Comments on: What happens to Federal Student Loan Debt if not paid?

By: spalmer

spalmer — Tue, 02 Mar 2010 01:25:42 +0000

Amaretta gave a great answer. Has your friend applied for any of the optional payment plans available for federal loans? There’s an income-based repayment plan that is based off of your income… she may have a $0/month payment. It’s based on a 30-year repayment plan and then any unpaid amount (assuming she doesn’t default) is wiped clean. However, if your friend has already defaulted on a federal loan then she won’t qualify for this program… it’s worth her checking into.

By: Jules

Jules — Tue, 02 Mar 2010 01:25:42 +0000

SHE WILL GO TO HELL!!!!!!

By: Amaretta

Amaretta — Tue, 02 Mar 2010 01:25:42 +0000

If she defaults on her loans, then she’ll be assessed interest and penalities on the unpaid loans and she’ll owe even more money. The government can garnish her salary, take her tax refunds (if she ever files her taxes) and eventually even her Social Security. If they find out that she hasn’t paid her taxes, then she’ll be assessed interest and penalties on her unpaid taxes, so she’ll owe even more then and she could end up in jail. If she owes a lot of money, she should look into a loan forgiveness program (google — "loan forgiveness"). She can work at certain careers and in certain locations for 10 years and then have the remainder of her student loans dismissed.