I hate to openly talk about things like this, but honestly there are shoulder that people can hit their backs on. For example, I have an XM radio subscription in collections that I never signed up for their services (I assume the reseller sent me automatically or I did not read the contract carefully). Student loans on the other hand would be regarded as something we should not take easily. This article is about ordinary student loans and what you should understand as a borrower.
What can happen if my loan is common?
Have you been behind your student loan? Your phone is likely to blow up as crazy. If your loans are common, the government will start a full-scale over-phone override. Their watchdogs will hound you, and these types of phone calls can get quite intense. When I say watchdogs, I refer to the collection agencies "service" your loans. The agency does all the dirty work for the big dog (Dept. of Ed). Since the government issues student loans as a free trial of COSTCO on Sundays, it would be unethical for them to collect directly on these student loans. That is precisely why the debt collection agencies are involved. The collectors will call and call, and when you think it will end, they will call again. They will even go as far as contacting your family, remember or friends. Lawfully, they can contact your "references" as long as they think there is a way to contact you.
If you make pretty good money it is possible that a trial will be filed. Because you have a valid debt, and you owed the money, you become less defensive.
If you let this sound long enough, you will handle a bigger problem, payrolling. Your employer is legally required to take part of your paycheck and send this amount as "involuntary" payment.
Remember, "involuntary" payments do not count towards any form of formal program. Of course, the money will be applied to your account, but not assigned to your service. Keep in mind that you have a student loan amount. 80% of your payment will be against interest and 20% will be charged against the collection fee (collection fee can be waived if you play your cards correctly). The sad thing is that the amount of garnishment is much higher than "voluntary" payment programs.
It's hard when you have to say goodbye to your FULL paychecks, but just when you come through grief and you start enjoying your life again, another friend called TAX RETURN will resign. The government does not care about the extras of your life, and as long as you are just above the poverty level, they are constantly raping your paychecks and returns. They will turn the village upside down until your loan is paid in full.
Often people are assuming that the federal loan will only fall out of its credit report. But it is a total misconception, federal loans have no "statue of limitation". This means that your student loan will be shackled to you as long as you live. The good news is unlike "time-shares", these student loans will not be passed on to your children when you leave this world.
There are options for people who are common, but the strange thing is that nobody talks about them. There are debt relief programs out there that allow people to make reasonable payments based on their income as opposed to payments based on balance. There are programs designed to take your loans as default with minimal payments. If you do it right, you can rehabilitate your loans, stop the garnish (tax), tax settlements, fix your credit and get the fees for the collection fee. The information is out there, but sadness is that the people in our country decided not to do their homework.
My advice to someone with regular loans: Invest your time and money at the right place, and research, research, research! Do not waste your money on lawyers and debt relief companies, as they historically can not help them, they just want your money. So with that said, do it yourself!