Dear Debt Adviser,
My son, I am ashamed to admit, did not pay back his student loan in a timely fashion, so now 15 percent is being taken from each paycheck and he is having a difficult time meeting the rest of his obligations. The lender will not negotiate. Is there a way around this for him before he goes under? He wants to pay it back, just not so much at a time.
— Pam

Dear Pam,
Slow down, Mom! I wish your son were writing and not you, not because I don’t want to hear from you, but because I would be more optimistic about your son’s situation if he were the one asking for help directly. Unfortunately, your son did not come to terms with his student loan lender before collection efforts escalated to the point of a court summons and subsequent garnishment. At this point in the debtor/lender relationship, the lender is no longer willing to negotiate. It will continue to garnish at the legal amount allowed until the student loan debt is paid.

Let me suggest that you can still be supportive to your son without helping him find a way around this problem. Financial stress can be a great motivator for him to develop a budget, set some realistic goals and get his spending under control. Encourage him to take positive action and learn from this situation. Having wages garnished is embarrassing and expensive, but it can still be a cheap lesson that will serve him well in the future. In other words, commiserate but don’t help him circumvent and especially, don’t co-sign.

Unlike many other obligations that can be dismissed or renegotiated through the bankruptcy process, a student loan is a debt that is very difficult to get rid of through the courts. Plus, they are collectible nearly forever. I have heard of tax refunds and even Social Security payments being taken to satisfy these debts. Loans are forgiven in very few special circumstances where “undue hardship” can be proven, such as being physically unable to work.

Now that we have established that your son owes the debt and that making the payments as ordered by the court are good for his character and future well-being, where does he go from here? Well, I suggest that he rework his monthly budget so that he can meet all his obligations. His student loan debt effectively took over as his priority obligation when his paycheck was garnished. That particular bill will be paid every month, regardless. The next step is to prioritize his remaining obligations and look for places to cut back so he is not spending more than he earns each month.

For your son, that may mean changing where he lives to less expensive housing (it is hoped, not back home with you), driving a less expensive car and/or cutting back on extras like cable television and premium phone service. If things are still too tight and cuts alone won’t make ends meet, then considering a part-time job to increase his income would be appropriate. Please, give him all the sympathy you want, but not any money. Eventually his income should increase through pay raises or promotions, and it will get easier for him to make the payments as he earns more.

A last word of caution for my readers who are newly out of school and may be facing this same issue: Trying to escape a student loan garnishment by switching employers won’t work. The lender will eventually find you, and you will have to pay. In the meantime, this unpaid debt will be aging on your credit report like an unwanted pimple and cause you no end of problems in getting employment, promotions, insurance and even renting an apartment.

Mom, you have a great opportunity here to help your son move along the path to responsible adulthood. They don’t come that often that you can afford to let him get around this one.

Good luck!

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