Imagine answering your door to find U.S. Marshalls waiting for you outside. Being a law abiding citizen, you can’t quite understand what you could have done to have brought them to your house.
That’s when they tell you why they’re there: you’ve failed to pay a student loan for $1,500 that you took out almost 30 years ago and thought you had already paid. For that, they arrest you and take you to the courthouse to see a judge who makes you sign up for a repayment plan.
It seems like the type of story you read about, share widely with friends because it’s so shocking and then later find out was a hoax.
It’s Not A Hoax
What we described above really happened to Paul Aker of Houston, TX last week. He was so shocked that armed U.S. Marshalls would come to arrest him for unpaid student loans that he actually told them he was armed and hid inside his house for two hours, not coming out until he recognized local law enforcement.
Aker claimed to CNN that he was unaware that he still owed the debt, which has grown over the last 29 years to over $5,700. According to the terms of the repayment plan he signed, he’ll now have to pay $200 a month until he pays it off.
But the U.S. Marshall Service begs to differ that Aker was unaware of his debt claiming, according to CNN, that he had been contacted on numerous other occasions and that they even spoke to him over the phone in 2012 asking him to appear in court, which he refused to do. The result of failing to appear was that a judge issued a warrant for his arrest.
While it seems extreme, it’s actually not uncommon for judges to issue arrest warrants for people who fail to pay their student loans and don’t show up in court when summoned. In fact, there are around 1,500 arrest warrants currently open for people like Aker in the Houston area alone.
How to Avoid Getting Arrested for Student Loans
If this story has you worried, then rest assured that you likely won’t have the U.S. Marshalls show up on your doorstep. It’s actually pretty easy to avoid getting arrested for student loans.
To have things go that far, you would have to default on your student loans first – which means you would have to not pay your loan for 9 months. During this time, you would receive numerous notifications from your lender warning you about defaulting on your loans or offering to renegotiate your payment plan.
If you still don’t pay off your student loans after that, your file would then be handed over to a collection agency who would likely also contact you numerous times to set up a repayment plan. Any tax refunds you were entitled to could be held to cover your loans and they could submit a request that your wages be garnished.
If you still did not pay, they would likely sue you for the full amount of the loan, as well as collection costs and late fees, and request that you appear in court.
It’s only when you didn’t appear in court that a judge could then issue an arrest warrant and ask that the U.S. Marshalls stop by your house for a visit.
So, generally, you would know and be able to act to keep yourself from getting arrested. In Aker’s case it sounds like the U.S. Marshalls might have sent some notifications to addresses where he no longer lived but situations like that are rare.
Could We Be Seeing More Student Loan Arrests?
The fact that 11% of student loan borrowers are currently in default on their loans according to the New York Federal Reserve does not bode well for an end to these arrests.
Nor does the fact that our January Student Loan Borrower Survey showed that very few student loan borrowers understand the terms of their loans and that 58% of borrowers were either not sure or didn’t believe they would ever pay back their student loans.
The high amounts of debt students are taking on coupled with the lack of education they are given around student loan debt is likely a big part of the problem. If borrowers don’t understand the consequences of not paying their loans, for example, they could think that if they ignore the warnings that they’ll go away.
For these borrowers, a visit from the U.S. Marshalls might be in their future.
Author: Dave Rathmanner
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