Consolidatiing HUGE loan

[MrsChambers]

I have a huge student loan debt.. like 41 grand... so i'm attempting to consolidate them.. at first, I opted for the income contigent(?) payback thing... well now I think that I'm screwing myself... you have 25 years to pay it back, based on your income, so it could go up or down, depending.. then after like 25 years whatever is NOT paid, is forigivin..

 

but then I was thinking that perhaps I should change my mind and do this other payback where you have like 30 or 40 years to pay it back.

 

the problem is.. there is no way that we can afford a 600$ student loan payment every month.. I just don't want to screw myself.. the loans are already in collections and whatnot... I think if I default again, the MARSHALS will come after me!!

[LynnInMN]

The trick is, take the ICR and if you can afford to pay more on the loan each month, do it! You never know what the future is going to bring and you can always change your payment plan further down the road.

[MrsChambers]

oh.. okay.. I'll just keep it the way it is.. thats what my husband says.. but I don't think he really has a grasp at what it will take to pay off 41 grand... (bless his soul)

but if I can make changes later, then thats groovy.

 

I suppose that they just want something from me on a consistant basis... I mean.. I make 20 grand a year, they know this. it's obvious that this is not going to paid off in this lifetime.

 

thanks for the advise.. I will just let it ride and see what the payments work out to

[MrsChambers]

okay... so I'm in the consolidation process (or so I thought)

 

today.. I go to PG to check my stuff.. and I see a hard pull from PIONEER CR for a collection account.. so then I come here and search these bad boys and they do collections for student loans.. so I am confused.

 

am I consolidating?

am I in collections?

 

is this helping me?

I don't know what to think...

any input would be grand!

 

hey wait... now that I look a little closer.. these buttheads did a hard pull on mein November of 2004.. I have never been contacted by these people before.. what gives?

can they do this?

are these the people I will be dealing with - with my loan consolidation?

 

what a hell of a way to make your introduction!!

Edited January 28, 2005 by MrsChambers

[tootie357]

dont worry. this happened to me as well with sallie mae. they will probably try to call you and work out a deal or something.

 

citibank asked salliemae for my payoff information. turns out they have been holding up the process because they want me to consolidate through them. they say they can meet or beat citibank's offer. i say ok give it a shot. blah blah blah. they say based on the information you gave your payment will be too damn much. so i say based on the information you gave me i respectfully decline your offer and please expedite my information to citibank so they can process my loan.

[hegemony]

hehehe

 

41K is not HUGE LOL

 

I still owe 75K!!!

[MrsChambers]

HEGE:

I still owe 75K!!!

 

OMG.. what is your monthly payment if you dont' mind me asking.. and better yet, if you don't mind telling..

 

I'm stressing that the payment every month is going to be like 600$$ friggin dollars and I jsut can't do that!!

 

stress-stress-stress

 

 

So what, Pioneer is going to contact me to work out a deal? what kind of deal? what is there to deal?

I thought that I would be paying the loan off to the government! not a collection agency!!

Edited January 28, 2005 by MrsChambers

[tootie357]

i got you both beat buy at least a few thousand. let me calculate my new payment... 281 for five years. after that, i have to figure out another strategy.

[tootie357]

pioneer probably bought your debt from someone so they want to make money off of it. i am just guessing at this. but sallie just tried to hold mine up so they could give me a higher interest rate and higher payments. no thanks.

[MrsChambers]

I AM LOST

 

the loans are listed on my credit report as the department of education..

[ziggypop]

Pioneer is an authorized CA for loans held by the Dept. of Ed. They are also owned by Sallie Mae, so I'm sure they handle most of theirs as well. They never did report on my CR and my loans also always said "DOE". That's probably why you didn't know about them -- other than one pull, there was nothing on my CR that had anything about them (Pioneer did contact me, though). DOE doesn't sell their loans to their CAs; they just authorize them to collect. CAs still get all the fees and everything, but they don't own the loans; DOE still does. I'm totally guessing here, but they might have pulled your CR, then found out you had already applied for consolidation (remember, DOE still owns the loan, so they get all of the info, too), so decided not to pursue it, unless you don't end up going through with the consolidation. How long ago did you apply for consolidation and have you heard anything back from them yet? If you haven't and you're concerned, contact whoever you applied for consolidation with and they can tell you were you are in the process.

 

As an FYI, I owe about $76,000 and pay $371/mo. on a 30 year consolidation loan (might be 28 years -- I'm not positive which they gave me; the repayment period is based on the amount of your loan). Not great, but not onerous, either.

 

Many of us here know all too well about large student loan debts, so we know what you're going through. Don't worry, though -- no federal marshalls will show up at your door!!! It will definitely work out!!

 

I hope this helps!! Good luck!!

[MrsChambers]

yeah.. federal marshalls scare me.. I saw this chick on COPS a while ago get arrested by the marshalls for not paying her student loans.. so it does happen..

 

 

thank you for the detailed explanation... that helps A LOT

 

I applied for consolidation about 2 weeks ago.. and I did get this letter back saying that unless I want to change anything.. it will go through in 10 days (that was last week) I asked for the income contingent(?) payback.. and I am also stressing that I screwed myself with that.. but LYNINMI told me to leave it alone and let it ride and see what the payments come back at.

they said after the 10 days it should take about 60 days for me to get a payment book..

 

but I saw that these pioneer people are harrassing my credit report and I freaked out.. I just want this to go though, start paying some reasonable payment amount, and have it reported to the credit agencys.. I don't need no pioneer people messing with me when I'm tring to get this all worked out!!

[LynnInMN]

If you are default, you are automatically assigned to the ICR payment plan ...at least initially.

 

On the Federal Marshals issue....this is NOT common. When I was collecting we had executives of the Edfund in our office...in fact we went out to dinner with them as we were at that time their highest return agency. The courts only get involved with fraud cases they told us....and most of these were for professionals such as doctors, lawyers and particularly chiropractors. These they would go to court on and they would become judgement accounts. IRA's were seized, "luxury" property taken, like expensive cars and boats (Jags for example). There was a case reported on 60 minutes years ago about a doctor who paid cash for his home and put in his wifes name...a $400k home. And yet he owed almost $300k in student loans. This doctor bragged about it on national TV. Well, the house was sold in sherrifs auction. Another case I had personally was a chiropractor in NC. She claimed she was totally disabled and that he had been so for 4 years. I checked her chiro licsence...she had just renewed it. After she disconnected her home phone number, in skiptracing I called her mother, one of her references. Her mother recognized my companies name and spilled the beans on her daughter. She was working under an AKA and different SSI number as a contractor to several health clubs, making good money. And mom also disclosed the amount of property her daughter owned, including several rental properties, all left to her by her late husband. Not only was she caught on the student loans, but on SSI fraud as well. That one I was informed did serve time. These cases were a blast to track down!! We actually did have a lot of fun working collection back then. But things have changed for the worse...unfortunately.

[hegemony]

I pay 500 on extended but ACH 500 to 1500 extra a month. Already almost 25% paid off from my original consolidated balance.

[direred]

While 41k is nothing to sneeze at, I have almost 100k more in student loans when you include all the interest I should have paid while I was in school -- but didn't.

[MrsChambers]

okay.. well you are all making me feel a little better with your oan amounts.. making mine look like a baby loan.. but damn... 40 grand is a lot to swallow!

[lgt525]

I had 65k in student loans that I let go into default when I went and worked in Europe for 3 years. I consolidated them and the collection fees and interest were added to the loans making the total loan that I consolidated 100k (I know, I should have rehabbed, but I was clueless back then and did not understand that the collection agencies would add so many fees to the defaulted loans...)

 

I ended up having to consolidate twice because the salamander CA that handled the first consolidation forgot some of the loans.

 

In four years I have paid back a bit over half of the loans (I now owe $48k)

 

Because I was in default, I had to do three payments on the income contingent plan which made my monthly loan payments $1800 (ouch!). After the 3 payments I was able to switch to the 30 year plan and my monthly payment is $750. I pay extra each month.

 

 

The collection agencies that handle defaulted student loans for the dept of ed make big bucks in " collection fees" when you consolidate defaulted loans. These fees get added to the principal of the loan, at least they did in my case.

 

I also ended up consolidating at a really bad rate (7%) and I am stuck with it, since you cannot reconsolidate.

 

So, as you consolidate, watch out for the following things:

 

1. Collection fees added to the balance of the loan.

 

2 The interest rate you are consolidating at.

 

 

I would hate to see anyone make the same mistakes I did.

 

 

lgt

[LynnInMN]

<<The collection agencies that handle defaulted student loans for the dept of ed make big bucks in " collection fees" when you consolidate defaulted loans. These fees get added to the principal of the loan, at least they did in my case.>>

 

Actually they dont make big bucks on consolidations. When I left collections our agency got 12% for regular payents, 10.25% for rehabs and 8% for consolidations. You are still charged the standard 18.5% but the collection agency doesnt get it all. How did collectors make their commision checks?? Volume, shear volume. I was averaging $750k a month in regular pay, rehabs and consolidations. Over the years the fees dropped big time. 10 years ago on $750k in collections I made a $15k commission check...yup that was a monthly commision. On $750k now, a collector might make $2000. The business is lean and mean now, and that is why collectors are often cranky. It is also one of the reasons I got out of it!

[MrsChambers]

UPDATE for those who care:

 

okay, So I think my freaking out paid off in the long run.. I did a little more research and I found out that if I consolidate my loans then all the derogatory(?) information just stays on my report --WOO-- dont' want that! what the sense in paying these bad boys off if the bad information is staying on my report?

 

So I found out that if I put my loans into rehab (for approximatly a year) then the negative information will come off my credit report and it will start reporting as groovy..

 

so that's what I did.. I rehabed my loan and not consolidated it.

 

hope i didn't screw myself...

[ziggypop]

UPDATE for those who care:

 

okay, So I think my freaking out paid off in the long run.. I did a little more research and I found out that if I consolidate my loans then all the derogatory(?) information just stays on my report  --WOO-- dont' want that! what the sense in paying these bad boys off if the bad information is staying on my report?

 

So I found out that if I put my loans into rehab (for approximatly a year) then the negative information will come off my credit report and it will start reporting as groovy..

 

so that's what I did.. I rehabed my loan and not consolidated it.

 

hope i didn't screw myself...

<{POST_SNAPBACK}>

 

Rehab is a GREAT program -- I can't believe none of the rest of us suggested that to you !! It is for a full 12 months. Note, however, that you may have to end up making a 13th payment to keep it current until they can get the loans returned to DOE and consolidated. Because I and at least one other board poster has had an issue with Pioneer and rehab (but don't worry, MANY, MANY more have had great experiences with them), make sure you get it in writing. It's not a requirement, but it could really end up helping you a year from now. I will say, even with my bad experience with them, it wasn't in the repayment part of it. They were always very polite on the phone to me and there were never any problems at all with the auto-debit payments (never more taken out than should be, payments taken out exactly when they said they would be, and they always credited promptly and properly).

 

Good luck!! If you do a search for rehab on this forum, you'll find a ton of information.

[MrsChambers]

THANK YOU THANK YOU THANK YOU

 

I am pretty stocked myself.. I mean.. I'm not stoked to start paying the bill.. but I am stoked to get this bad boy off my back and let my credit score reap the benifits!

 

the Jennifer girl said she has to call me once a week (don't ask me) to keep in touch.. so when she makes that first call.. I will definatly ask her to send me this agreement in WRITING.. and I will hold onto it for dear life!!

 

thank you for all the advise.. I will post more updates when needed..

(more specificly.. I will post the changes to my credit report for those in the future!)

[LynnInMN]

Some agencies will send a written agreement on rehab, others wont. They are under obligation as rehab is written into federal law.

[ziggypop]

Some agencies will send a written agreement on rehab, others wont.  They are under obligation as rehab is written into federal law.

<{POST_SNAPBACK}>

 

As you know, my problem with Pioneer was that they are now telling me that I wasn't in rehab, even after 13 payments with them and I knew that I really was. Since nothing was in writing, guess who DOE believes (one hint -- it wasn't me!!!)? So, that's why I suggested that she get it in writing from Pioneer. Fortunately in this case, I do think others here have gotten written rehab agreements from Pioneer before. Thanks for the info that they don't have to do it -- good to have someone "in the biz" around here for the actual scoop!!

 

mrschambers -- Pioneer told me the same "phone call every week" thing. It happened the first week or two, then was once a month, then wasn't again for 4 months, then didn't happen for another 6 months when I was almost done! Really, it's just -- "do you know the payment is coming up on [date]?" and "just confirming". No big deal at all and don't be surprised if they don't end up doing it.

[MrsChambers]

well, I'm actually looking forward to the little phone calls.. much rather have them call me and say hey, just checkin.. blah blah blah.. then those letters that they were sending me demanding payment of my student loan to the tune of 40 grand. (not sure what that tactic is all about!)

and I'm happy to get this beast off my back.. been NOT DEALING with this for too many years!

[LynnInMN]

If you have made 13 qualifying payments for rehab, and they are denying you, call the client. I am assuming they are collecting for the DOE right?? Call them.