A recent experience highlights the ways in which so many borrowers in default run into brick walls when trying to enforce their rights. The twist to this experience is that it has a good ending. There is hope because in some cases, guaranty agencies or the Department of Education will step up and do the right thing.
This borrower had student loans held by Great Lakes. The loans went into default a few years ago and 15% of the borrower’s wages were being garnished every month. The borrower had received a devastating cancer diagnosis a few years ago. After aggressive treatment, the cancer is currently in remission. The borrower is looking ahead now, moving forward with his life and hoping to get a promotion at work. But the $600/month is causing severe financial and other stress in his family. They can’t afford it.
The borrower and his wife tried repeatedly to discuss options with the collection agency working for Great Lakes. They were unable to find a live person that would work with them. When they called Great Lakes, they were told they had to deal with the collection agency.
It is a horrible trap. Many borrowers want to move forward and learn about their choices, but they can’t get the information and assistance they need from collection companies that are paid and trained to collect, collect, collect. The extensive borrower rights in the Higher Education Act seem to be irrelevant in this push to collect at all costs.
Fortunately, many of the guaranty agencies (and the Department) have ombudsman or customer service offices to help resolve these problems. A possibility in these situations is to reduce the garnishment amount and allow the borrower to make a voluntary payment on top of the lower garnishment amount. The cumulative amount should hopefully be no more than what is reasonable and affordable for the borrower. The voluntary payments can then be part of a rehabilitation plan that if all goes well, will eventually bring the borrower out of default. At that point, the borrower is eligible for the various flexible repayment plans, including IBR.
Great Lakes through their ombudsman was willing to work with this borrower in this way. In our experience, this agency understands that default does not have to be a life sentence. In this case, if the borrower continues to show persistence in making the voluntary payments, Great Lakes will lift the garnishment order.
This resolution provides hope and a fresh start for this borrower. It cuts through the bewildering collection process where collection agencies routinely give inaccurate information and deny basic rights. It can be done.
