As someone in default, allow me to edify you and your readers on reality. I left grad school with $38,000 in debt with an advanced degree in social work. As a result of family illness, tragedy and low paying entry level jobs, I found myself in the unfortunate situation of financial ruin.
Fast forward several years. I finally dug myself out of a hole and began the task of righting my debts. Most creditors were more than happy to work with me. That is with the exception of those charged with collecting my student loan debt.
In addition to finding that my debt had alreay exploded to well over double its original amount, the collection agency was unwilling to negotiate any kind of terms that I was able to honor. They opted instead to impose a garnishment on my pay which they are able to do without any due process at all. By the time I was even advised of a rehab option the balance had exploded even further.
I would love to rehab my loan, but the simple math of doing so at this point is quite prohibitive.
I am 50 years old. Even if I could negotiate an amount that I could manage for the rehab process (which I have been unable to do), I would then be faced with signing a new promissory note with the following terms. My balance has increased to over $100,000. Providing someone would purchase my note ( which is currently in question), and assuming I took a 25 year term with monthly payments anywhere from $600 -$800, by the time I payed off my loan I would have payed between $180.000 and $240,000 for a $38,000 loan.
While that may be a mighty nice return for the lenders, I would have to be pretty foolish to willingly agree to this arrangement. By the way, I would be 75 years old by the time I finished paying.
The reality is that student loans have clearly emerged as the most predatory loan instrument in U.S. history. Positively no other loan instrument I know of would even allow, under law, the scenario I have provided.
Make no mistake, my situation is far from unique. Aprox. 1 in 3 will be forced into default over the course of repayment. Student loans are the only kind of loan essentially void of all consumer protections that prevent borrowers from being exploited in the manner that I have described.
So thanks for trying to help, but please- going forward - tell the whole story.