Wait...so your wife just had a baby and is going to go back to school now? Although she already owes student loans from her education in India that she has defaulted on?

Is your wife going to take out a financial aid student loan and use a lender? If so, she can request a financial aid refund. She should use that refund money from her current education loan, to repay her defaulted student loan in India off. She can do that over 4 semesters since she'll get a refund check every semester.

Kudos to you for practicing assertiveness skills with your wife. Keep practicing. It will get easier each time you assert yourself.