Question:
Dear Steve,
I recently discovered my husband owes over $30K to Navient for student loans. I previously thought he only owed around $3K, which is visible on the student gov website. His tax return (now our tax returns) go to pay this.
I don’t think my husband had ever paid the Navient loan and it was first disbursed in 2002. He seems to think the loan will just “go away” eventually, as he never gets any calls or mail about it. Also, this debt isnt on his credit report. What should he do, moving forward? He will never be able to pay this off.
Lauren
Answer:
Dear Lauren,
Your husband is what I like to call, WRONG.
There are two issues that concern me here. The first is if he owes federal student loan debt and he thinks it will eventually go away, that would be an incorrect belief.
There is some evidence he owes a federal student loan because of the tax refund intercept. That option is not available for private student loan debt.
However, if you are looking online at the National Student Loan Data System (NSLDS) and it is only showing a balance due of $3,000 then it might indicate he could owe Navient money in private student loans that would not be reflected on the government loan website.
When you default on federal loans it has big consequences. Not only does additional interest pile onto the loan but additional fees and penalties get tacked on as well. Over a fifteen year period it could be possible for an unpaid $3,000 original loan to explode to a massive amount.
Before you leap for a solution here you first need better data. I would suggest you look at the statement from the servicer who claims he owes $30,000 and get some clarity on which loan(s) it is for.
If this is a problem with a federal student loan, as I suspect, it will never go away and he will probably have your Social Security check garnished when he goes to retire if this isn’t resolved.
Now is not the time for inaction. Now is the time to take charge, get some additional information, and then update me in the comment section below.
