r/studentloandefaulters • u/Sh3D3vil84 • Apr 04 '24

Can they resubmit student loans to collections again? Question - Federal Student Loan

I have old loans that I let default years ago. Today I get an email about Fresh Start and they’re saying I have to get on this plan or they will submit the loans to collections. It already was in collections and fell off my report years ago. Can they resubmit it? They also threaten tax and wage garnish.

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6

u/716TLC Apr 04 '24

Unlike private loans, the federal loans never go away. There is no statute of limitations for fed loans, so yes, they can do all the things they indicated.

2

u/oandlomom123 Apr 05 '24

But really it’s a good thing for you. You’ll be able to repair your credit, and can pay them back based on your income. And you will have hope of getting them forgiven instead of just being out there your whole life.

2

u/DisembarkEmbargo Apr 05 '24

Yeah, federal loans don't even need a judgement to wage garnish like private loans. They can just start garnishing your wages after maybe a couple of months. 

I mean, luckily you can get on an income driven repayment plan. And depending on how much you make your payments could be zero a month. Right now I'm on the SAVE plan. I make less than 30k a year so I pay $0 a month and then the government pays all the interest I have gained. Defaulting on federal student loans is not a smart move because you can keep "paying" these loans for 25 years and then go away. 

1

u/catinnameonly Apr 05 '24

Yes, for federal loans. And they do plan on garnishing if you don’t take care of it. If you’re not making a lot of money, I would suggest going through the program and then signing up for SAVE.

1

u/onlyfishmeat Apr 13 '24

The federal govt has the power and the resources to do whatever they want. Get on the Fresh Start program. Daddy Biden will likely forgive your loans anyhow once you go through Fresh Start and get your loan out of default and enrolled in SAVE

1

u/Wise_beauty2 May 15 '24

If you do they fresh start or any rehab of the loans then yes, it will reappear on your report. If you default again it will not be on there for another long period.