Student loan repayment has become more complicated over the past 10 years. Whether you’re a borrower, a parent, or a co-signer of a student loan, you face an increasingly complex set of choices when it comes to paying off your educational debt.

The ever-increasing cost of higher education forces more people to rely on student loans. Limits on federal borrowing leave most students and families to use private student loans to bridge the financial gap. As a result, graduates enter the workforce with tens of thousands of dollars in debt spread out over dozens of different types of student loans, each offering unique repayment options.

For most borrowers, it’s no longer possible to pay off the entire student loan balance over a few years. The complexity of the system requires a more mindful and intentional way to manage student loan repayment.

Here are a few of the rules I use when helping student loan borrowers construct an effective repayment strategy.

Start Repaying Student Loans Immediately

When you finish school, you get an automatic grace period before your federal student loan payments begin. Though you don’t receive monthly bills during this time, interest continues to accrue on all but the subsidized portion of your federal student loans. By starting to pay your loans immediately, you can finish paying more quickly and cut six months of interest.

Rather than opting out of the grace period, make voluntary payments, so you can direct your money to unsubsidized loans and those that carry a higher interest rate. This allows you to put your money where it will provide the maximum benefit.

Avoid the Standard Repayment Plan

When you enter repayment on your federal student loans, the servicer will put you into the standard 10-year repayment schedule unless you make a different choice. Though the standard repayment plan provides a consistent monthly bill, the lack of flexibility means any change in your finances will likely cause you to fall behind on payments.

Rather than taking that risk, federal student loan borrowers should review the available Income-Driven Repayment plans and pick the one that best meets their needs. These plans adjust your monthly federal student loan payments based on your taxable income and family size. Income-Driven Repayment plans also offer automatic forgiveness of any balance remaining unpaid after 20 or 25 years.

Your income will likely be relatively low when you first enter repayment, so payments under an Income-Driven Repayment plan will also be modest. This allows you to direct more money to private student loans that don’t offer such flexibility.

Focus on Paying Private Student Loans

If you haven’t realized it by the time you get your first bill, private student loans come with no protections and offer the worst terms. Not only are interest rates higher for private loans, but lenders also offer no Income-Driven Repayment options, no forbearance or deferment, and no opportunities for loan discharge.

That’s why you need to pay those private student loans as fast as you can. In fact, every spare dollar you have should go to the private student loan company.

Though your credit score and income history may not be sufficient to refinance right away, revisit that option every year. For people who qualify, refinancing may lower the interest rate and improve repayment terms.

Understand How Tax Filing Status Impacts Student Loan Repayment

If you’re in an Income-Driven Repayment plan for your federal student loans, remember the monthly payment is based on your family size and taxable income.

For married borrowers, taxable income includes your spouse’s earnings when filing joint federal income tax returns. However, some Income-Driven Repayment plans use only your income when you file separately. Therefore, many student loan borrowers choose to file separate federal income tax returns to keep their spouse’s income out of the calculation.

Filing separately, however, may negatively impact your household’s total federal income tax liability. In addition, if your spouse also has federal student loans, filing separate tax returns may even increase your monthly payments.

When creating a client’s student loan repayment strategy, I review their federal income tax liabilities based on separate and joint filings. In doing so, we can ensure they’re not trading a lower monthly student loan bill for a larger tax bill.

Consider Jobs Offering Student Loan Forgiveness

Public Service Loan Forgiveness may allow you to qualify to have your unpaid federal student loan balance forgiven after 120 months of repayment. Couple that forgiveness with the lower payments of an Income-Driven Repayment plan, and you end up paying far less than the total balance of your federal student loans.

PSLF may be the best-known program that offers federal student loan forgiveness, but it’s not the only one. Federal and state forgiveness programs exist for many professions, and some employers provide their own student loan repayment options. By investigating all your options, you may end up saving a significant amount of money over the long run.

Review Your Student Loans Each Year

It’s dangerous to choose a student loan repayment option and expect it will always be the most appropriate one for your needs.

Relying on an outdated plan to manage your student loan payments can cost you thousands of dollars and prevent you from accomplishing your goals.

Imagine you entered Income-Driven Repayment for your federal student loans in 2014. At the time, you may have chosen Income-Based Repayment because it offered you the lowest monthly payment. However, you may have missed Revised-Pay-As-You-Earn, a new Income-Driven Repayment plan, became available in 2015.

Repayment plans and forgiveness options change, income and family dynamics evolve, and your financial goals shift based over time. So be sure to include your strategies for managing your student loan payments in those changes to avoid missing something important.

Repaying Student Loans is Simpler With a Mindful Strategy

Worrying about your student loans all the time makes it more likely that you’ll doubt your decisions. Instead, research your options with a reliable professional who has experience in managing student loan payments. Keep your focus on the goal of getting out of debt. Remember that your plans will change over time.

By laying the groundwork now, you can create a plan for paying off your student loans intentionally and mindfully.

QUICK ANSWER: Your wages can be garnished if you are in default on your federal student loans. The loan holder doesn’t need to file a lawsuit or get a judgment against you before starting a wage garnishment for a federal student loan. However, the loan holder needs to sue you in court for defaulted private student loans and get a judgment before starting a wage garnishment.

Millions of people default on their student loans each year, victims of an overpriced education and wages that barely allow them to make ends meet. Hobbled with sinking credit scores, as well as daily calls and letters from debt collectors, they live in fear of the possibility of wage garnishment.

If you’re in default, here’s what you need to know about student loan wage garnishments.

Can Wages Be Garnished for Student Loans?

The holder of your federal student loans can garnish your wages without filing a lawsuit or getting a judgment against you. Under the Higher Education Act and the Debt Collection Improvement Act, federal student loan holders can use an administrative process to begin and continue a wage garnishment. Though some states place restrictions on wage garnishment or prohibit the practice entirely, those restrictions don’t apply to federal student loan administrative wage garnishments.

However, private student loan collectors can begin a wage garnishment against you only by using the judicial process available in your state. For most people, this means the collector needs to file a lawsuit in court and obtain a judgment before your wages can be garnished.

How Much Can Wages be Garnished for Student Loans?

Under the Debt Collection Improvement Act, an administrative wage garnishment can be used to withhold the lesser of 15% of disposable income or an amount exceeding thirty times the minimum wage in your state. This means that you can keep an amount equal to thirty times the minimum wage.

If you are subject to administrative wage garnishments for multiple defaulted federal student loans, Federal law limits total garnishments to 25% of your total disposable earnings.

Wage garnishments by private student loan collectors are controlled by state law.

What is Disposable Pay?

“Disposable pay” is defined by federal law as your employment compensation remaining after deducting amounts required by law to be withheld.

Those deductions include Social Security taxes and withholding taxes but not any amount withheld under a court order such as child support or restitution.

This definition of disposable pay also does not consider deductions for retirement plans, health insurance, or any other voluntary deduction.

Can 1099 Income be Garnished?

Wage garnishment involves withholding earnings paid to an employee by an employer – in other words, payments received from a paycheck with deductions for federal, state, and local taxes. Unfortunately, creditors and collectors can’t garnish income received by independent contractors and freelancers because 1099 income isn’t technically considered wages.

Suppose you’re self-employed, an independent contractor, or a freelancer. In that case, you should understand the other enforcement mechanisms available to holders of defaulted federal and private student loans. Wage garnishment is only one of many available tools to force payment.

Avoid Student Loan Garnishment

Student loan holders will start garnishing wages when you default. Still, there are ways to avoid this situation by understanding your options.

Income-Driven Repayment plans make it easier to pay your federal student loans on time.

You may be able to apply for deferment or forbearance.

Consolidation and rehabilitation are simple ways to get get your federal student loans out of default.

Depending on the type of loan, student loan settlement can resolve the debt quickly while also reducing the balance.

Bankruptcy may also provide some relief by allowing you to manage your student loan payments under court supervision or by discharging your student loans entirely.

When faced with defaulted student loans, speak with a student loan lawyer like me who understands the full range of solutions available to you. Once you review your options, you’ll be able to choose the best way to avoid student loan garnishment.

QUICK ANSWER: A judgment is a court order that decides a lawsuit. A collector who wins a judgment against you is no longer required to prove the debt and can take steps to force you to pay.

If you don’t pay a debt, the creditor will try to get you to voluntarily pay. Lenders will call and send letters, hire debt collectors, and leverage your fear of poor credit as a way of convincing you to resolve the account.

Regardless of the amount of pressure employed, however, paying a debt is purely voluntary. Nobody is going to physically force you to withdraw money from your bank account. You either pay the bill or not.

Your choices become more limited once a collector gets the court system involved in the process. A collection lawsuit submits the issue to a judge who decides whether you owe money to the creditor and, if so, the exact amount due.

A judgment is the court’s final decision as to the outcome of litigation. This signals the end of the case and provides the last word on liability.

There is nothing to argue about once the court issues the judgment.

The Road to Judgment Begins With a Lawsuit

A judgment is the end-product of a lawsuit. Though collectors would like you to believe otherwise, there’s no way to shortcut the process and get a judgment against you without first filing a case. And a lawsuit comes with precise procedures and timelines.

Someone begins a lawsuit by filing a Summons and Complaint; the legal term for this person (or company) is the Plaintiff. The Plaintiff must also deliver copies of these documents to the person or people being sued; this is the Defendant.

The Defendant is required to file a response within a short period after receiving the Summons and Complaint. It is at this point that the case enters into the discovery phase of litigation.

Three Ways to Get a Judgment

A collector can get a judgment against you after trial or as the result of a negotiated settlement. The most common outcome, however, is a judgment based on a failure to respond to the lawsuit. Though the method of obtaining a money judgment may vary, the impact is the same.

Judgment After Trial: A lawsuit ends with a trial heard by either a jury or simply a judge. After hearing all of the evidence presented by the Plaintiff and Defendant, the judge or jury decides the case. That decision is recorded as a judgment.

Consent Judgment: The parties to the lawsuit are always free to negotiate a settlement at any point in the process, and courts usually encourage this form of voluntary resolution. However, if both sides agree, the terms of that settlement are typically finalized as a consent judgment.

Default Judgment: When someone begins a lawsuit, but the other person doesn’t respond within the time permitted to law, the judge will decide the case based solely on the claims made in the Complaint. The resulting judgment is called a default judgment.

The Impact of a Judgment

Before filing a lawsuit against you, a creditor gets paid if they can get you to do so voluntarily. Winning a judgment removes the element of choice, giving the collector the ability to force payment.

The most common enforcement mechanisms are wage garnishment, seizing bank accounts, and putting a lien on real estate and personal property. In some situations, a judgment creditor may also be able to get your driver’s license or professional license suspended.

California’s community property laws also allow the creditor to collect it to satisfy a judgment against either spouse if you’re legally married.

When Faced With a Judgment, Act Immediately

Though a judgment finalizes your liability to pay a debt, it doesn’t need to cause financial ruin. Options such as settlement, voluntary repayment, and bankruptcy can help you recover from the financial burden so you can move on with your life.

Talking with a lawyer can help you understand your options and quickly create a plan to deal with the judgment. If you’re interested, reach out to me so we can review your choices.

If you’re in debt, you’ve got choices. To decide your best path forward, it’s important to review all of the alternatives carefully and weigh them against your goals.

In this episode of the Money Wise Law Podcast, Jay Fleischman and Gene Melchionne talk about your debt relief options to help guide you towards your ideal solution. If you think you know where this conversation ends up – think again.

People who want to discharge their student loans in bankruptcy confront a variety of challenges. Not only are borrowers required to meet an often tricky standard, but courts are also split in the ways they apply that standard.

In the case of McCoy v. United States, a student loan borrower requested that the U.S. Supreme Court resolve that split to provide a more straightforward path for borrowers to follow. Though the Court refused to do so, the case highlights an essential part of the student loan bankruptcy debate.

The student loan borrower in the case, Thelma McCoy, enrolled in college in her 40s and received her bachelor’s degree. She then obtained a master’s degree in 2006 and a Ph.D. in 2014. By the time she’d completed her education, Mrs. McCoy had borrowed $175,000.

Due to injuries sustained while working towards her Ph.D., the Texas resident said she could not find employment. She consolidated her federal student loans and entered into an Income-Driven Repayment plan, bringing her required monthly payment to $0 based on her low income. Seeing no reasonable likelihood of a change in her financial situation, McCoy filed for Chapter 7 bankruptcy to discharge her student loans, which had grown with interest to approximately $350,000.

Discharging Student Loans in Bankruptcy – A Tale of Competing Standards

The U.S. Bankruptcy Code allows student loan borrowers to discharge their educational debts only after proving that repayment would cause “undue hardship.” Student loan discharge is further complicated because courts are deeply divided on determining what constitutes “undue hardship.”

Most bankruptcy courts employ the so-called Brunner Test, named after the New York bankruptcy case that established a three-part test to determine undue hardship. Under this test, established in 1987, a debtor seeking to discharge student loans in bankruptcy must prove all of the following:

1. that [she] cannot maintain, based on current income and expenses, a ‘minimal’ standard of living for herself and her dependents if forced to repay the loans;
2. that additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and
3. that [she] has made good faith efforts to repay the loans.

Some bankruptcy courts have adopted an approach that considers the totality of the circumstances of each debtor’s situation. Using this analysis, the court will discharge a borrower’s student loans if their future financial resources are unlikely to cover payment of the student loans while still allowing for a minimal standard of living.

The totality of the circumstances test is applied only by bankruptcy courts in North Dakota, South Dakota, Minnesota, Nebraska, Iowa, Missouri, and Arkansas.

A Failed Attempt at Uniformity

By filing for bankruptcy in Texas, McCoy was subjected to the Brunner Test in proving her case for undue hardship. After being denied the ability to discharge her student loans, she appealed to the 5th Circuit Court of Appeals.

Finally, she sought a final appeal to the U.S. Supreme Court. Her goal wasn’t a wholesale change in the bankruptcy laws, merely a resolution to the inconsistent standards used to prove undue hardship.

Unfortunately, the U.S. Supreme Court declined to hear the case. In doing so, it failed to bridge the gap and allow a uniform standard to apply to this critical issue. As a consequence, the split among the courts remains in place.

For student loan borrowers in states using the totality of the circumstances approach, the road to discharging student loans in bankruptcy continues to look different than for those in jurisdictions using the Brunner Test.

How to Decide Whether to File a Student Loan Bankruptcy

The decision to seek a discharge of your student loans in bankruptcy begins by understanding how your court approaches the issue of undue hardship. The standard your federal circuit uses to determine undue hardship is the lens through which any further analysis must be seen.

Your lawyer should also recognize judges each have unique perspectives, which come through in every ruling and decision. Whereas one judge may apply the standard more favorably to the borrower, others may be less likely to do so.

Ultimately, your chances of winning a student loan bankruptcy discharge depend on the facts of your case, as they are likely to be seen by the judge.

Bankruptcy Isn’t the Only Strategy

It’s tempting to look at bankruptcy as the best way out of your student loan problem, but that’s not always the case.

Betsy McCoy, the borrower in the Texas case, is 63 years old. She is enrolled in an Income-Driven Repayment plan that obligates her to pay $0 each month towards her federal student loans. By her admission, her income is unlikely to increase in the future. Here student loan payment will likely remain at $0 for the duration of her enrollment in Income-Driven Repayment.

Ms. McCoy’s unpaid federal student loan balance will be forgiven after 25 years in Income-Driven Repayment. At that point, she’ll be well into her 80s. Current tax law requires the issuance of a Form 1099 for the forgiven balance, which means she may be required to pay income taxes on that amount.

The prospect of a massive tax debt understandably scares many borrowers, but consider the following:

• the tax laws may change before forgiveness and eliminate the potential “tax bomb”;
• there are ways to exclude forgiven debt from taxable income;
• the bankruptcy laws may change to expand the ability to discharge student loans; and
• federal student loans are discharged on the death of the borrower.

For those reasons, leveraging the benefits of Income-Driven Repayment may be more cost-effective and provide greater certainty of outcome than pursuing a student loan bankruptcy. Talking with an experienced student loan lawyer with significant bankruptcy experience can help you be sure to make the right decision for your long-term financial goals.

Why is discharging student loans in bankruptcy falsely portrayed as being impossible?

A quarter of a million people with student loans file for bankruptcy each year, yet only a small number seek to discharge their educational debt. Recently Villanova University School of Law Professor Jason Iuliano examined what he called the Student Loan Bankruptcy Gap to understand this phenomenon.

In this podcast episode, Gene Melchionne and I discuss the costs of bringing a student loan bankruptcy discharge case, how the mechanics of the process make it more daunting for bankruptcy lawyers and borrowers alike, and closing the Student Loan Bankruptcy Gap to provide debt relief to millions of individuals.

For New Yorkers with private student loans, here’s a tiny bit of relief related to the coronavirus pandemic.  It’s not as comprehensive as the federal student loan relief  in the CARES Act, but  something is better than nothing.

You’ve read enough articles reminding you of the economic impact of coronavirus, so I’m not going to repeat it all. And you already know about the student loan relief contained in the CARES Act.

With the intent to respect your time and intelligence, here’s the summary of what you need to know:

• The New York State Department of Financial Services (DFS) reached an agreement with Navient, Nelnet, PHEAA, MOHELA, and other private student loan holders to give private student loan relief to New York residents impacted by the coronavirus pandemic.
• This agreement covers private student loans only and doesn’t impact any federal student loans or other types of debts.
• To obtain relief under this agreement, borrowers need to contact their student loan servicer – it is not automatic.

What private student loan relief is available?

The private student loan relief agreement took effect on April 7, 2020, is available to all current New York residents, and includes the following:

• You will be given a minimum of 90 days of forbearance, so you don’t need to make any private student loan payments during that time;
• You will not be charged a late fee if you don’t make your payment on time;
• The student loan company won’t report any past due payments to the credit reporting agencies;
• If you default on a private student loan, the account won’t be sent to a third-party debt collector for 90 days;
• Your student loan company will contact you to inform you of relief that is available for borrowers impacted by COVID-19, will post the information on their website, and ensure customer representatives are aware of and capable of informing and discussing all available repayment options related to COVID-19; and
• If you miss a payment, the student loan company will get in touch to review your status and available choices.

This agreement builds not only on the CARE Act but also on New York State’s decision to temporarily halt the collection of defaulted student debt owed to the State of New York for a minimum of 30 days.

Remember that you’ll need to call your student loan servicer. The servicing companies have also pledged to get in touch with borrowers. Still, I don’t recommend sitting around any waiting for the phone to ring – if you want something, you need to be willing to ask for it.

Click here for the state’s Guidance to New York State-Regulated Student Loan Servicers Regarding Support for Borrowers Impacted by the Novel Coronavirus (COVID-19). You can also read the press release by clicking here.

Remember that relief is temporary

As I said before, this relief program is better than nothing – but it’s also nothing to cheer about.

The New York State agreement is valuable because it takes some of the pressure off private student loan borrowers, but it’s not permanent relief. You’re not getting a lower interest rate, nor is any of your debt being forgiven. And once the assistance ends, you’re going to need to figure out a way to make your payments.

If you can continue to make your private student loan payments, then you should do so. And if you’re in default or think you might fall behind in the coming months, use this time to start investigating possible solutions and deciding your best course of action.

New Yorkers with a court judgment against them can use bankruptcy to their advantage. Without some additional work, however, the problem isn’t solved.

Collectors file over 130,000 lawsuits for unpaid debts each year in New York State. Over 95% of these debt collection lawsuits are unopposed, allowing the collector to obtain a default judgment against the consumer for the full balance due.

These default judgments, which take away the right to contest the debt, remain valid under New York law for 20 years and allow the collector to force payment through wage garnishments and seizing bank accounts. Though these actions can cause the cash-strapped borrower extreme financial hardship, the bankruptcy laws provide a way to put consumers back in control.

Filing for Bankruptcy Usually Stops Enforcement of the Judgment

Filing for bankruptcy invokes something known as an automatic stay, which prevents creditors from taking continued action against you. With limited exceptions, enforcement of existing judgments halts as part of the automatic stay.

If you’re in debt and subject to a judgment, invoking the protection offered by the bankruptcy laws turns off the financial pressure of a wage garnishment or frozen bank account so you can start to rebuild your finances.

Depending on the type of bankruptcy case, you may repay a portion of your debts on more flexible terms or discharge them entirely. Either way, the law allows you to prevent the collector from putting you in a worse financial situation.

Avoid Judgment Liens in Bankruptcy for Permanent Protection

A judgment is a piece of paper issued by a judge and attaches as a lien to all the property you own. Filing for bankruptcy prevents that judgment from attaching itself to anything new, but it’s already latched firmly onto everything you owned when your bankruptcy was filed. Without further action, the creditor can continue enforcing the judgment against the property you owned at the time of your bankruptcy filing.

If the law allows you to protect your property in bankruptcy, you can avoid the judgment lien by filing a motion with the court and obtaining a court order. This motion, permitted under Section 522(f) of the U.S. Bankruptcy Code, applies to the following:

• liens as a result of court judgments (other than those in connection with a domestic support obligation); and
• nonpossessory, nonpurchase-money security interests in any personal property.

Avoiding judgment liens may sound complicated, but the additional work and time involved are borne mainly by the bankruptcy lawyer. So long as your attorney performs a complete analysis of your situation before filing the case, it’s unlikely that avoiding the judgment lien will cause any delay.

Discharge the Judgment to Ease Your Mind

Discharging the debt in bankruptcy eliminates your personal liability for repayment. Avoiding the judgment lien frees your property, making your fresh start complete. Neither of these actions, however, updates the judgment to reflect that you no longer are responsible for payment.

The bankruptcy court didn’t issue the original judgment; though the bankruptcy rendered it virtually useless, nobody would know that unless they specifically searched the bankruptcy court records. Without further action, a potential creditor doing a judgment search against you could, therefore, assume you still owe the money.

The problem comes up most often as a result of a title search performed during the purchase or sale of real estate. The judgment shows up as being outstanding, and the deal stalls until the records are updated. The party who filed for bankruptcy has to find their bankruptcy attorney, court documents have to be reviewed by the title company, and everyone ends up doing more work than necessary.

In New York, the law provides consumers with a simple way of ensuring the public records are updated. Under New York Debtor and Creditor Law 150, the bankruptcy filer can make a motion for an order directing that the judgment be marked as discharged. So long as the bankruptcy discharge is over a year old, the court grants the motion readily.

Other states may have similar laws in place. For those that do not, it’s a good idea to contact the collector’s attorney after the bankruptcy to have them voluntarily mark the judgment as discharged.

Cover Your Bases Now to Reduce Stress Later

Bankruptcy can be a relatively simple process, but even the most straightforward case presents opportunities to make mistakes. By taking the time necessary to fully understand all of the issues at the beginning of the case, you can make your life more comfortable in the future.

Student loan borrowers and advocates are calling for a student debt strike as a way to force a change to the system. Though the frustration is valid, here’s why I’m not convinced that a debt strike is the best way to reform the student loan system.

When confronted with a problem, most people try to find a solution. When all the options seem too complicated, and resources are difficult to trust, it’s not unusual to give up. That’s what we’re seeing when it comes to student loans – borrowers, figuring they’re in a no-win situation when it comes to their educational debts, are just walking away.

The phenomenon has been gaining traction for several years and was covered in a CNBC article discussing the Debt Collective’s efforts to mobilize a student debt strike as a way to force the government to cancel all student debt. Though the official strike is tiny (as of this writing, the website’s live tracker shows a mere 558 people have declared themselves as part of the movement), the real goal is to highlight the fact that nearly 30% of student loan borrowers are already in delinquency or default on their debts.

In fact, according to the co-founder of the Debt Collective, an unofficial strike is already taking place.

I understand that mass action is often required to shine a light on systemic injustice. And right now, there’s a whole lot of injustice built into the way we pay for college. Schools treat students as sources of revenue, increasing costs of attendance by selling a dream of mass prosperity that has long ceased to exist. An undergraduate degree, long touted as a ticket to a brighter future, is now so common that it holds little value in the job market.

Before you read the rest of this article, bear in mind that I an an advocate for student loan borrowers. I believe the system is broken and needs to be dismantled so that a more equitable one can take its place.

That said, I can’t help but wonder whether there’s a better way for student loan borrowers to effect change.

The government can force you to pay

If you think mass student loan default will inflict financial harm on the government, you’ve got another thing coming. It doesn’t matter if nobody pays voluntarily – federal laws give Uncle Sam many ways to get his money.

When you fall behind on your student loans, you have approximately 9 months to catch up before the loan goes into default. You’ll get annoying letters and phone calls but, aside from late fees and negative marks on your credit reports, the financial impact is limited. If you can’t make a student loan payment, then you probably aren’t in a position to take on a mortgage, car loan, or other debt anyway.

Once you default on a federal student loan, the balance of power changes. Federal regulations allow the government to tack collection costs of up to 25% of the total balance onto the loan, and interest continues to accrue every day the debt remains unpaid. Your wages can be garnished without a court judgment and minimal prior notice. Your tax refunds can be taken (if you file a joint return with your spouse, a portion of the refund may be recoverable). You can lose part of your Social Security benefits. If all else fails, the government can sue you for the unpaid balance and use the resulting judgment to put a lien on any real estate you own and even force a sale.

As if things couldn’t get worse, there’s no statute of limitations on federal student loan debt – which means you could be dealing with this problem for the rest of your life.

Tomorrow’s student loan legislation may never happen

Yes, there are proposals in Congress that will change the student loan system.

Yes, the White House has ideas about student loans.

Yes, the next President may take action that will make student loans a thing of the past.

Yes, courts may eventually ease limitations on the discharge of student loans in bankruptcy.

Or not.

The law doesn’t change without a bill passed by both houses of Congress and signed by the President. Some say that student loan forgiveness can happen based on the President issuing an Executive Order, but such an action would squander an enormous amount of political capital. Regardless, any significant change is going to require a lot of cooperation and compromise by groups not known for collective action.

Meanwhile, the clock continues to tick on your loans. The balance rises, the damage increases, and your financial stability crumbles.

Do you really want to bet your future on an outcome that’s entirely out of your control?

Maximize your position while working for change

Yes, the student loan system is broken. College is too expensive, for-profit operators defraud students without any action by the Department of Education, and collectors approach their jobs with sadistic glee. Dreams of a bright future have been replaced with nightmares that last a lifetime.

The system needs to change, but engaging in financial self-harm makes us weaker, not stronger.

A student loan strike subjects borrowers to more significant financial pressures, which limits their ability to contribute to candidates who will advocate on their behalf.

Voluntary student loan default increases the risk of a wage garnishment, which may make people less likely to work as salaried employees. This, in turn, reduces tax revenue and strengthens the government’s position that forgiveness is too costly.

People who intentionally default on their student loans are seen in a negative light, which turns potential allies into adversaries.

A far better option is to use income-driven repayment options to lower student loan payments. Borrowers in default should look to rehabilitation and consolidation as ways to avoid collection costs and enforcement mechanisms. Everybody should take the time to understand all their options for long-term student loan forgiveness.

Use the student loan system for your benefit so you can strengthen your financial positions, and better understand necessary changes. In doing so, you can create a foundation for needed reforms without inflicting harm on yourself, your family anf your financial future.