16 replies to this topic

[creditpump]

Hi everyone! So I have finally convinced my husband to do something with his defaulted student loans. GC Services now holds the loans and my husband called them yesterday to tell them he wanted to enter the loan rehabilitation program. The told him his balance was down to $1228. Our taxes have been witheld for the past 2 years so this would make sense but I am worried that it isn't right. My husband's credit report shows 4 different defaulted student loans with ECMC wich would end up totaling over $5,000. Why would GC Services say we only owe $1228? Maybe the have not paid ECMC in full yet? I am confused about how this works but want to make sure we do this right. They also want him to give them our banking info for auto debit payments. Does that sound right? We want to apply for an FHA loan next year (hopefully) so I need to make sure all federal loans are in good standing. Any advice? Thanks much!!!

[jaybee]

Hi everyone! So I have finally convinced my husband to do something with his defaulted student loans. GC Services now holds the loans and my husband called them yesterday to tell them he wanted to enter the loan rehabilitation program. The told him his balance was down to $1228. Our taxes have been witheld for the past 2 years so this would make sense but I am worried that it isn't right. My husband's credit report shows 4 different defaulted student loans with ECMC wich would end up totaling over $5,000. Why would GC Services say we only owe $1228? Maybe the have not paid ECMC in full yet? I am confused about how this works but want to make sure we do this right. They also want him to give them our banking info for auto debit payments. Does that sound right? We want to apply for an FHA loan next year (hopefully) so I need to make sure all federal loans are in good standing. Any advice? Thanks much!!!

I would begin by calling ECMC and determine if GC actually owns the loan, or is just trying to collect for ECMC. You then need to talk to whoever holds the loan and figure out exactly how much you owe, and what was paid through tax offsets.

You should definitely set some time aside and read through these forums. GC is a collection agency, and regardless of what they tell you over the phone, you should never give a collection agency your banking information (you should give them as little personal info as possible).

[snowpuppy]

Hi everyone! So I have finally convinced my husband to do something with his defaulted student loans. GC Services now holds the loans and my husband called them yesterday to tell them he wanted to enter the loan rehabilitation program. The told him his balance was down to $1228. Our taxes have been witheld for the past 2 years so this would make sense but I am worried that it isn't right. My husband's credit report shows 4 different defaulted student loans with ECMC wich would end up totaling over $5,000. Why would GC Services say we only owe $1228? Maybe the have not paid ECMC in full yet? I am confused about how this works but want to make sure we do this right. They also want him to give them our banking info for auto debit payments. Does that sound right? We want to apply for an FHA loan next year (hopefully) so I need to make sure all federal loans are in good standing. Any advice? Thanks much!!!

NEVER, NEVER, EVER give your banking/credit card/debit card info to a debt collector. It is ILLEGAL to force you to pay your Federally defaulted SL's with this method by requiring you to do so. They cannot deny you the right to send a check/money order, etc.

Ask DH to get his FAFSA Pin # at PIN.ED.gov. Then go out to the National Student Loan Database (NSLDS), log in and see where all of his loans are. He may have some with one CA and the balance with another CA. Make sure you know who is holding the debt before you talk to anyone.

Edited by snowpuppy, 09 May 2012 - 07:26 PM.

[creditpump]

Thank you both for your input. Ecmc refuses to talk to us about the loans and keeps sending us back to go services. Go services refuses to let us do the loan rehab because the balance is too low. Hubby unfortunately gave them our checking account info so I am hoping we don't get screwed. I tried calling the dept of education and they told me that now that it is in collections that go services can basically make their own rules. My question now is since we can't fix our credit with the rehab should we just pay the amount in full to get out of default? Will that even effect his credit report? Any other suggestions? I am worried that ecmc has not reported that any of the loans have been paid and they won't talk to us!

[jaybee]

Thank you both for your input. Ecmc refuses to talk to us about the loans and keeps sending us back to go services. Go services refuses to let us do the loan rehab because the balance is too low. Hubby unfortunately gave them our checking account info so I am hoping we don't get screwed. I tried calling the dept of education and they told me that now that it is in collections that go services can basically make their own rules. My question now is since we can't fix our credit with the rehab should we just pay the amount in full to get out of default? Will that even effect his credit report? Any other suggestions? I am worried that ecmc has not reported that any of the loans have been paid and they won't talk to us!

Giving them your checking account information was an extremely bad move. What exactly did you agree to with GC? What did they tell you they will take out monthly?

You must have a minimum principal and interest balance of $500 at the time of rehabilitation (after you make your 9 payments). My guess is that they set you up with monthly payments that will bring you under the $500 threshold, that's why they are giving you the line "your balance is too low."

Anyways, as long as they have your banking information, don't expect them to work with you at all. They don't care now, they have access to your money. I'm not sure if you signed any binding payment agreements with them, but if not, I would check this forum for advice on what to do if you accidentally give a collection agency your checking info. Paying off debts in full will not remove negative tradelines from your credit report.

[creditpump]

I know giving them our account info was extremely dumb and wasn't too pleased about it myself … but too late now I guess. My DH agreed to pay them $205 per month for 6 months to pay them off. He didn't sign any type of agreement. I am still pissed about not being able to do the rehab. I know the balance was low but I feel like they could have done it anyways. I know paying it off won't remove any negative tradelines but I don't know what other options we have. They really weren't helpful from the beginning so I am thinking to just pay them off in full now and be done with them and then close our current checking account and open a new one so they won't have our info anymore…

[snowpuppy]

I know giving them our account info was extremely dumb and wasn't too pleased about it myself … but too late now I guess. My DH agreed to pay them $205 per month for 6 months to pay them off. He didn't sign any type of agreement. I am still pissed about not being able to do the rehab. I know the balance was low but I feel like they could have done it anyways. I know paying it off won't remove any negative tradelines but I don't know what other options we have. They really weren't helpful from the beginning so I am thinking to just pay them off in full now and be done with them and then close our current checking account and open a new one so they won't have our info anymore…

If this were me, I would close the checking account immediately. The reason you didn't get any 'agreement' in writing is because it's illegal for them to require this info in advance. It's a violation of federal law. That, and if they mailed you an agreement, you would have something in writing to use against them when they empty your account into their own pockets.

[creditpump]

OK closing bank account today and will never make that mistake again.

Planning to have DH call the evil GC Services tomorrow. Need advice - we are going to tell them that we will send a money order for the full amount due instead of doing monthly payments so we can just be done with this. Should we request something in writing from them before sending in the payment?

Any thoughts on what to do with ECMC? Should we just dispute after we pay off the defaulted loan since they are showing so much still being owed and have duplicates on the CR? They actually show different amounts on each CR???

Can't wait to get this over with. I am NEVER going to let my kids get into this mess

[thecollector]

I work for GC services. The reason you are confused is because the dept of ed does not contract your loans to the same collection agency unfortunately. they probably only have about 1 or two of your loans. there is no need to cancel your checking acct. Just call them back and tell them you want to stop the rehab program and you want a 30 a letter ( balance in full letter ) and you will send them the balance in full.


I see on here that alot of you are confused about how defaulted student loans work. The loans never get "bought" by a collection agency , they are always with the dept of Education at all times. These companies are contracted by the govt to collect for them. They never buy loans ever. Its not like credit cards where they buy other depts. All GC is contracted tp do is get you into a voluntary repayment program before the us govt starts wage garnishment , tax offset or litigation against you. all payments never go to GC services but directly to the dept of ed.GC does not handle any money at all. All payments are made in due to the dept of ed just fyi. but unfortunately when you default on your student loans your now ingovt default and must work with the collection agency as the dept of ed will not work with you any longer directly :-(

[creditpump]

I already closed my checking account. Made me too nervous having them have my info since they are oh so helpful on the phone. We paid the loan in full with a bank check. We would have been happy to pay monthly if they would have done the rehab but they wouldn't, just monthly payments which would do nothing for our credit. Live and learn I guess

[creditpump]

Question though, why did they have us make payment out to go services if we are paying the dept of education?

[jaybee]

Question though, why did they have us make payment out to go services if we are paying the dept of education?

I'm interested in the answer to this too.

[johnny5]

Perhaps the amount was too small but when I researched defaulted federal loans for my roommate I remember reading that they have to offer you a rehab program unless you've already failed to be the obligations of a previous rehab program.

I also remember someone posting here that if the CA was being unreasonable with a rehab program you should contact the Ombudsman office at the Department of Education or Direct Loans to assist you. There reasoning was since they are basically a contractor if the Ombudsman office got lots of complaints and issue with a CA that might affect their future contract renewals so as soon as the Ombudsman office gets involved they are a lot more reasonable.

Heres the link...
http://www.ombudsman.ed.gov/

Anyways nether here nor there since you've already resolved this with the payoff, but thought it was worth sharing.

[JUNOCME]

I too am in 'rehab' with GC services. I have now made my 9th payment and called them to check on the status of getting my loan purchased. After being transferred a few times I was told that come December (now its up to 14 months) that my account would go to ECMC who would find a qualified lender?!

I was never told that it would be up to 14 months and that after that I would have to continue to make payments to ECMC. I sent an email to Ombudsman and hope to find a resolution.

Please update me on how far you have gotten with these guys.

[LynnInMN]

I too am in 'rehab' with GC services. I have now made my 9th payment and called them to check on the status of getting my loan purchased. After being transferred a few times I was told that come December (now its up to 14 months) that my account would go to ECMC who would find a qualified lender?!

I was never told that it would be up to 14 months and that after that I would have to continue to make payments to ECMC. I sent an email to Ombudsman and hope to find a resolution.

Please update me on how far you have gotten with these guys.

You qualify for a rehab after 9 months...but sometimes it takes longer. It is not GC services fault....there have been issues with funding of the rehabs at the guarantor level and this is not anything that the ombudsman can help with or change. You just have to be patient and keep paying.

[yikesidid]

Hi everyone! So I have finally convinced my husband to do something with his defaulted student loans. GC Services now holds the loans and my husband called them yesterday to tell them he wanted to enter the loan rehabilitation program. The told him his balance was down to $1228. Our taxes have been witheld for the past 2 years so this would make sense but I am worried that it isn't right. My husband's credit report shows 4 different defaulted student loans with ECMC wich would end up totaling over $5,000. Why would GC Services say we only owe $1228? Maybe the have not paid ECMC in full yet? I am confused about how this works but want to make sure we do this right. They also want him to give them our banking info for auto debit payments. Does that sound right? We want to apply for an FHA loan next year (hopefully) so I need to make sure all federal loans are in good standing. Any advice? Thanks much!!!

NEVER, NEVER, EVER give your banking/credit card/debit card info to a debt collector. It is ILLEGAL to force you to pay your Federally defaulted SL's with this method by requiring you to do so. They cannot deny you the right to send a check/money order, etc.

Ask DH to get his FAFSA Pin # at PIN.ED.gov. Then go out to the National Student Loan Database (NSLDS), log in and see where all of his loans are. He may have some with one CA and the balance with another CA. Make sure you know who is holding the debt before you talk to anyone.

This makes me very nervous. I called AES to make payment after receiving some very unprofessional calls from a CA attempting to collect on my defaulted SL.

 

Ok, long story... I knew I wanted to go back to school but was inelligible for FA because I was in default. Around the same time my sister began getting collection calls for my SL. I called the CA to confirm that they had my correct information. When the woman read my listed contact information and listed my sister's phone number, I informed her that that number was not my number and has never been my number and insisted she remove that number from my file immediately. I don't know where they got my sister and BIL's phone number but they had my correct number on file. Anyway, so the woman then gives me an attitude and says that I must obvisiously know the person with that number. So I ask her if she owed a debt, would it be ok for a CA to call her neighbors to try to collect her debt. She then told me that she would remove the number and asked me something along the lines of "So, is that the only reason you called or are you going to pay your debt or what?" I told her I was unemployed and could not make a payment but when I was able to do so, I would call AES and pay them directly because the CA calling my sister's house and then this woman's attitude was completely unprofessional and I would not deal with a company like that. Then I hung up. A few weeks later I got a letter from AES, they transferred my default SL to a different CA. I found that CA's website and signed up with an account to make payments. Then I called the CA just to verify that I was making payments to the right CA for my default. They confirmed and then explained rehab and asked if I wanted to do that. Of course! So, they explain that I have to pay a specific amount on specific dates using an automated debit. That I can't just go on their site and make the payment with my credit card or pay by check. They told me that I have to do automated payment with my bank account.

 

I entered into the SL rehabillitation agreement and I have been making automated payments for the last 8 months. After my 6th payment I made some phone calls requesting confirmation that I was ellibible for FA again to go back to school. Everything seems ok with that, my classes start a little over a week from now.

 

I've been researching online and I'm getting more and more nervous. I read things warning that you should never make payments to a CA because they can take your monthly payment for months and then when you are about to pay off the debt, they can sell the debt to a new CA for the original amount and you get hosed. Now, reading here that you should never give them your account information. EEK!

[LynnInMN]

NEVER, NEVER, EVER give your banking/credit card/debit card info to a
debt collector. It is ILLEGAL to force you to pay your Federally
defaulted SL's with this method by requiring you to do so. They cannot
deny you the right to send a check/money order, etc.

You are fine making automated payments to student loan collection agencies.  Student loan collections agencies are tightly regulated and audited.  These are multi-million dollar contracts and no collection agency on the DOE or any FFELP lender contract is going to risk loosing this contract by putting thru ACH transactions that are unauthorized.  Student loan commission rate to the agency is about 9% meaning your $100 payment nets them about $9.  If the DOE gets complaints the agency risks loosing placements or loosing their contract all together,.  The warning applies to credit card accounts and other dubious agencies.