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Man arrested for unpaid $1,500 student loan

Originally posted on Fox6Now.com

When I saw this headline, I couldn’t help but click. Is it an Onion article? No. This is real. A judge issued a warrant for the student loan defaulter, which is why two U.S. Marshals showed up at his house to serve him.

There are so many things wrong with this, I’m not sure where to start.

1.) Is this a good use of our tax dollars? To go hunting down a man for a $1,500 loan?

2.) The man’s loan was $1,500 when he went to college. Now, 29 years later, it’s $5,700 because he forgot to pay it. This isn’t a delinquent credit card payment for an impulsive vacation to Malibu or a 75-inch plasma T.V. This loan was taken from the federal government, so this man could attend school.

Anyway, I’ll just let you read the article and draw your own conclusions.

Best quote:

“I’m still shaken,” Aker said. “Why send seven guys with guns about a student loan?”

NEW YORK — A Texas man was arrested by U.S. Marshals last week for not paying his $1,500 federal student loan — for 29 years.

Paul Aker was arrested at his home and later brought before a judge to sign a payment plan for a loan he said he borrowed in 1987.

“I was unaware of any outstanding debt,” Aker told CNNMoney on Tuesday. “I paid two other student loans and thought I had consolidated everything and paid it all off.”

The U.S. Marshals Service made several attempts to serve Aker with a court order requesting that he appear in federal court and searched numerous known addresses, the agency said in a statement. The Marshals Service said it spoke with him by phone in 2012 requesting he appear in court, but he refused.

Aker told CNNMoney that he does not remember having that conversation, and said that he hasn’t received any notification about the outstanding loan in a long time.

A judge issued a warrant for his arrest in December of 2012 after he failed to appear in court, the Marshals Service said.

On Friday, Aker was approached by two Marshals outside of his home when he went to check his mail. Things quickly escalated when they attempted to arrest him.

“I went inside to get my gun because I didn’t know who these guys were,” he told CNNMoney.

The two Marshals requested backup after Aker said that he was armed. After about two hours, he put the gun down and went outside, where he was arrested without further incident, the Marshals Service said.

“I saw some local police officers outside and thought if they’re here, this must be real,” Aker said.

The original loan was for $1,500, and with interest it now amounts to about $5,700. He said he agreed before a judge on Friday to start paying in installments of $200 a month immediately.

“I’m still shaken,” Aker said. “Why send seven guys with guns about a student loan?”

It is not uncommon for U.S. Marshals to serve summonses to people who fail to appear in court regarding outstanding federal student loans. In Houston — where Aker was arrested — warrants have been issued for about 1,500 people in this situation.

But former students get many chances to start repaying a federal loan before U.S. Marshals knock on the door.

Here’s what typically happens after someone misses a payment:

After 90 days, a loan becomes delinquent, and possibly damages the borrower’s credit score.

But it’s not considered to be in default until 9 months go by without payment. By this point, the borrower should have heard from the lender several times. But if the borrower still doesn’t pay, a collection agency steps in, which will also probably contact the former student.

The borrower’s wages can be garnished and the government can withhold a tax refund.

The collection agency can then sue the borrower, though it doesn’t have the authority to arrest them. But if the debt is still ignored and the person fails to appear in court, then a judge could issue a warrant for arrest. That’s where the U.S. Marshals could come in.

At this point, a borrower will owe a lot more than the principal as interest, late fees, and collection fees add up.

At the end of 2014, there were 43.3 million Americans with student loans who owe a total of $1.3 trillion. About 11% are in default, which means they failed to pay for more than 9 months, according to the New York Federal Reserve.

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3 thoughts on “Man arrested for unpaid $1,500 student loan

  1. My grown son took out (without telling me, but he never liked my wisdom of the ages anyway) a student loan to pay for his master’s degree and now his debt is growing (thanks to interest, that insidious institution) faster than he can pay it off. I just hate to pay interest, and have arranged my life so that if I can’t pay cash, I just wait until I can, or don’t buy the whatever at all. I don’t think I’ve paid any interest, other than on my house loan, in more than 20 years. So I don’t have a Cadillac. It would just be the bank’s Cadillac anyway, not really mine.

    Liked by 1 person

    1. I wish (WISH) our society was structured so that it was possible to not to go into debt and still afford a house, an education (which can lead to a job), a mode of transportation, and a family.

      I’m similar to you in terms of not wanting to buy things on credit, but because of the low wages I’m paid that would mean I could never own a home or a car or afford to have children.

      Another common reason people go into debt: unaffordable medical costs. It goes without saying that needing medial attention sometimes is unavoidable–and we can’t all afford the costs on our wages, which could lead to debt, bad credit, and/or bankruptcy.

      Liked by 1 person

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