Yes, get a lawyer and seek sound advise. But wait a minute here: Aren't some of us missing the point somewhat?
Did you borrow and accept the loan money on your own free will.?
Did you agree to pay it back?
Did you get the education?
If the answers to the above are 'yes'....then why the debate on whether to pay it back or not. Maybe I'm a little old fashioned, but the way I always understood the loan deal was: When you borrow and agree to pay back, you pay it back !!!!
When you don't pay back a government loan, gets who pays it back for you? The taxpayer, that's who. That's me and you and everyone else out there reading this post.
Don't like to pay penalty and interest? Don't blame you, who does. But it occurs to me there was a simple solution that could have been taken to avoid this...Namely, you could have paid the money back when due. You didn't, you used their money, and they are entitled to interest. And if you agreed to pay a penalty when you signed for and accepted the loan....again, I don't see the problem. Say what you do, then do what you say.
For the record,way back when I borrowed for all my kids' educations on what was then called Parent Plus Loans, in which the parent is responsible, not the student. And I paid back every last dime, made the very last payment last month as a matter of fact. Sure I would have rather gone on a cruise, toured Europe, bought a BMW. But when you owe someone, you pay it back. Simple as that.
And by the way, I have found when one needs a little help when one hits a payment speed bump along the way as everyone does, they are more than willing to help you seek out equitable solutions if you demonstrate you are legitimately trying to deal with the situation and not just deadbeating them. Of course, now that you've let it get out of hand and it's gone to a collection agency, you have a whole new set of problems with only yourself to blame. The original lender is out of the picture since they probably technically 'sold' the loan paper to the collection agency, collected pennies on the dollar, and washed their hands of you. So don't expect much in the way of sympathy from the collection agency, they're in the 'for profit' business, they want their money, they expect to earn a profit, and the have the legal leverage to get it. You would have been much better off negotiating with the college years ago, but you apparantly squandered that opportunity.
If the moral arguement doesn't hit home, maybe a more pragmatic explanation will. If you stiff them on the loan, they WILL screw your credit. If the loan is from 2000, I assume you're fairly young and have lots of major purchases in your future...cars, homes, etc. With a poor credit score, the $1200 you're complaining about now is going to look like chump change compared with the inflated interest you'll pay over your lifetime as a result of having ruined your your credit. .
My advise--if you got the money, pay it back. Work out a payment plan you can live with that perhaps a lawyer can help you negotiate, don't stiff them. That's neither right nor smart.
