Hey Reddit. Not sure if this the right spot for this post. But it just feels right.
So for years I've been in a deep depression because of my student loans. I spent $141k for Art degree and have nothing to show for. So for years I buried my head in the sand and ignore the issue for years. Until in 2019, when I got an notice from my HR department that my that my wages were gonna be garnished because of my student loans. So now I was forced to deal with the issue.
Collections were taking nearly $500 out of my check every paycheck. With the money being taken out, I had another reason to be depressed and now I have to worry about making rent. For 7 months my paycheck was garnished. Then the pandemic hit.
With 2 years of not having to pay back my student loans I was able to find a better job, I was able to save enough money to actually have an emergency fund, and to actually start investing in the stock market.
With the help of my therapist and my partner I was able to finally face my student loans head on and decide to actually repay for my education.
After talking with several representatives at the collection agency, I told them that I am never going to be able to pay off these loans in my lifetime. Was there anything else they can do? I was able to speak to someone who said they were able to settle my debt for a fraction of what I owe. This was in 2020.
The rep at that time told me that they will settle my debt for $16,000 but I have to put 20% up front first, and pay monthlyafter that until the debt is paid. At that point in time I did not have 25% of $16 000 to give, especially without dipping into my newly funded savings account. So I asked them, in my most humbled of ways, “if there was anything else that I can do?” They said that they will set up a payment plan for me but the in order to do that, my student loans repaymen has to be “settled”. Looks like I had student loan payments on the way from my garnishment, so they could not start the process untill my garnishment was the refunded back to me.
Fast forward to Early March 2022. After receiving a refund check from the Department of Education. I contacted my creditors and to see if they would still honor a settlement if I were able to put down 20% (i knew it was 25%). When I called to see how much they were settled for, 2022, they said that they will settle the debt for nearly $7,900. A huge decrease from the $16k two years ago to settle my debt.
I guessing these agencies really want to settle these accounts, just encase Biden extends the student loan pause again.
So I put down the 20%, and actually tapped into my savings to do it. $1500 as a down payment to settle with debt for $141k. Seems like a no brainer.
I'll be student loan debt free in 30 months with a monthly payment of 210$. And I made sure to get everything in writing before I sent them a penny.
I highly advise anyone that's currently in student loan default, contact your collection agency and see what they will “settle” for. It will be an negotiation. But as long as you're humble, and not curssing out the the collector, they should want to work with you.
This is just my experience. Good luck to everyone.