Occupy Movement: Student loan forgiveness or future loan default? | 11.21.11

Posted in News, Repayment, Student Loans By Student Loan Network Staff

Occupy Wall Street TentThe Occupy Wall Street movement has been going on for a couple of months now, and as I’m sure many are aware, the subgroup of Occupy Student Debt has captured the media’s attention. With tuition at astronomical numbers, and unemployment at a high rate, many students and graduates are unable to repay their loans. Because of this, OSD has a new plan to encourage higher ed reform: refusing loan repayment. In the Inside Higher Ed article Refusing to Pay, Libby Nelson writes:

“Most experts, even those who agree with the movement’s aims, would describe these goals as unattainable. The theory behind the campaign is that if 1 million students refuse to pay, they would face minimal consequences due to safety in numbers. But many experts on student finance worry about the impact on anyone who stops paying: student loans cannot be discharged in bankruptcy; lenders — especially the federal government — will go to great lengths to go after debt; and some borrowers currently frustrated by their debt may not realize the impact of non-payment on future financial goals.”

Student loan default can have massive consequences to the borrower, and it’s important to know what your options are if you cannot afford your loan payments.

How default works

For federal loans, once you miss a payment, you are considered in a state of delinquency. If you remain in delinquency for 9 months, your loans are then in a state of default.

Consequences of default

  • Your loans will be turned over to a guaranty agency
  • The loan may be accelerated, meaning the entire loan amount becomes due immediately
  • You may be subject to garnishment of your wages
  • Credit bureaus will be notified and your credit may suffer
  • Your loans are no longer eligible for federal benefits

How to avoid default

If you’re having trouble making federal loan payments, there are options available to help ease the burden. Student loan deferment and forbearance are available in certain circumstances such as economic hardship, and even unemployment. Additionally, consolidating your student loans could help lower your monthly payments, as well as your interest rate. For borrowers with private loans, your lender may also offer forbearance and consolidation. If you find that your loan payments are too much, talk with your lender as there may be more options available than you think.

To learn more about avoiding default, and what happens once you have defaulted, read How to Avoid Student Loan Default.


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295 Responses to “Occupy Movement: Student loan forgiveness or future loan default?”

  1. Shalee says on December 5, 2011 at 6:57 pm:

    Debt should always be avoided, there are so many scholarship and grant opportunites as well as work study. It is possible.

    Reply To This Comment
  2. Emma says on December 5, 2011 at 6:24 pm:

    It’s a terrible burden having to pay back loans after graduation, and before even starting on the career track, that’s why it’s so important for college students to work and do whatever they have to in order to minimize their future indebtedness.

    Reply To This Comment
  3. Rochelle says on December 5, 2011 at 5:28 pm:

    I agree with the occupy movement, more than dealing with the specific issues however occupy is about ending the streamlining corporate greed. Jacque Fresco, Neale Donald Walsch, Dwayne Dwyer, and countless others have been writing for years on the obvious gross misconduct of the political and economical powers in this nation. Freedom is about completely letting go, not buying the newest phone.

    Reply To This Comment
  4. Grace says on December 5, 2011 at 4:07 pm:

    There must be a better way to make this point.

    Reply To This Comment
  5. Erin says on December 5, 2011 at 1:29 pm:

    The whole Occupy movement is dumb. This comes as no surprise.

    Reply To This Comment
  6. Christina Tutorow says on December 5, 2011 at 12:32 pm:

    I think that the student loans not being paid back is really good – to an extent. I think that a certain amount should just be dropped because, really, a lot of people owe a lot of money.

    Reply To This Comment
  7. xavier says on December 5, 2011 at 11:28 am:

    I think it’s a shame we are in debt as soon as we graduate. They should have a program for whatever occupation you choose where your loan is decreased every year you work. It’s like you are working off your debt.

    Reply To This Comment
    • Hira says on December 5, 2011 at 3:18 pm:

      I agree! We obtain a higher education in the hopes to move forward in the steps to becoming financially stable; yet, most of all our earnings are put towards paying our loans and we do not reach stability until many years down the line.

      Reply To This Comment
  8. Anahi says on December 5, 2011 at 11:19 am:

    It’s sad that these students finally get their degrees, but can’t move on because of their loans and debts.

    Reply To This Comment
  9. Josh says on December 5, 2011 at 10:54 am:

    If I borrow money, I expect to have to pay it back. I don’t want others “borrowing” my money & then taking off with it. If all of your current student loans are “forgiven” (read: governmentally strongarmed) then my chances of borrowing enough money to get through my degree are slim at best. I NEED loans — and I need agencies willing to loan money based on future expectation of receiving an honest return for their investment.

    Reply To This Comment
  10. Gina says on December 5, 2011 at 10:22 am:

    I you borrow money it is your responsibility to pay it back.

    Reply To This Comment
  11. molly says on December 5, 2011 at 9:39 am:

    schools are just so expensive it seems easy to get over your head in debt and then have trouble getting out of it

    Reply To This Comment
  12. Savannah says on December 5, 2011 at 9:29 am:

    i already dread having to get student loans

    Reply To This Comment
  13. chris k. says on December 5, 2011 at 8:50 am:

    A bit of student loan forgiveness would be a good thing!

    Reply To This Comment
  14. Janelle says on December 5, 2011 at 8:22 am:

    Go to college while you’re in your 20′s and figure out what kind of career you want and that will make you happy. You’ll have more time to pay off student loan debt versus later on in life.

    Reply To This Comment
  15. Rebecca says on December 5, 2011 at 2:14 am:

    Not bad,

    Reply To This Comment
  16. need a scholarship says on December 5, 2011 at 2:06 am:

    Even more reason to try to get some scholarships.

    Reply To This Comment
  17. Kyla says on December 4, 2011 at 11:43 pm:

    This default sounds scary. I hope this situation improves soon.

    Reply To This Comment
  18. Jaynefael says on December 4, 2011 at 9:54 pm:

    I agree

    Reply To This Comment
  19. Kyle says on December 4, 2011 at 7:14 pm:

    Great advice!

    Reply To This Comment
  20. Jour'Danne says on December 4, 2011 at 6:09 pm:

    I do agree that if we “borrow” money it should be paid back nonetheless interest rates could be lowered in order to make the payments be more manageable over the years

    Reply To This Comment
  21. Susan says on December 4, 2011 at 5:45 pm:

    Why are these people demonizing the “rich”? There are not enough “rich” to steal from?? We’re middle class, but don’t resent honest, wise, ethical folks that have grown businesses and hire. These occupy people ought to whine to politicians about getting oil here, helping businesses thrive in AMERICA with less nonsense regulation, cutting all the fat and taxes, STOP spending and wasting our $$$$.

    Reply To This Comment
  22. P says on December 4, 2011 at 5:43 pm:

    If you deserve the money, like if you work at your grades, do well in school, and stuff like that, than you should be rewarded by getting into the school that YOU want, even when you can’t aford it….if you don’t work at it you shouldn’t be given the money, especially if you just are skilled at 3-point shooting and have d’s and f’s.

    Reply To This Comment
    • Christina Tutorow says on December 5, 2011 at 12:34 pm:

      I aggree because I want to go to a $15,000 school and I can’t even afford that and I’m a straght A student.

      Reply To This Comment
  23. Susan says on December 4, 2011 at 5:41 pm:

    Live within or BELOW your means. There are many options and college choices. I will not go into debt so will only go to school our family can afford. If you borrow, you must repay. These occupy people appear to be the worst of our country, degenerate whiners. Trophy for showing up. That is NOT how our country will grow strong again….

    Reply To This Comment
  24. marisa says on December 4, 2011 at 5:19 pm:

    I agree ^

    Reply To This Comment
  25. Briauna Sam says on December 4, 2011 at 4:53 pm:

    I think that they need to be a bit more peaceful in their protests

    Reply To This Comment

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