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Yes they can. Usually this is done by taking your tax refund to pay off tax debts you may have. They can also garnish your wages to pay the debt off. There are

Yes they can. Usually this is done by taking your tax refund to pay off tax debts you may have. They can also garnish your wages to pay the debt off. There are also professional boards that can/will revoke your professional license if necessary. This is a type of loan that can't be discharged through bankruptcy either. Best plan is to contact the Dept. of Education and set up a payment plan. Even if you're paying $20/month it will keep you off the radar of the government looking to collect on your student loans

toomuchtodo 10y ago
No, they can't. The IRS will turn over any funds due to you to the DOE, but they won't pursue the debt itself for them (a collections agency does so), nor will the IRS prevent you from renewing a passport over student loans. Disclaimer: Helped a friend negotiate ~$100K in defaulted student loans down to ~$10K while he was out of the country.
- charlesdm 10y ago
  Smart move - better to take the $10k than never to see the $100k! That's essentially what all these people should be doing.
  - toomuchtodo 10y ago
    This is exactly how all creditors work. You approach it as such: "I have X for you now (with X being about 1/10 of the total obligation). You either take that, or you get nothing." To be able to do this, you must have X, and you must be able to negotiate from a position of power (it has to be very difficult for them to collect).
    - MrMullen 10y ago
      How do you ensure that they will take X and wipe the loan instead of take X and then tell you that you still owe X x 10?
      - toomuchtodo 10y ago
        Signed contract/agreement. Try to default on that and I'll have my attorney take you to court and report you to the Consumer Financial Protection Bureau. The protections afforded by the FDCPA [1] against debt collectors are significant (although, in my opinion, do not go far enough). [1] https://en.wikipedia.org/wiki/Fair_Debt_Collection_Practices_Act https://en.wikipedia.org/wiki/Fair_Debt_Collection_Practices...
    - charlesdm 10y ago
      Yep. I had heard about it in private equity plays, i.e. a fund acquires a loss making business to turn around and force the lenders to write off 30% of their debt, but never with student loans. I've had success negotiating certain matters with the tax authority in a similar way, when dealing with unclear laws.

toomuchtodo 10y ago

No, they can't. The IRS will turn over any funds due to you to the DOE, but they won't pursue the debt itself for them (a collections agency does so), nor will the IRS prevent you from renewing a passport over student loans. Disclaimer: Helped a friend negotiate ~$100K in defaulted student loans down to ~$10K while he was out of the country.

charlesdm 10y ago
Smart move - better to take the $10k than never to see the $100k! That's essentially what all these people should be doing.
- toomuchtodo 10y ago
  This is exactly how all creditors work. You approach it as such: "I have X for you now (with X being about 1/10 of the total obligation). You either take that, or you get nothing." To be able to do this, you must have X, and you must be able to negotiate from a position of power (it has to be very difficult for them to collect).
  - MrMullen 10y ago
    How do you ensure that they will take X and wipe the loan instead of take X and then tell you that you still owe X x 10?
    - toomuchtodo 10y ago
      Signed contract/agreement. Try to default on that and I'll have my attorney take you to court and report you to the Consumer Financial Protection Bureau. The protections afforded by the FDCPA [1] against debt collectors are significant (although, in my opinion, do not go far enough). [1] https://en.wikipedia.org/wiki/Fair_Debt_Collection_Practices_Act https://en.wikipedia.org/wiki/Fair_Debt_Collection_Practices...
  - charlesdm 10y ago
    Yep. I had heard about it in private equity plays, i.e. a fund acquires a loss making business to turn around and force the lenders to write off 30% of their debt, but never with student loans. I've had success negotiating certain matters with the tax authority in a similar way, when dealing with unclear laws.