February 6, 2014

How Can I Deal With My Private Student Loans?

I am currently only employed as a contracting social worker and make about 2,000 a month from which I pay about 700 in rent, 200 in miscellaneous bills, 400 in federal student loans and have an additional 33,000 dollars in private student loan debt which is now in collections.

What is my best option to deal with with 33,000 private student loan in collections? I'm finding it really difficult to make ends meet as it is. Any suggestions would be greatly appreciated! Thank you in advance for any assistance.

Yea, never let it be said social workers are overpaid. Frankly it must be an occupation of love because I just don't know how social workers make ends meet.

If you have not looked into the Public Service Loan Forgiveness program for your federal loans, you should. As a social worker you may be eligible to have those loans fully forgiven after ten years. As you can imagine there are some very specific rules. You can click here to learn more.

And even if you eventually turn out to not be eligible for that program you should look into an Income Based Repayment program for your federal loans to make more room in your budget. Click here for more info. Your payment could be as low as $0 per month on an IBR program.

In an ironically funny way the other day I answered a reader question about private loans and someone commented I had not provided much help because I didn't list a bunch of options. But that's the problem. The reality is there just are not many good options for dealing with private student loans. They are not part of the federal loan programs and private student lenders are not required to make any allowances at all. If they do, that is their own choice.

Even the Consumer Financial Protection Bureau says, "Unlike federal student loans, there are no standard options for dealing with a creditor or a collection agency on a defaulted private student loan, other than paying what is owed. However, you may be able to negotiate or set up a payment plan. You may also have the opportunity to settle your debt for less than you currently owe."

The limited ways of dealing with private student loans are to negotiate with the lender, see if you are eligible for a private student loan bankruptcy discharge (it is possible in many cases), or default on the loans and deal with collections and risk getting sued and your wages garnished with a hope to settle the debt.

Just beware, there are many new student loan assistance scams springing up claiming they can magically make your loans vanish. Before you leap for such a sales pitch make sure you absolutely read this.

www.huffingtonpost.com

The above statements do not represent those of Weston Legal or Michael Weston and they have not been reviewed for accuracy. The statements have been published by a third party and are being linked to by our website only because they contain information relating to debt. Nothing in this article should be construed as legal advice given by Weston Legal or Michael Weston. To view the source of the article, please following the link to the website that published the article. Articles written by Michael W. Weston can be viewed here: To report any problem with this article please email studentloan@westonlegal.com