Would the government settle my student loan for a discounted payoff?
by Mortgage Rates on Thursday, October 21st, 2010 | 4 Comments
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No the federal government will not take your offer to pay less than what you borrowed.
Think about it, they have no incentive to do so whatsoever. Student loans are federally backed, meaning (among other things) that no matter what you do (or don’t do) they are guaranteed to (eventually) get the entire amount you borrowed plus interest back… even if you do not pay on it willingly. They can (and will) garnish your wages, seize your income tax returns and even take your social security when you are old and gray….
There will be no harm or risk to your credit score because there is no deal to be made. To save you money in interest, you can just pay the entire balance off as quickly as possible.
There’s a couple of awesome information on exactly this. see all of the information here – http://www.loanguide.tk
education.mypressonline.com – it provides some tips about applying to US federal and state grants for college students.
Unlike other lenders, the federal government does not ‘settle’ on monies owed.
While the do have loan forgiveness for extreme hardships (death, medically disabled) it doesn’t sound like you’d qualify.
Any time you settle a debt it hits your credit and hits it hard – anywhere between 30-100 points or more.