Teaching scholarship/loan

[ettslayer]

Hello all.

 

I graduated in 2000. I received a scholarship when I graduated in 1996 from high school for a teaching degree. The "scholarship" wasn't a real scholarship. It was a "scholarship-loan." You had to fulfill requirements such as graduate with a licensure to teach, stay in their special program, etc and teach at a public school 4 years to "pay" back the loan. Well needless to say I defaulted on the loan.

 

I made payments of $340 dollars to a company called Equifax Risk Management for this "loan" for several months after grace periods were served. In 2002, this account was turned over to a guarantee agency that collects on this programs behalf. I made sporatic payments of $25 with a more consistent effort over the past two years. The interest is at 10% and the roughly $18,000 I used in college is now at $30,000 with interest over the years.

 

The bad news is my mom signed the promissory note with me. I'm interested in "rehab" for this loan, but I don't exactly know if it would qualify. If it is in rehab, would she be responsible for what rehab under my name doesn't cover? It is a big mess. Constant letters saying I have 21 or so months to pay it off or it will be turned over for garnishment, judgement on homes, tax seizures, etc. The thing is that it is not on my credit history.... They say it is state money therefore federal money....I'm very confused. Anyone can you please help?

[LynnInMN]

Basically this is a "scholarship" if you follow the educational and teaching path. Not following this path converted it to a loan.

 

I have read about state programs like this but it is definately not a type of loan that can be rehabbed. What state did you borrow this thru??