Job Discussion Forums

carabao · Joined: 03 Oct 2007 Posts: 12

Does anyone know if having defaulted on federal student loans would prevent me from getting a first-time teaching certificate in the U.S.?

My loans are currently in default, and I'd like to know what effect it will have on my ability to get certified, and work in the public school system.

I understand that this will vary depending on the state. I am most interested in returning to Alaska, but information about other states would be useful as well since it will help me focus my efforts.

Thanks in advance for any information, experiences, or links you can share.

johnslat · Posted: Fri May 01, 2009 2:09 pm Post subject:

Dear carabao,
I don't think so - judging from this:

Cancellation/Deferment Options for Teachers
If you're a teacher serving in a low-income or subject-matter shortage area, it might be possible for you to cancel or defer your student loans.

http://www.ed.gov/offices/OSFAP/DCS/loan.cancellation.discharge.html

http://studentaid.ed.gov/PORTALSWebApp/students/english/teachercancel.jsp?tab=repaying

and

"Loan Default
If you do not repay your loan on time, it will become delinquent and possibly default. This has serious consequences and can be very damaging to your credit rating.

Defaulted loans are reported to national credit agencies, which can negatively affect your credit rating and your ability to purchase a car or home in the future. In addition, the following can occur: you may lose future eligibility for financial aid and/or educational loans; the references you supplied on your loan application may be contacted; additional fees and interest may be charged to you; you may lose deferment and forbearance options; your federal and state tax refunds may be applied to your loan balance; your professional license renewal may be denied; your employer may withhold part of your salary for payment of your loan; and legal action may be taken against you.

If you are unable to make your scheduled loan payments, do not wait to ask for help � contact your lender(s) immediately."

The inference that I draw from all this is that since they're talking about your situation AS an employed teacher with a defaulted loan, then it seems to me you must be able to get certified despite having defaulted.

Regards,
John

bdbarnett1 · Posted: Fri May 01, 2009 3:47 pm Post subject:

In Texas, you can lose your teacher's license if you default on your loans (assuming you're not doing something to try to make it right). I would definitely do my best to fix the situation.

15yearsinQ8 · Joined: 17 Oct 2006 Posts: 462 Location: kuwait

your pay will eventually be liened (or deducted) for federal debts (back taxes and such) but no, licenses issued by states are not depend this - they will finger print you and do a rudimentary background check to check for prison time or child molestation

carabao · Joined: 03 Oct 2007 Posts: 12

Thanks for the replies. I appreciate everyone's input.

My problem is that I've been teaching overseas for nearly 6 years, and my loans went into default 5 years ago.
I never intended to go back to the states, but now would like my kid to study there as I can't afford a decent international school here in Asia.

I looked into getting my license to practice law back , but these long defaulted loans are considered evidence of "bad character", and I'm a bit concerned that I will come up against the same problem getting an intitial teaching cert.

I don't really want to raise the issue with my putative employers, so any additional anecdotal info would be welcome.

rigel · Joined: 17 Apr 2009 Posts: 308

What nobody will tell you is: You have the right to rehab your loan at any time. When you make a certain number of payments, and I believe you have to pay for a year without being late, your loan is taken out of 'default' and restored to normal status. What is more, after your loan is returned to 'normal' status, the default entry to the credit bureaus is deleted and you can even get more student loans. It's a sweet offer.

A student loan default isn't forever. Call up those guys in Greenville and tell them "I want to rehab my loan(s)."

http://www.ed.gov/offices/OSFAP/DCS/rehabilitation.html

Never Ceased To Be Amazed · Posted: Mon Jun 29, 2009 8:22 pm Post subject:

I have my own little saga re: defaulted student loans. When I went to buy a house, even as a foreign income earner, I qualified for a "no doc" loan for 15 years (since paid off) at 5% interest and discovered that my credit score was 720.

Default DOESN'T mean "DEATH". For me, it means Wachovia won't see another dime until they provide me with receipts for the three years of payments I sent them from Japan at usurious money transfer rates!

NCTBA

P.s.- Wachovia went down the tubes. I, on the other hand, am still solvent! Laughing

rigel · Joined: 17 Apr 2009 Posts: 308

I know people who haven't paid in 30 years. Buddha only knows what their credit score is. Credit scores. Just another scheme to control people's behavior.

You know, Ceased, you're onto something. Lots of people back in the USA are avoiding foreclosure by saying this statement: show me the note. Many creditors don't have proof of their outstanding debts. When a debt changes hands a lot, I'm sure the 'proof' is left behind.

canadashirleyblue · Joined: 06 May 2007 Posts: 162

I know that in the Uk if you have not made a payment on your debt in six years or admitted that you owe the money they can no longer take you to court for it. There are a few exceptions and with student loans it depends on when you took it out. The more recent ones permit the creditor to take the money from your pay but the older ones don't.

The credit reference agencies are only allowed to keep the info on file for a certain period of time (6 years - I'm not sure).

You need to contact someone who knows what the rules are in your state.

johnslat · Posted: Sun Jul 12, 2009 9:15 pm Post subject:

Dear canadashirleyblue,
Six years is (generally) correct:

"The UK Insolvency Helpline offers the following advice: generally information is held for six years and then deleted. This will include credit accounts in default, bankruptcy orders, Individual Voluntary Arrangements (IVAs) and County Court Judgements.

However if there is information regarded as inaccurate, for example a debt which has been paid in full and shows on the report as unpaid, the lender should be asked to contact the credit reference agencies to have the entry corrected."

http://74.125.155.132/search?q=cache:cWSFH0AZzZkJ:personal-debt-management.suite101.com/article.cfm/whats_in_a_credit_report+credit+reference+agencies+can+keep+information+for+only+seven+years&cd=1&hl=en&ct=clnk&gl=us

Regards,
John

rigel · Joined: 17 Apr 2009 Posts: 308

Too bad the USA isn't so lienient when it comes to student loans. But if student loans weren't guaranteed, it'd be hard to get one without a co-signer.

In the US, student loans can be forgiven in only a limited number of ways. If you default on your student loan debt and don't use one of the tricks to getting it forgiven, that debt will follow you around forever. But this isn't so bad. When you DO decide to get after it and pay it down, it'll be taken out of default status after only one year of consistent payments and your credit score will be readjusted to reflect this. This isn't a bad deal.

jg · Posted: Sat Jan 16, 2010 3:39 pm Post subject:

Get your student loan out of default, it's easy. Usually for 6-9 months of consecutive payments you can get it out of default. Contact the bank that holds your loan (or more likely the collection agency) and see if you can get it moved to the US Dept. of Education. Monthly payments depend on your income and can be painless amounts like $40 or so.

I think lots and lots of teachers have defaulted on their loans at one time or another. I did, and I "rescued" them and I now teach in the public school system. Perhaps this is my punishment for having defaulted in the first place, but whatever, I've got faculty parking now!

Good luck to you. Very Happy

eclectic · Joined: 09 Nov 2006 Posts: 1122

angelabrookss · Joined: 31 Jul 2010 Posts: 2

Defaulted loans are reported to national credit agencies, which can negatively affect your credit rating and your ability to purchase a car or home in the future. In addition, the following can occur: you may lose future eligibility for financial aid and/or educational payday loans; the references you supplied on your loan application may be contacted; additional fees and interest may be charged to you;

Teatime of Soul · Joined: 12 Apr 2007 Posts: 905

Some student loans have been fraudulently accelerated into default by lenders who ignored legitimate and allowable request for extensions, refused to suspend payments for military service, graduate studies, etc.

As another poster pointed out, similar to the housing lending crisis, many student loan originators did sloppy paperwork, and the note has been resold a dozen times without the proper documents to various banks and collectors.

If it were me in the above circumstances, I'd have a lawyer contact whomever claimed to be holding the right to collect on the loan and ask them to produce the original documents. Also, the lawyer can help negotiate a reasonable payment schedule if needed.