Very Serious Family Situation: A Friend of Mine- Student Loan Default?!

Paying for College
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<p>Hey Guys, </p>

<p>I truly need someone to try and assist me in learning of how I can at least try to help a friend of mine out. </p>

<p>Long story short, this is a friend of mine who graduated a bit over three years ago. I am a math geek and started things off at college more than a couple of semesters ahead in math class, if you will, and that is how we because friends.</p>

<p>He has been helping his ill mother (who I would safely assume is on disability if not Social Security) in exchange for room and board and his older brother (who works full time at a professional job that he just quite can't quit) also assists everyone in paying the bills. </p>

<p>He has, to the best of my knowledge, exausted all of his forbearances and deferments on his student loans. I am also pretty sure that he has all Direct Loans and not the private loans. </p>

<p>What is this poor guy to do? He told me that he is already 16 days behind and therefore in default. He has exhausted everything one can do. His mother is quite ill with diabetes in a very bad way. This is someone who is truly trying to be a dutiful son in the here and now.</p>

<p>What I do not understand is that I would assume that he could give the IBR a shot. But, I wonder if anyone would believe that he graduated college and has literally lived with scarcely any money in order to care for his own ill mother. With the IBR is it not a matter of income? And, if one has no income, then...? I mean, I just do not know. I looked up something about an Omnibusman and that information pertained to making "X" amount of payments and then something else, but this fellow has no income. None. </p>

<p>Is there anyone who would know what to do? I know for sure how this fellow is living and I reserve judgment because here in Memphis, TN we have one of the highest unemployment rates in the nation and a ton of poverty, so there is no true way this fellow could get a job during a graveyard shift or something overnight. But, it is a heartbreaking situation all the same, because his family unit is tight. You know what I mean? It is tight. </p>

<p>If there is anyone who would know what one is to do if they are disallowed from any more forebearances or deferment, then please let me know so I can pass the information along. I really do not know much of these things, but this whole situation is really heartbreaking.</p>

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<p>How long had he been in forbearance…had he really used up his maximum eligibility? Are his loans consolidated? I don’t know if being in default will disqualify him from other programs, like IBR or a hardship deferral, but it might. There’s some info on finaid.org that may be helpful:</p>

<p>[FinAid</a> | Loans | Trouble Repaying Debt](<a href=“http://www.finaid.org/loans/troublerepayingdebt.phtml]FinAid”>http://www.finaid.org/loans/troublerepayingdebt.phtml)</p>

<p>Do you know the level/type of loans he has? I think the best solution would be for him to get at least a part time (hopefully professional) job that will pay a substantial portion of his monthly debt. Otherwise, the situation will end up with him being buried in a mountain of debt with no regular work experience to compete for a decent paying job! It doesn’t sound like his mom needs 24 hour care right now, but even so perhaps another family member, friend, or neighbor could take turns sitting with her. My sister and I managed to cobble together coverage for my mom (who could not be left unattended) for several years so that she could remain in her own home. We were also working and raising families of our own. It wasn’t easy, but it is possible. We hired some daytime companion coverage, the grandkids took turns after school and a few hours on weekends, and we traded the weekend/evening/overnight shifts. Other relatives and friends were good about helping out when we had events/commitments that couldn’t be missed.</p>

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<p>I am going to try and be more clinical with this post, because I do not want to make another long post or something. </p>

<p>The fellow has the public student loans. </p>

<p>He has no more options left with the deferments and the forbeances and all of that. </p>

<p>His mother has diabetes which has gotten to the point where she has lost one leg. He has some kind of knack with helping his mother out for some reason.</p>

<p>His brother works very hard for a bank in a professional capacity but the pay is humble. He has a combo job or something where two days out of the week he works the front desk and three days out of the week he is a bank teller. I think that the ecomony has lent itself to combo jobs.</p>

<p>Now the fellow is 17 days behind with his loans and he said that they are now in default. </p>

<p>I assume that the IBR would work. But, I do not understand how it would work if someone is a grown man with no income. </p>

<p>If anyone can help me learn more, I would greatly appreciate it. I truly know the situation very well and it is super duper sad. If there was some way that I could learn of how he could ethically qualify for IBR, then I would personally not mind giving the fellow under $50.00 a month or so in order for his finances to not be ruined. But, I need to learn more of the ethics behind this sort of situation and what he would truly qualify for. </p>

<p>sk8rmom I thank you for your reply very much. The bottom line is that I am not as well informed as most folks with this stuff. I go to College on full academic scholarship and had a tiny student loan for my freshman year housing which I have already paid off during the summertimes and all. So, I am more uninformed than the average student and am therefore in a position of wanting to help if I can figure out what can ethically be done.</p>

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<p>I don’t know what his brother’s job duties have to do with this issue,but I assume the brother is supporting the family or supplementing whatever income the mother has since your friend has no income.</p>

<p>I would suggest that your friend call his student loan lender and explain the situation. He may be able to apply for IBR except a loan may have to be current for any re-structuring or for a new payment plan to be put into place.</p>

<p>The good news is that this situation is probably temporary and your friend will eventually get a job and pay his debt.</p>

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<p>One thought, having been there and done that…when some one is very ill and needs caretaking, it can take over the lives of those involved and it becomes very difficult to see the big picture.</p>

<p>Some considerations for this family:</p>

<p>It is likely that the mother does not want to see the son lose his good credit, impacting all sorts of things for the next 10 years- insurance premiums, ability to rent a place on his own, etc</p>

<p>The mother needs help, but if her son was not available something else would have to be done…perhaps it is time to begin considering the something else.</p>

<p>Where does the working brother live? Who would take care of mom if son is working? Do the brothers both live there? Can the son work a night job whilst the brother is taking care of mom? Can mom’s disability check go partially to the loan repayment? How much would it cost to hire a caregiver? Can they do that and have the son work or can family pay the son to be the caregiver so that he can pay his loans?</p>

<p>Is there any sort of state program for in home health care? CA, for example, has some sort of program allowing a family member to be paid by the state to car for a disabled person. If mom had no sons, what would happen? What resources can be accessed?</p>

<p>If son has exhausted forbearance, maybe it is time they recognise that there are changes which need to be made, he needs a job or to be paid. He cannot be a responsible adult and default on his loans.</p>

<p>I know that sounds cold, but imagine he does that, ruins his credit and mom dies 6 months later (not trying to be brutal, but you’ve got to think about the ramifications of the choices here) and her place is no longer available to him. He goes to get a real job and apartment, but his student loan defaults show up, no job offer (many employers check credit 1st) and does not pass the credit check for a rental. He could be in seriously bad shape. They, as a family, may need to adjust the situation to allow him to meet his obligations.</p>

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<p>[Student</a> Aid on the Web](<a href=“http://studentaid.ed.gov/PORTALSWebApp/students/english/difficulty.jsp]Student”>http://studentaid.ed.gov/PORTALSWebApp/students/english/difficulty.jsp). Try this link - it has info regarding options for postponing repayment.</p>

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<p>Hi! I spent over 20 years with defaulted student loans. I would like to suggest that your friend call and talk to the loan holder. Ask them about alternative repayment plans, IBR, etc. I successfully rehabilitated a loan when I hadn’t made payments in 20 years. I didn’t have a job, and it was okay – my payments were contingent on my income, so they were just very small. </p>

<p>But most importantly, call and talk to the lender. It’s very scary to do, but it’s not going to make the situation worse, and it might make it better.</p>

<p>PS: And let me be honest here. The world doesn’t end if your loan is defaulted. For 20 years, I rented apartments, got jobs, held credit cards – with a defaulted loan on my record. No, I couldn’t buy a house, and I couldn’t have a lot of credit. A couple of times, I was turned down for an apartment. But my life was not ruined because of it. I’ve certainly not failed to be a responsible adult because I had a defaulted loan. And even better? As soon as that loan issue is resolved, it comes back off the credit. I called and negotiated rehabilitation and within 60 days, it was off my credit reports.</p>