Student Loan Default , how to get???
I went to a private school in Texas, and have since returned to Alberta,
Canada to work.. While there, I received a student loan from a private
educational lender to help with school. Now that I am back in Canada, and
have made a few payments already, what happens if I go into default on my
loan? I have heard that it then gets sold to a Canadian Collections Agency
and they act on it. When this happens, I assume it is sold at a discount
and then I will have essentially less loan to repay. Is this true, does an
American company have authority to "chase" my loan into Canada, and
therefore affect my credit rating? Or can I let it go into default and pay
it back with a lower principal.
All lawyers out there, please let me know if this is what happens.
"Defaulting on student loans can cost you a bundle -- far in excess of the
amount you borrowed originally. Guarantee agencies typically add a
collection fee of 25% to the principal, interest, penalties and other
collection fees you already owe. (If you try to negotiate a payment plan to
get yourself out of default, the guarantee agency will cut the fee to
18.5%.) In addition collection agencies charge the Department of Education a
commission of about 28%. That commission is passed on to you, meaning you
have to pay the money you owe on the loan, the collection fee and the
commission. " Nolo.com
If you think you will never have to come back to the States, Doc, you might
get away with defaulting.