Expert: Timmy Chou - 6/28/2010

Question
Hello I graduated from college in 1991 and have more than doubly paid my loan off with interest, maybe even triple paid it off. I have been unemployed for 9 months, yet just recently gained employment from a low paying job,(all I could find)- My balance has barely moved and is still hovering around $18,000, is there any way of negotiating with these thieves, since they have made their money over 3x's already!!! I cannot keep up with these payments and I have EXcellent credit I do not want destroyed!

Answer
Thank you for your question!

As I always advise questioners, mediators act as neutral third parties to disputes and never "get involved" in judging the merits of conflict, but merely use special techniques to help the parties decide how to negotiate their own settlement.

I am not an attorney and cannot give you legal advice but can respond from my management and consulting experience.  Note that this issue may certainly have legal ramifications and you may wish to consult an attorney.

You may wish to consult your college's financial aid office to review your loan and see if something funny is going on with it.  Also you could check with your state's consumer protection office.  If the loan is a rip-off you may be able to file a criminal charge.

Beyond these ideas I think it is not likely that you will be able to do much without legal help -- organizations, especially banks, make poor mediation parties.

These are some ideas.  Feel free to follow up with additional questions.

For your general information, the pros and cons of the types of dispute resolution methods follows.

GOOD LUCK!

Arbitration, Mediation, and Litigation

Arbitration: the referral of a dispute to one or more impartial persons for final and binding determination outside of the judicial system

Benefits of Arbitration:

 Confidential, no public record
 Limited exchange of documentation, information
 Quick, don't have to wait for a court date
 Arbitrators have expertise in the subject matter and are trained in conflict resolution
 Cheaper than litigation
 Preserves business relationships

Negatives of Arbitration

 It's often a compromise, no 100% winner
 Complex arbitration can be costly
 If not satisfied, may litigate the arbitration procedure
 Poor results with an unskilled arbitrator
 Both parties must agree to cooperate in the process

Mediation: the process by which parties submit their dispute to a neutral third party (the mediator) who works with the parties to reach a settlement of their dispute.

Benefits of Mediation:

 Neutral mediator can objectively suggest alternatives not considered before
 Parties are directly engaged in negotiating the settlement
 Can be quicker than litigation
 Less costly than litigation
 Preserves business relationships
 85% of American Arbitration Association cases mediated find successful solutions

Negatives of Mediation

 may not reach a binding decision
 unskilled mediator

Litigation: using the judicial system to resolve disputes

Benefits of litigation:

 a clear winner and loser
 uses a prescribed set of procedures
 more predictable outcomes
 is final

Negatives of Litigation:

 waiting for court dates can do more harm
 usually more expensive than mediation and arbitration
 part of the public record