Wm. Ford Direct Student Loan Rehab/Settlement?

[boston_012]

Hi

 

I have a subsidized and an unsubsidized Direct student loan through William D. Ford. Both are defaulted. They are in collections, but the collection agency listed on my credit report is still the US Dept. of Education. Since they are the Feds (as I understand it, at least) I was wondering if it's possible to settle the debt? I'd prefer to settle it to clear it from my credit report, vs. doing a rehab. I have no idea if the Feds settle anything though.... if that be the case, how does one initiate the rehab process? In either case, I don't want to just call and thereby renew the SOL.

[LynnInMN]

There is no SOL on federally guaranteed student loans.

 

Yes the DOE will settle. Contact them by phone, although you probably will be referred to one of there CA's. A best you are looking at them waiving the collection fees unless you can demonstate extreme hardship. Keep in mind that you will receive a 1099 for anything settled over $600

[boston_012]

There is no SOL on federally guaranteed student loans.

 

Yes the DOE will settle. Contact them by phone, although you probably will be referred to one of there CA's. A best you are looking at them waiving the collection fees unless you can demonstate extreme hardship. Keep in mind that you will receive a 1099 for anything settled over $600

 

Hi Lynn, thanks for your reply.

 

Do you mean the portion that gets waived gets counted as income, over $600?

 

I suppose if I would only get the fees waived, which must pale in comparison to the actual principal/interest, then rehab may be the better option. I'm more concerned with clearing it from my credit than anything, I'd like to buy a house in the next few years.

 

Would rehab stop them from taking my tax returns every year also, or does that have to be petitioned for separately? It doesn't appear on my credit report, but it's just kind of a nuisance.

[LynnInMN]

There is no SOL on federally guaranteed student loans.

 

Yes the DOE will settle. Contact them by phone, although you probably will be referred to one of there CA's. A best you are looking at them waiving the collection fees unless you can demonstate extreme hardship. Keep in mind that you will receive a 1099 for anything settled over $600

 

Hi Lynn, thanks for your reply.

 

Do you mean the portion that gets waived gets counted as income, over $600?

 

Yes

 

I suppose if I would only get the fees waived, which must pale in comparison to the actual principal/interest, then rehab may be the better option. I'm more concerned with clearing it from my credit than anything, I'd like to buy a house in the next few years.

 

Would rehab stop them from taking my tax returns every year also, or does that have to be petitioned for separately? It doesn't appear on my credit report, but it's just kind of a nuisance.

 

Student loan guarantors and their CA's would be working on 2008 tax offset list now.....they are generally submitted to the IRS at the beginning of December. You would need to call to find out what you need to do to get off of the 2008 offset list. However, once your account has been rehabbed, it is no longer in default so tax offset is no longer an issue.

[boston_012]

There is no SOL on federally guaranteed student loans.

 

Yes the DOE will settle. Contact them by phone, although you probably will be referred to one of there CA's. A best you are looking at them waiving the collection fees unless you can demonstate extreme hardship. Keep in mind that you will receive a 1099 for anything settled over $600

 

Hi Lynn, thanks for your reply.

 

Do you mean the portion that gets waived gets counted as income, over $600?

 

Yes

 

I suppose if I would only get the fees waived, which must pale in comparison to the actual principal/interest, then rehab may be the better option. I'm more concerned with clearing it from my credit than anything, I'd like to buy a house in the next few years.

 

Would rehab stop them from taking my tax returns every year also, or does that have to be petitioned for separately? It doesn't appear on my credit report, but it's just kind of a nuisance.

 

Student loan guarantors and their CA's would be working on 2008 tax offset list now.....they are generally submitted to the IRS at the beginning of December. You would need to call to find out what you need to do to get off of the 2008 offset list. However, once your account has been rehabbed, it is no longer in default so tax offset is no longer an issue.

 

Thanks! :-)