3 replies to this topic

[HippieAtHeart2]

When I was in college, I consolidated my student loans. The person in the financial aid office that was helping me fill out the student loan paperwork explained that consolidation just lumps all your federal student loans together so that you will make one monthly payment instead of one for each separate loan. Being ADHD, I thought that sounded like a great idea... much easier to keep track of! What I didn't know, is that the Federal Perkins Loan would not be included in that consolidation. Anyway, I'm unemployed now and have been filling out the proper paperwork for deferments. I got this letter the other evening from a collection agency called Williams and Fudge saying they were going to sue me for this $9K Federal Perkins Loan unless I paid in full. I freaked out and began looking online and discovered "rehabilitation" for Perkins Loans. I called the agency the next day, but he said I couldn't rehab it because my account is in default and the school had authorized them to find an attorney. He said they hadn't sent my file to an attorney YET, but they would next week. He told me my options were to consolidate the loan with my other loans (which is what I thought I had done to begin with) or be sued. Is he correct? I don't mind paying extra interest over the long run, I just want to have a chance to get back on my feet. Help!

[snowpuppy]

You can absolutely consolidate your Perkins loan with other federally backed loans. Just be aware that if you consolidate your Perkins loan with your other loans, you lose your forgiveness provisions of Perkins such as if you are a teacher, work as a police officer, firefighter, etc. If you work in certain sectors of Public Service your loans can be completely forgiven which is why the financial aid officer at your former school may not have included them.

The CA is wrong to deny you rehab. They are blowing smoke up your wazoo and hope you're stupid. Rehab is limited to 9 mos with Perkins but if you're looking to clean your reports, this may be worth it. If you can't afford the payments, then you're better off consolidating with your other loans. Once you 'reconsolidate', you receive a new loan. This resets the unemployment clock and you are again eligible for a full 3 yrs of unemployment deferment once again since it's a new loan.

Choice is yours. The consolidation process doesn't take long, 30 days or so. If you want to rehab, tell them you want the reason they are denying you rehab in writing and that you will forward that letter to the Ombudsman's Office at the US Dept of Education. CA's under contract NEVER want to hear from the Ombudsman. Ever. Then you are going to send that silly letter to your Congressman and complain about what lousy gov't contractors they are.

You should get real happy in about 48 hours.

[HippieAtHeart2]

You can absolutely consolidate your Perkins loan with other federally backed loans. Just be aware that if you consolidate your Perkins loan with your other loans, you lose your forgiveness provisions of Perkins such as if you are a teacher, work as a police officer, firefighter, etc. If you work in certain sectors of Public Service your loans can be completely forgiven which is why the financial aid officer at your former school may not have included them.

The CA is wrong to deny you rehab. They are blowing smoke up your wazoo and hope you're stupid. Rehab is limited to 9 mos with Perkins but if you're looking to clean your reports, this may be worth it. If you can't afford the payments, then you're better off consolidating with your other loans. Once you 'reconsolidate', you receive a new loan. This resets the unemployment clock and you are again eligible for a full 3 yrs of unemployment deferment once again since it's a new loan.

Choice is yours. The consolidation process doesn't take long, 30 days or so. If you want to rehab, tell them you want the reason they are denying you rehab in writing and that you will forward that letter to the Ombudsman's Office at the US Dept of Education. CA's under contract NEVER want to hear from the Ombudsman. Ever. Then you are going to send that silly letter to your Congressman and complain about what lousy gov't contractors they are.

You should get real happy in about 48 hours.

Thanks snowpuppy! Yeah I'd prefer to do rehab for sure. How do they determine how much your payment will be with rehab? My original loan amount was around 6K, but I currently owe 9K for the Perkins Loan since it has defaulted. I'm unemployed right now and my income is actually $0, but a family member said they would help me a little bit until I find employment.

I really like your suggestion about forwarding their response to the Ombudsman's Office. Judging by my last conversation with the W&F, I think that is the route I'm going to have to end up taking.

[snowpuppy]

I can't give you a dollar amount, but work with the Dept of Education to see if you can get a reasonable payment in order to Rehab.

In case you haven't heard, they are hard up for $ lately. They're bending over backward for borrowers.