quitting my job and starting my own business. I started making small deposits to this account every week or so and soon I had over $1000 in that business account. And that's when it happened.
One day, I was performing a routine balance check on my business bank account and found that my bank account was completely empty! Shock? Horror? No, it was more than that. I nearly fainted! I immediately got on the phone with the bank to get an explanation. They informed me that my money was legally withdrawn from my account by a law firm representing the government in student loan default matters. I got the phone number for that law firm and called. They told me that they had obtained a "judgment" against me in court 3 or 4 years prior, and that they had every legal right to seize any and all money in my bank accounts. Wow. That's some serious power, eh?
So, all those threatening letters I was throwing away: I really shouldn't have done that! If I had responded to those letters, I would have been able to avoid the nightmare that I have just described. If I had contributed a little less to my 401K and made payments on my student loan, I would have avoided having my bank account emptied. And to add insult to injury, because my business bank account was empty, the bank assessed some very large and nasty fees due to lack of funds.
Hey! Learn from my mistakes! Consolidate your student loan debt and do it now while interest rates are still low. If I had consolidated my student loans years ago, I would have been able to secure a fantastic interest rate, which would have made my monthly payments far more manageable and I would have been much more inclined to keep up with my student loan payments. Furthermore, the government would not have seized my federal income tax refund year after year after year. If I had continued to ignore my student loan debt, I would have lost the $600 economic stimulus check I received last month as well. That would have hurt, a lot!
The market for money for the average consumer is the best it's been for many years. Take advantage and get a great consolidation interest rate for all your student loans. The economy will be strong again soon, and that means higher interest rates. If you don't consolidate your student loan debt now you'll probably regret it. I am not saying to go for the first student loan consolidation offer that comes your way. You should shop around for the best consolidation deal, just as you would shop around for the best mortgage or credit card deal. Nowadays, there are a plethora of organizations out there that specialize in buying student loan debt (it's obviously a very profitable thing to do these days.) All that competition is great for you, the consumer, so let the consolidation companies fight for your business. Don't settle for anything but the very best deal.
Thanks for reading and good luck!
Life Insurance with No Physical Exam
Copyright © 2009 Steve "AmCy" Brown, FedPrimerate.comTM
Student Loans - What Happens If You Default
A Highly Informative Video Clip About The Consequences of Defaulting on Your Student Loans
I want to add that defaulting on your student loan will also ruin your credit rating!
Student Loan Debt Related Links
Some Useful Links for You
- Student Loan Debt
- A blog about student loan debt and student loan consolidation.
- Student Loan Consolidation: Pros and Cons
- Here's an informative webpage with details about the pros and cons of student loan consolidation.
- 0% Credit Cards
- How are 0% credit cards useful for those with student loan debt? Well, if you student loan debt balance is low enough, you can transfer the debt to a zero percent credit card and avoid paying interest for up to 15 months. This is a trick used by money-savvy consumers here in the U.S. and in Europe.
- Student Loan Debt & Bankruptcy
- Back in 2005, the U.S. government made it very difficult to discharge student loan debt by declaring Chapter 7 or Chapter 13 bankruptcy; difficult, but not impossible. Check out this blog article for details.
Years ago, some students would graduate college then immediately declare bankruptcy in order to get out of paying their student loan debt. It only takes a few knuckleheads to ruin it for the rest of us! - 529 Savings Plans
- If you've been thinking about using a 529 savings plan to save for your child's education, read this article. It's always a good idea to consider all the facts before making a major financial decision.
- James Lockhart
- Click here to read about the James Lockhart case. Mr. Lockhart defaulted on his student loans more than 20 years ago, but the government has decided to garnish Mr. Lockhart's meager social security benefits now, even though he is past retirement age and is in failing health. the case went all the way to the U.S. Supreme Court, and Mr. Lockhart lost.
- Student Loan Debt & Foster Care
- Check out this article about how student loan debt is crippling the lawyers who try their best to help foster kids.
- LIBOR
- Some student loans are indexed to the London Interbank Offered Rate (LIBOR). Here's a link to a page that lists the current LIBOR rates.
- Prime Rate
- Some student loans are indexed to the United States Prime Rate. This site (link) is the most comprehensive Prime Rate website on the Internet.
- Student Loan Consolidation FAQ
- An informative, frequently asked questions (FAQ) page about student loan debt and student loan consolidation.
- Paying Off Student Loans
- Thinking about paying off your student loans? Who can blame you. The payments (and interest) are burdensome and can cause serious financial problems for e.g. the recently unemployed or young folks just starting out. Check out this blog post before you take the plunge!
- Debt Blog
- Here's an interesting collaborative debt blog. Good posts. Feel like contributing? Contact the webmaster and start blogging.
- LIBOR News
- News about the 1-, 3- 6- and 12-month U.S. dollar (Eurodollar) LIBOR yields, along with the latest TED spread figure.
- Car Insurance
- The car insurance blog
- Debt Help Website Sitemap
- Sitemap for the Debt Help website.
- Personal Finance
- A Squidoo.com lens about financial health.
- Wall Street Journal Subscription
- Use this discount link to subscribe to The Wall Street Journal and get up to 80% off! This coupon link is provided with compliments by the FedPrimeRate.com website. Enjoy!
- Make Cheap Long Distance Calls On The Internet
- Make cheap phone calls on the Internet with voice over Internet protocol (VOIP) technology.
Student Loan Debt News
A News Feed About Student Loan Debt in The United States
Fetching RSS feed... please stand byDebt Blog
A Great Feed from The Collaborative Debt Blog
A group of bloggers have joined forces at www.DebtHelp.tv. They blog about debt and personal finance. The articles are intimate and contain lots of fascinating details. Highly recommended!
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Add Your Comments to This Lens
All questions and comments are welcome. Thanks much for stopping by.
Debt Help wrote
Debt Settlement has help many across the country eliminate their debt. No wonder it is one of the most sought after debt relief programs.
http://bedebtfreenow.org
Posted October 14, 2009
fedhughes wrote...
wow, it is good to know the consequences that you will face if you default your student loans. Found your account empty and the government has the right to take your money out of your account is really scary. Thanks for the great info, so be sure to pay ooff your student loans.
Posted September 20, 2009
AntionetteTate wrote...
I have a forebearance on my student loans but it is nearing the time for me to pay. I am actaully researching ways to have my student loan forgiven. I am aware that if you have worked on certain jobs, the government will fogive a percentage of your student loans. Thanks for sharing
Posted September 17, 2009
Joe E wrote
Great information for students and graduates. Student loan consolidation can get a bit confusing at times - especially since rules and regulations are constantly changing! Consolidating student loans can save money for some, but it's not always the best option. It's so important for students/graduates to stay informed and to "do their homework" before consolidating.
Posted September 14, 2009
sethhahn wrote...
Ouch... thanks for the warnings on student loan defaulting!
Great lens.
I started a blog on safe, healthy ways to reduce credit debt.
To our collective financial freedom,
Seth
Posted April 30, 2009
Cluadia Easy Loan Company wrote
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Regards,
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Posted April 29, 2009
spycraft wrote...
There are some really interesting points in this lens! Everybody needs to read cautiously.. especially in this economy. Thanks!!
Posted April 21, 2009
UKDomains wrote...
This is such an interesting story! I never knew this could happen! I'm glad I never had student debt, as I think it can sometimes take a long time to pay off.
Posted April 17, 2009
edprobudi wrote...
Nice info about student loans. This is very useful indeed, especially for students, whether those who have been using student loans or thinking of getting a student loans. Very informative indeed. Thanks for sharing it with us.
Posted April 13, 2009
cowboyrob wrote...
Great read. This is great research for me, seeing as I am in college right now with 2 federal student loans financing my education each semester. It's tough to swallow that I will leave college with loads of debt, but I know for sure that I need to pay it off on time to avoid any horror stories!
Posted April 13, 2009
alinc wrote...
thanks for the information ,
good information for me and other who want loan debt for study
Posted April 13, 2009
nosehead wrote...
Man, I didn't know that neglecting my student loan can hurt my credit rating!
Posted April 09, 2009
bedebah wrote
great. thanks
Posted April 09, 2009
egoist wrote
Very interesting. Thanks for information.
Posted April 09, 2009
turnhardtoeasy wrote...
you have got some really interesting info dude...
keep up the good work...
cheers... !
Posted April 09, 2009
turnhardtoeasy wrote...
you have got some really interesting info dude...
keep up the good work...
cheers... !
Posted April 09, 2009
turnhardtoeasy wrote...
you have got some really interesting info dude...
keep up the good work...
cheers... !
Posted April 09, 2009
John Panas wrote
You have a great site, I appreciated your story about loan default. I can see I will have to help my daughter out with her loan so that her credit rating.is not destroyed. If you get a chance check out my student debt)blog.
Posted February 04, 2009
mbusa wrote...
This is by far the most eye opening story I've ever read related to student loan debt. Thanks for having the courage to share your story with the world. 5 stars!
Posted November 06, 2008
netgeek69 wrote...
the information which you have given about student is really very helpful, and as am being a student i have come across many things which i dont know thanks for the information
Posted November 04, 2008
Elizabeth Pou wrote
The entrance counseling for the loans stresses that you have to pay the student loan back or they will take it from your assets. It's really scary to have that done to you. The consolidation resources are going to help me because I'm in the process of consolidating my loans. If you get a chance check out my Paying Student Loans Blog!
Posted October 08, 2008
Elizabeth Pou wrote
Love the lens - I like that you tell your story about not paying student loans. I really could use the different resources on consolidation of student loans. People can really relate to what happen to you and I think it's inspiring how you turn things around. If you get a chance check out my Paying Student Loans Blog.
Posted October 08, 2008
swvisions wrote...
All very interesting information. Didn't realize they could tap your bank account if you owed a student loan. I know a few people who also got their tax rebate checks withheld over student loan debt. Definitely worth paying off as soon as you can.
Posted July 23, 2008
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