I'm currently in defaulted federal student loans, and looking for a best strategy view point

So, my federal students loans are currently defaulted. Currently there is an law under Congress that federal student loans are not going to be collected until December 31st, 2020. I’m looking for the best strategy to get my loans forgiven if there is a proposed $50,000 cancellation. Or continue the fight and not repay until such a deal is a guarantee for the public?

All the best xo :rose:

Hi @Bearjam I’m glad you are here!

The best strategies are going to be collective. Have you joined the strike? strike.debtcollective.org

We’d love to hear your ideas about how we can organize effective actions to force this kind of mass cancellation through.

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Yes! I have joined the strike and added my name to the roster of strikers a few years ago.

The only idea that I have is that it’s strategy through words when dealing with collections and even reaching back out to the collection agency. I’m currently inquiring about a student debt in default and not sure of the outcome just yet. Processing days for messages are up to four days. So I took the time to use this site. I reached out many years ago on this communal forum, and finally back with some sort of quasi update. I mean, new ideas come up like Senator Chuck Schumer backing a cancellation. So, the power in the numbers of student borrowers are being shown student debt cancellation can be achieved and is being looked at.
I’ve extensively looked at the idea of me being in power of my negotiation for debt cancellation and finally getting the courage to reach back out to collections. But that’s all I know of for now.
The other idea is that, say the dream that $50,000 is cancelled by the proposal from Senator Elizabeth Warren and Senator Chuck Schumer, and who could the possible outcome of a $50,000 be given toward? I.e. The people that have not defaulted on loans or the people that have been paying their loans or enrolled in some Income-Driven Repayment?
^Those questions just popped in my mind.

Another update,

So it looks like my loans are in a collection agency called central research. I’m also looking for a power of attorney to help me negotiate a settlement to get out of defaulted loans. I’m currently residing in Buffalo New York and unemployed due toCOVID-19. Any advice from fellow debtors is appreciated.

I’m guessing these are federal student loans? Can you confirm that? Or is there a chance these might be private student loans? I’m guessing they are federal because it looks like Central Research is one of the debt collection companies the Dept of Ed hires.

You can sometimes negotiate a settlement for private student loans, but you can’t really negotiate federal loans at all. If these are federal loans one option worth exploring is consolidating your loans, which would bring them out of default. Then you can apply for an income driven repayment plan. Since you are currently unemployed, your monthly payment would almost certainly be set to $0 a month.

There are many advantages to going this route. It basically keeps you on strike (i.e. paying nothing) but removes this account from default status, which means it should be put back in good standing on your credit reports. It will also keep these debt collectors from harassing you. There is some paperwork involved, however, both with the consolidation and the application for income driven repayment.

Hi Thomas,

Yes, correct they are federal student loans. How does the debt consolidation work even though they’re thru a collection agency? On Central research website offers a debt consolidation as well as an IDR program as well.

Don’t go through the collection company to consolidate your loans. Go directly through the Department of Education. Start here:

A question arises especially during this pandemic situation. If I’m receiving unemployment, that also I offered to tax, how would i input my grossly annual income if it has changed from last year? It was from 25,000 to unemployed to receiving about 2,400 a month from pandemic. Still currently unemployed.

That is a good question and I confess I don’t know the answer to it. But you could ask your servicer or the Department of Education directly.

As a general rule of thumb when filling out paperwork like this I try to do as much homework as I can, ask everyone I can think of to ask, but if I still am unsure of how to fill it out I just do my absolute best to be honest and fill it out in the way I think is the most accurate. Given how difficult they often make these processes there are some times when it is not obvious what they are looking for and we just have to do our best. But to start I’d call your servicer or the Department and ask them.

An update for future folks that are attempting to consolidate or rehabilitate. Theres a new updated section that says loan consolidation will not erase from credit history and loan rehabilitation will still show. I think formally, loan consolidation would wipe away the credit history. If I have that correct.

Oh! I tried to consolidate my loans and it continuously ended at the end page with the site crashing and refreshing the whole process over again. I believe it to be a little intentional for this new update for loan consolidation.

Thanks for sharing this. I’m not quite sure what to make of it, but this seems worth spending some more time to look into.

Yes this is true. I emailed Chuck Schumer because this system has been around longer than I have been alive so hopefully an intern will answer back. :sweat_smile: