I can help with your Student Loan(s)

[Guest KristofsMom]

I called Sallie Mae and they had no clue what I was talking about when I asked if I could rehab a loan, and make payments for 9 to 12 months. Also is it best to consolidate or rehab a loan(s)

 

 

Really? I'm still stumped on this! I'm trying to help my Step Son with this problem. He called his school and they told him THEY have never heard of any program that will allow you to Rehab for a second time

[SloanHelper]

@cosmos human.

 

It is based on your agi from your 1040. Yea all forms of monetary gain, even ask, is income

[SloanHelper]

It all depends on when the loan was rehabbed the first time. If it has been before 08/2008 or after 08/2008. Before can rehab again, after cannot.

[BinaryMan]

SloanHelper, I have a concern. It's clear that the government wants to limit student loan payments to 10-15% of take home pay (approx) with the IBR program. However, private student loans are not included in this. So I faced a situation where I was unable to pay even partially on Sallie Mae private loans (true private, not cost of attendance gap private; the loans were in excess of cost of attendance) and they do not negotiate. It's been over a year and eventually I must assume they will attempt to try to get a garnishment for 25% (if incredibly lucky, they will sell the debt to a JDB and I'll be able to stand a chance to fight it, but Sallie Mae is smart and I don't think they will do that).

 

I am unable to invoke the IBR program because if this garnishment comes to pass, I would now be paying 35-40% of my income to student loans, but if I default on the federal loans then the 10-15% garnishment will take precedence over the private, and the total will still be 25%. You see the problem here. Right now I have to do forbearance constantly on the federal loans until the private loans pass SOL or get sold off , but I have no financial incentive not to default if a garnishment for private loans hits; yes I know they can do this and that to me but most of it isn't really going to affect me (nothing to tax lien, can control the tax paid and returns so they have nothing to take).

 

Ultimately all I can really do is try to save up and to settle for 110% of the original principal , which I hear is the lowest Dept. of Ed. will settle for. $125k of federal loans (probably 90-100k originally) between my wife and I and $100k of private, it's really not sustainable since the federal at 6.8% is almost as bad as the private at 9% and I want to see an end to it one day, not a lifelong battle because I overpaid for school and got a subprime loan.

 

What can the Department really do in this kind of situation ? They don't have the authority to displace part of the 25% as part of a "voluntarily" arrangement do they ?

 

Also, if a BK eventually results, www.finaid.org/questions/bankruptcylimitations.pdf describes a "qualifying student loan" (one that is non-dischargable) as being the federal + private loans that are generally school certified and max at the cost of attendance. The uncertified private loans that never went through the school, and are in excess of the cost of attendance, are they *really* student loans and are they really exempt from discharge ? It seems to me, after reading that document and the intent (to protect federal funds), that Sallie Mae Tuition Answer loans are in fact dischargable. What bothers me is the apparent lack of consistency with judges in actually identifying it as such when it should be an obvious matter given the law cited in that document.

[Guest KristofsMom]

It all depends on when the loan was rehabbed the first time. If it has been before 08/2008 or after 08/2008. Before can rehab again, after cannot.

 

 

Thanks for the reply... However, when he called his university they told them they have NEVER heard of anything like this. Maybe they just don't know. Can you please give a link to suppourt this or what the name of this process/program is called so I can do some due diligence this matter?

 

Thanks in advance for your help

[Guest KristofsMom]

It all depends on when the loan was rehabbed the first time. If it has been before 08/2008 or after 08/2008. Before can rehab again, after cannot.

 

 

Thanks for the reply... However, when he called his university they told them they have NEVER heard of anything like this. Maybe they just don't know. Can you please give a link to suppourt this or what the name of this process/program is called so I can do some due diligence this matter?

 

Thanks in advance for your help

[Guest KristofsMom]

It all depends on when the loan was rehabbed the first time. If it has been before 08/2008 or after 08/2008. Before can rehab again, after cannot.

 

 

Thanks for the reply... However, when he called his university they told them they have NEVER heard of anything like this. Maybe they just don't know. Can you please give a link to suppourt this or what the name of this process/program is called so I can do some due diligence this matter?

 

Thanks in advance for your help

[Guest KristofsMom]

Hummm

 

Has SloanHelper let the building?

 

I never got an answer at all??

[New2repair]

I paid off my student loans months ago. Now they are showing up as new collections with past due balances. I have a letter from DOE saying my loans are paid in full. Any recourse here?

 

Hummm

 

Has SloanHelper let the building?

 

I never got an answer at all??

[LynnInMN]

It all depends on when the loan was rehabbed the first time. If it has been before 08/2008 or after 08/2008. Before can rehab again, after cannot.

 

 

Thanks for the reply... However, when he called his university they told them they have NEVER heard of anything like this. Maybe they just don't know. Can you please give a link to suppourt this or what the name of this process/program is called so I can do some due diligence this matter?

 

Thanks in advance for your help

 

To my knowledge and from my experience dating back to wayyyy before 2008, you could only ever rehab once. You could attempt the 9 payments as many times as you wanted, but you could only rehab once...a one shot deal.

[OnTime]

To the OP....I just posted a thread seeking help/advice. Maybe you can shed some light on my situation....

 

Hi everyone. So, I've read all the newbie information and I have a very dire, unique and nauseating situation.

 

I have a very poor, 579 credit score and a vantage rating of F.

 

I have no bankruptcies.

 

No foreclosures.

 

No auto repossessions.

 

BUT...I have $97,000 in student loans for undergrad, grad school and another undergrad associate degree.

 

And, what's worse is that I have several late pays on each loan because I was slow to report my employment status to Sallie Mae in between school programs...

 

I have always been eligible for some sort of deferral program for either being a student or being unemployed or both....but I didn't realize how vital it was to report these things to Sallie Mae immediately anytime my status was going to change.

 

BTW, I have $2000 in collections aside from this that is also bringing my score down. but the bulk of it is these student loans....and the fact that I have NO credit cards at ALL.

 

Since the SL late pays are the worst possible thing to remove from a report, what can I do to fix this? HELP.

 

P.S. The reason for so much schooling? because I haven't been able to find a full time permanent job in FOUR YEARS. So, with my unemployed time, I figured, I might as well go to school and firm up my skills. SMH! Now I'm a financial PARIAH!

[New2repair]

To the OP....I just posted a thread seeking help/advice. Maybe you can shed some light on my situation....

 

Hi everyone. So, I've read all the newbie information and I have a very dire, unique and nauseating situation.

 

I have a very poor, 579 credit score and a vantage rating of F.

 

I have no bankruptcies.

 

No foreclosures.

 

No auto repossessions.

 

BUT...I have $97,000 in student loans for undergrad, grad school and another undergrad associate degree.

 

And, what's worse is that I have several late pays on each loan because I was slow to report my employment status to Sallie Mae in between school programs...

 

I have always been eligible for some sort of deferral program for either being a student or being unemployed or both....but I didn't realize how vital it was to report these things to Sallie Mae immediately anytime my status was going to change.

 

BTW, I have $2000 in collections aside from this that is also bringing my score down. but the bulk of it is these student loans....and the fact that I have NO credit cards at ALL.

 

Since the SL late pays are the worst possible thing to remove from a report, what can I do to fix this? HELP.

 

P.S. The reason for so much schooling? because I haven't been able to find a full time permanent job in FOUR YEARS. So, with my unemployed time, I figured, I might as well go to school and firm up my skills. SMH! Now I'm a financial PARIAH!

 

 

Don't ever take out another student loan again. They are going to destroy an entire generation. How old are the collections? Get a couple of secured credit cards, and make your payments on your student loans. It's going to be a rough ten years. Move back home with your parents if you can, and pay off those loans. 100k in loans will blow up out of control if you do not pay them, and literally your life will be destroyed. They will haunt you forever, and years from now, they will end up being 180K. Get the secured card, pay your student loans, and in a few years your credit will recover.

 

I'm sorry, but there is not a single person here that can fix your situation overnight. It took years to accumulate this debt, its going to take years to pay it back. Forget about the few lates, they will go away over time. WOrry about paying that principle amount down, especially if you cannot even find a full time job.

 

 

[OnTime]

Don't ever take out another student loan again. They are going to destroy an entire generation. How old are the collections? Get a couple of secured credit cards, and make your payments on your student loans. It's going to be a rough ten years. Move back home with your parents if you can, and pay off those loans. 100k in loans will blow up out of control if you do not pay them, and literally your life will be destroyed. They will haunt you forever, and years from now, they will end up being 180K. Get the secured card, pay your student loans, and in a few years your credit will recover.

 

I'm sorry, but there is not a single person here that can fix your situation overnight. It took years to accumulate this debt, its going to take years to pay it back. Forget about the few lates, they will go away over time. WOrry about paying that principle amount down, especially if you cannot even find a full time job.

 

I'm old. SO, there's no moving in with the parents. I am a divorcee in my 40's who never got to go to school until after I got divorced and the kids got older. My oldest loan is 2007. So, they aren't that old. None of them are in collections at this time. They are all open loans...just they have late pays on them when I was in between programs and I believe it's possible my school may have reported some of my matriculation status to them late which led to at least one late pay on three loans. (Subsid, unsubsid, and a grad plus loan). I have an associates, a bachelors and three semesters of a professional degree and I cannot find a full time permament job. We have been on food stamps. I have worked every temp job I could find. $10 an hour. $12 an hour. $11 an hour. $14 an hour. Part time. Full time when it's available. I even did an UNPAID summer internship part time which just about killed me (but it was a program requirement).

 

I am not looking for an overnight fix. I have been trying like heck to invest in my future for years and years. Unfortunately, the economic downturn really affected me negatively.

 

All I am asking for is advice with which areas I need to work on first. So, thanks so much for your advice. I hope others will chime in.

[LynnInMN]

Have you consolidated with Direct Loans Consolidation???

[OnTime]

Have you consolidated with Direct Loans Consolidation???

 

Hi LynnInMN. No, I have not. They are all in a deferred status right now due to my low income.

[New2repair]

Don't ever take out another student loan again. They are going to destroy an entire generation. How old are the collections? Get a couple of secured credit cards, and make your payments on your student loans. It's going to be a rough ten years. Move back home with your parents if you can, and pay off those loans. 100k in loans will blow up out of control if you do not pay them, and literally your life will be destroyed. They will haunt you forever, and years from now, they will end up being 180K. Get the secured card, pay your student loans, and in a few years your credit will recover.

 

I'm sorry, but there is not a single person here that can fix your situation overnight. It took years to accumulate this debt, its going to take years to pay it back. Forget about the few lates, they will go away over time. WOrry about paying that principle amount down, especially if you cannot even find a full time job.

 

I'm old. SO, there's no moving in with the parents. I am a divorcee in my 40's who never got to go to school until after I got divorced and the kids got older. My oldest loan is 2007. So, they aren't that old. None of them are in collections at this time. They are all open loans...just they have late pays on them when I was in between programs and I believe it's possible my school may have reported some of my matriculation status to them late which led to at least one late pay on three loans. (Subsid, unsubsid, and a grad plus loan). I have an associates, a bachelors and three semesters of a professional degree and I cannot find a full time permament job. We have been on food stamps. I have worked every temp job I could find. $10 an hour. $12 an hour. $11 an hour. $14 an hour. Part time. Full time when it's available. I even did an UNPAID summer internship part time which just about killed me (but it was a program requirement).

 

I am not looking for an overnight fix. I have been trying like heck to invest in my future for years and years. Unfortunately, the economic downturn really affected me negatively.

 

All I am asking for is advice with which areas I need to work on first. So, thanks so much for your advice. I hope others will chime in.

 

 

I'm going to be frank with you, because this is a serious situation. Beating around the bush, and niceties, with not help you. Are your children still living with you? Are they under 18 or so? These loans that are in deferment because of your income are probably still collecting interest. If you do not pay, they will take your taxes, they will garnish your wages, and they will even take your social security. I am not joking.

 

I am going to advise you to begin looking at discharging your student loans through bankruptcy, via a financial hardship. I am not an expert on this. Most will tell you that student loans cannot be discharged in bankruptcy. That is technically not correct. USUALLY, they cannot, UNLESS they are going to cause an extreme financial hardship.

Based on what you have said here, they are going to cause an extreme financial hardship.

 

You will never be able to pay these things back making $12.00 an hour. I am not judging you, I'm being honest. Off the top of my head, based on what you owe, you gotta be looking at 13k a year in repayments. Thats not going to happen.

 

Forget the late payments. Forget the collections. Start looking up lawyers who can discharge this via bankruptcy. Include all of your other debts in bankruptcy as well. Get rid of this. Your credit will tank for six months. Ive seen people get credit cards 3 months after bankruptcy. In one year you will be eligible for a mortgage. Bankruptcy has a terrible stigma in the "laymans world". In the credit world, its really not that big of a deal. No, you wont get an AMEX BCE card, but you'll get a walmart card, and a capital one card. And ten years from now, the bankruptcy will be gone off your credit. I guarantee, ten years from now your credit will be in the gutter from the student loans otherwise.

 

I am sorry if this does not sound compassionate. I really do feel sorry for you, but wallowing with you, will not help you. Start researching and emailing lawyers. Find one who has experience with student loans and discharging them through bankruptcy. Do it fast and make a clean break of it.

 

 

I want to add one more thing. I'd look at applying for a secured card now, before you do the bankruptcy. Build the positive credit.

Edited October 2, 2012 by New2repair

[LynnInMN]

The loans are not in default or repayment and from what I am reading, the OP wouldnt meet the Brunner Test requirements as no readsonable attempt at repayment has been made. And with the oldest loan being 2007, it sounds like the OP just finished school. No court is going to consider BK this soon after graduating as reasonable.

 

•A good faith effort was made to repay your student loan before you filed for bankruptcy. Effectively, this means you have been faithfully repaying your college loan for a minimum of five years.

 

Direct Loan Consolidation is the best avenue.,...payments geared to income. No income, no payment and your loan stays current. Even if the assigned payment is too high, Direct Loans WILL work with you. Plus a lot of courts are taking Direct Loan Consolidation ICR/IBR payments into consideration.

Edited October 2, 2012 by LynnInMN

[New2repair]

The loans are not in default or repayment and from what I am reading, the OP wouldnt meet the Brunner Test requirements as no readsonable attempt at repayment has been made. And with the oldest loan being 2007, it sounds like the OP just finished school. No court is going to consider BK this soon after graduating as reasonable.

 

•A good faith effort was made to repay your student loan before you filed for bankruptcy. Effectively, this means you have been faithfully repaying your college loan for a minimum of five years.

 

Direct Loan Consolidation is the best avenue.,...payments geared to income. No income, no payment and your loan stays current. Even if the assigned payment is too high, Direct Loans WILL work with you. Plus a lot of courts are taking Direct Loan Consolidation ICR/IBR payments into consideration.

 

How does direct loan consolidation work with the interest? No income, no payment, but the principle keeps growing right? Why delay the inevitable? With income of 10-12k-20? In just a few years of deferment, interest alone will consume their entire income.

[New2repair]

The loans are not in default or repayment and from what I am reading, the OP wouldnt meet the Brunner Test requirements as no readsonable attempt at repayment has been made. And with the oldest loan being 2007, it sounds like the OP just finished school. No court is going to consider BK this soon after graduating as reasonable.

 

•A good faith effort was made to repay your student loan before you filed for bankruptcy. Effectively, this means you have been faithfully repaying your college loan for a minimum of five years.

 

Direct Loan Consolidation is the best avenue.,...payments geared to income. No income, no payment and your loan stays current. Even if the assigned payment is too high, Direct Loans WILL work with you. Plus a lot of courts are taking Direct Loan Consolidation ICR/IBR payments into consideration.

 

How does direct loan consolidation work with the interest? No income, no payment, but the principle keeps growing right? Why delay the inevitable? With income of 10-12k-20? In just a few years of deferment, interest alone will consume their entire income.

 

 

Anybody who has dealt with this entire student loan Gestapo, other then you, knows they are a complete nightmare. You make it sound so easy. "They WILL work with you". Seriously? Thats complete nonsense. Sure, over they phone, they will tell you they "WILL work with you", but it never "works" out that way.

[New2repair]

The loans are not in default or repayment and from what I am reading, the OP wouldnt meet the Brunner Test requirements as no readsonable attempt at repayment has been made. And with the oldest loan being 2007, it sounds like the OP just finished school. No court is going to consider BK this soon after graduating as reasonable.

 

•A good faith effort was made to repay your student loan before you filed for bankruptcy. Effectively, this means you have been faithfully repaying your college loan for a minimum of five years.

 

Direct Loan Consolidation is the best avenue.,...payments geared to income. No income, no payment and your loan stays current. Even if the assigned payment is too high, Direct Loans WILL work with you. Plus a lot of courts are taking Direct Loan Consolidation ICR/IBR payments into consideration.

 

How does direct loan consolidation work with the interest? No income, no payment, but the principle keeps growing right? Why delay the inevitable? With income of 10-12k-20? In just a few years of deferment, interest alone will consume their entire income.

 

 

 

 

Anybody who has dealt with this entire student loan Gestapo, other then you, knows they are a complete nightmare. You make it sound so easy. "They WILL work with you". Seriously? Thats complete nonsense. Sure, over they phone, they will tell you they "WILL work with you", but it never "works" out that way.

 

 

 

"I have always been eligible for some sort of deferral program for either being a student or being unemployed or both....but I didn't realize how vital it was to report these things to Sallie Mae immediately anytime my status was going to change."

w Go ahead and give them a call up. Explain your situation, and see if they will "work with you", as a gesture of good faith to remove the lates, which are genuinely unwarranted right? That will give you a clear picture of what you will deal with going forward.

 

[jaybee]

To the OP....I just posted a thread seeking help/advice. Maybe you can shed some light on my situation....

 

Hi everyone. So, I've read all the newbie information and I have a very dire, unique and nauseating situation.

 

I have a very poor, 579 credit score and a vantage rating of F.

 

I have no bankruptcies.

 

No foreclosures.

 

No auto repossessions.

 

BUT...I have $97,000 in student loans for undergrad, grad school and another undergrad associate degree.

 

And, what's worse is that I have several late pays on each loan because I was slow to report my employment status to Sallie Mae in between school programs...

 

I have always been eligible for some sort of deferral program for either being a student or being unemployed or both....but I didn't realize how vital it was to report these things to Sallie Mae immediately anytime my status was going to change.

 

BTW, I have $2000 in collections aside from this that is also bringing my score down. but the bulk of it is these student loans....and the fact that I have NO credit cards at ALL.

 

Since the SL late pays are the worst possible thing to remove from a report, what can I do to fix this? HELP.

 

P.S. The reason for so much schooling? because I haven't been able to find a full time permanent job in FOUR YEARS. So, with my unemployed time, I figured, I might as well go to school and firm up my skills. SMH! Now I'm a financial PARIAH!

 

Your situation is not as dire as you think. Take Lynn's advice and look into income-based repayment via consolidation. Those student loan lates are probably not hurting you as much as you think. If that 579 score is not a FICO, ignore it. Also ignore anything from Vantage score.

 

What's hurting your score is the lack of open revolving credit lines. Read the forums on secured cards. You should open at least 2 secured cards and stuff them in your sock drawer for about a year. You would be amazed how much a couple open revolving tradelines will improve your score.

[LynnInMN]

Anybody who has dealt with this entire student loan Gestapo, other then you, knows they are a complete nightmare. You make it sound so easy. "They WILL work with you". Seriously? Thats complete nonsense. Sure, over they phone, they will tell you they "WILL work with you", but it never "works" out that way.

 

Excuse me?? I have worked with many students who have successfully had their ICR payment significantly lowered due to high expenses like medical, daycare,high rent, private student loan payments etc.

 

 

 

How does direct loan consolidation work with the interest? No income, no payment, but the principle keeps growing right? Why delay the inevitable? With income of 10-12k-20? In just a few years of deferment, interest alone will consume their entire income.

Interest does keep accruing and after a certain point it stops capitalizing. The point is that your loan is current and the months of zero-low ICR payments count towards the 25 years of repayment. Anything left after 25 years is written off.

[Cosmos Human]

Anybody who has dealt with this entire student loan Gestapo, other then you, knows they are a complete nightmare. You make it sound so easy. "They WILL work with you". Seriously? Thats complete nonsense. Sure, over they phone, they will tell you they "WILL work with you", but it never "works" out that way.

 

Excuse me?? I have worked with many students who have successfully had their ICR payment significantly lowered due to high expenses like medical, daycare,high rent, private student loan payments etc.

 

 

 

How does direct loan consolidation work with the interest? No income, no payment, but the principle keeps growing right? Why delay the inevitable? With income of 10-12k-20? In just a few years of deferment, interest alone will consume their entire income.

Interest does keep accruing and after a certain point it stops capitalizing. The point is that your loan is current and the months of zero-low ICR payments count towards the 25 years of repayment. Anything left after 25 years is written off.

 

But remember after 25 years anything left over you will get a 1099. But there is no 1099 for the 10 year of working full time for a non-profit. If loan gets d/c due to total disability, you will get a 1099. But if you are insolvent at the time, you won't owe taxes.

 

In my situation I will have a large student loan bill coming due when I finish grad school. I hope to work at least ten more years in a non-profit to qualify for the loan d/c program. If not, I will be in a world of hurt. Income based repayment will be the only way to go. I will make sure I have a plan.

Edited October 2, 2012 by Cosmos Human

[New2repair]

Anybody who has dealt with this entire student loan Gestapo, other then you, knows they are a complete nightmare. You make it sound so easy. "They WILL work with you". Seriously? Thats complete nonsense. Sure, over they phone, they will tell you they "WILL work with you", but it never "works" out that way.

 

Excuse me?? I have worked with many students who have successfully had their ICR payment significantly lowered due to high expenses like medical, daycare,high rent, private student loan payments etc.

 

 

 

How does direct loan consolidation work with the interest? No income, no payment, but the principle keeps growing right? Why delay the inevitable? With income of 10-12k-20? In just a few years of deferment, interest alone will consume their entire income.

Interest does keep accruing and after a certain point it stops capitalizing. The point is that your loan is current and the months of zero-low ICR payments count towards the 25 years of repayment. Anything left after 25 years is written off.

 

 

The OP is in her 40's. You are trying to establish her on a 25 year plan now? Essentially, you want her to be a debt slave for the rest of her life.

 

I stand by looking into bankruptcy first. If that does not pan out, then perhaps you can look into the other route. A

 

 

[Cosmos Human]

Anybody who has dealt with this entire student loan Gestapo, other then you, knows they are a complete nightmare. You make it sound so easy. "They WILL work with you". Seriously? Thats complete nonsense. Sure, over they phone, they will tell you they "WILL work with you", but it never "works" out that way.

 

Excuse me?? I have worked with many students who have successfully had their ICR payment significantly lowered due to high expenses like medical, daycare,high rent, private student loan payments etc.

 

 

 

How does direct loan consolidation work with the interest? No income, no payment, but the principle keeps growing right? Why delay the inevitable? With income of 10-12k-20? In just a few years of deferment, interest alone will consume their entire income.

Interest does keep accruing and after a certain point it stops capitalizing. The point is that your loan is current and the months of zero-low ICR payments count towards the 25 years of repayment. Anything left after 25 years is written off.

 

 

The OP is in her 40's. You are trying to establish her on a 25 year plan now? Essentially, you want her to be a debt slave for the rest of her life.

 

I stand by looking into bankruptcy first. If that does not pan out, then perhaps you can look into the other route. A

 

Even worse, I am age 55...I'll be dead before the loans are paid off.