Private College Student Loan

Default Student Loan Problem-- Can they double the amount owed?

About 7 years ago, I quit going to college because I was offered a great job. I started paying on my loans and paid for several years while I worked. Then I overcame infertility issues and started having children. I decided to stay at home with them, living solely on my husbands construction income. Then the economy got bad, and work slowed for him. I had to quit paying on my loans. I should have tried to work with the banks, but instead I just quit paying the loan payments. Several years have passed and I haven't made any payments. Apparently the loan, which originated with nelnet, got sold to other collectors over the years. They all tacked on fees. The bank that owns the debt now called me to set up payment arrangements, which I am ready to arrange and fulfill. However, they are saying that I owe $20,000. The original debt was less than $10,000. It seems unfair and unreasonable that the loan could double what I originally borrowed. Aren't there laws that protect debtors and put a cap on how much the debt can grow? I mean I can't be the only person out there that borrowed money and had hard times. Do you have any experience or insight into this subject?

Public Comments

1. You fight this, you not have to take any advise, but, you learn and learn; http://www2.ed.gov/offices/OSFAP/DCS/index.html http://www.finaid.org/loans/default.phtml You talk to a Lawyer if you have to, many provide a free consultation, you fight this! You were doing right and life gave you a bad card, and Americans understand this, you Learn and you fight! You need to contact the servicing agent, the people you repaying the loan too. There is some help, one being repayment based on income. Which can be $0. Be very "SURE" you understand how this works! The loan may or may not accumulated interest. Also, you may have the option to pay interest. Sit down with your Hubby and read all this paper work together and be sure you understand. After a certain amount of years the loan can also be forgiven, but, it a long time, like the year of Jubilee or something? LOL or 25 years whichever comes first. ;-)
2. The first poster seems to be from the UK. In the US, your loan stays with you forever - it doesn't go away after a certain number of years. Please don't follow his advice. Won't work in the US. Yes, it is entirely possible that you now owe twice what you originally did. Your interest rate has gone up, you've got penalties and fees... While this may seem unfair, it simply *is*, and you'll need to deal with it. If you had worked with the banks and made payment arrangements, and if your loans had not gone into default, things would be different. But unfortunately, you didn't do that, your loans are in default, and these companies, if they wanted to, could actually refuse to work with you and demand payment in full. If they are willing to work with you and let you make payments each month, I hate to say this, but you should consider yourself lucky. They don't have to do that. Do everything you can to pay down this debt. Don't stop again, and keep paying until these are paid off, even if that means that you or your husband need to take a second, part-time job. Get this loan paid and get these people out of your hair.