My BF is trying to rehab his defaulted loans. It is only 2 of them for about $10,000 (13,000 with the tacked on collection costs).

He called TX Guaranteed last week and asked about rehab. I was under the impression that everything was OK- she was sending some papers. Well, she sent CONSOLIDATION papers instead. Nothing mentioned about rehab, nor did she include an accounting of the loans- which we were expecting.

I looked and saw the original lender was USDE- so I had him call the 800 # on the website to ask about it. The guy from dept. of edu said to call back TG and they were responsible for it. My bad.

One thing he said really bothered me though. He said that the guarantor of the loans does not HAVE to offer you a rehabilitation- he basically said they can do whatever they want as far as collection goes. Is this true?

I thought everyone had the opportunity to rehab, if you made the effort.

He is calling TG back in the next few days. Hopefully they will let him. I can't see why they wouldn't; they are letting me. It's just strange that the government guy said that.

Is it possible he was misinformed? Or am I?

thanks!

Well, sort of, but not really (how's that for unhelpful!!). They don't have to OFFER it to you at all (as in, if you never bring it up, they won't either), but they do have to allow it if you ask for it. The two of them may just have been using the word "offer" in two different ways. Or else the USDOE guy was just wrong, if he didn't mean that. Speaking as a government employee, with all of the cutbacks, it certainly doesn't endow you with any extra training!! Could getting consolidation instead of rehab paperwork have just been an oversight on the part of TX? I'm really not at all an apologist for the SL people, but they're probably absolutely swamped with consolidation requests and issues right now with the deadline coming up and might have just made a mistake. Did you speak to them after you got the consolidation paperwork or have you only spoken with USDE? Also, there's not really anything such as "rehab paperwork." You don't even have to have anything in writing (and some lenders won't give you anything).

If you haven't spoken with them, I would say call them back and ask them about rehab, just saying that you think there was a mix-up in the paperwork that was sent to you and that you wanted to rehab the loan. They do have to allow you to participate if you ask for it, so if you've already talked to them and they refused this request or if they refuse it when you call them now if you haven't yet, then contact the USDOE Ombudsman's office. They can help with situations like that. Their contact info is in the "Important Links" sticky up at the top of this forum.

Hope this helps! Good luck!!

Thanks, your thoughts are pretty much in line with mine. I really do think that it was an honest mistake/miscommunication between the CSR at TX Guaranteed and my BF. It took me several conversations with several different reps there to explain what "rehab" was. I guess they just don't train on that there.

She was also telling him that he had to make an up-front payment of $2,200 in order to qualify- I think that's where the miscommunication started. I do know you have to get caught up on pmts in order to consolidate, but not to rehab. It's been stated here in several posts/threads that you don't have to pay a down payment to start rehab- but that they will try to get it out of you.

Hopefully in his next phone call they will be able to work out a "reasonable amount" for him to pay. I'm thinking around $100-150 would suffice.

I also know there is no paperwork involved, so do you recommend putting a note in the memo part of your check? Like: rehab pmt #1, rehab pmt #2, etc.? That seems rather logical to me and would seem to help for stating your case in the future.

As far as the USDE rep's comments- I have no idea. It's kind of hard for me right now because I'm trying my best to explain it to the BF and he's trying to talk to the reps- so stuff gets crossed I'm sure.

We have a lot on our plates right now, if you have seen any of my other threads, so his head is pretty much swimming....we're just trying to stay afloat and have a future.

BF and I talked to the CA again at Texas Guaranteed this evening. She said that in order to prevent garnishment and be considered for a rehab program, that my BF must pay $2,008 UP FRONT as a "good faith payment" in order to begin rehab. She says that if he does not pay this good faith payment, that his loans will go into wage garnishment REGARDLESS of whether he is paying VOLUNTARILY or not.

Please tell me this is false information. We argued with this woman for over 30 minutes about having to make a good faith payment to enter rehab. We read VERBATIM off of the USDOE website AND the TGSLC website the requirements for rehab to her, yet she continued to argue. She kept saying that he was in "garnishment mode" already and the $2,008 is what was "in the system" for him to pay and she can't do anything about it. We literally do not have that money. We offered a $500 "good faith payment" and she said she couldn't accept that. She said that if he does not pay that by the end of this month (um, hello, today is the 28!), that the garnishment will take effect.

We have received NO letter in the mail stating the 30 day notice of garnishment- NOTHING! Only a couple of phone calls.

THIS IS NOT RIGHT. I AM OFFICIALLY PISSED. Someone please give me advice on how to deal with this. I was under the impression that as long as you are paying, they cannot garnish your wages. We even offered to pay DOUBLE the required monthly payment (they wanted 100, we said we would do 200- just that we flat out do not have 2000 to give them. hell, i'll barely make rent this month.)

p.s. They have also taken his last two years' tax refunds- we have the letters and read them to her and she said "we don't have any payment on record for that"- well, guess what? they were taken by the IRS and put toward his loans (which were originally direct loans). We have the letter from the IRS.



We are going to pay next week as soon as we get paid- what else should we do and how do we make this moron understand?

p.s. when i say "we", I mean "he" - he did all the talking- i fed words into his mouth while she was on speaker phone and she got mad at me. ha. she was saying that he was talking differently than their previous conversation- uh, no. I listened to that one too. she's wrong.

Lynn, thanks.

We're going to try again. I was pretty sure she was wrong all along, but she was being very hard headed. I found it ironic that she kept saying things like, "I'm not trying to be difficult" and "I'm trying to work with you here" (isn't that what WE'RE supposed to be saying? )- when she only wanted one thing - $2,000 up front. We were the ones that were being flexible, coming up with all sorts of payment arrangements that we could handle- and NONE of them were by any means unreasonable- we were offering double the minimum, but she just wasn't having it.

One thing that worries me though: she said that she was going to go ahead and push the garnishment order through since we didn't come to *her* agreement last night. She is the one that ended the call too. We were revved up to be on the phone all night with this woman- but she said since we weren't agreeing to her terms that she was going to go ahead with the garnishment and hung up.

We ARE going to start paying next week (after payday) - $200 on the 10th of the month and plan on doing this every month.

IF they push the garnishment through, will we have a grounds for the appeal process? Surely they can't order garnishment if you're paying? That's a big monthly payment too!

Even if she coded the account AWG, it has to go thru at least two more managers before they start the AWG paperwork. Call back today....status codes can be changed easily. Breathe....it is easy to stop at this point. She cannot turn down money!!!

Thanks! He's calling them during lunch today. We're hoping since he's calling during regular business hours he'll get someone less inept.

Thank you for confirming what I believed to be true in the first place.

I'll keep you posted on the conversation!



EXACTLY!!

BF called TG today again. Spoke to a manager this time. He said the same things the rep said last night. He said that was all he could do for us. At that point, here is how the conversation followed:

BF: "well fine. I know that's incorrect, so I'm calling the ombudsman."
MGR: "Well, maybe I can reduce the downpayment to $600."
BF: "You're not understanding me. I know that I do not have to make a downpayment in order to enter rehab. I am offering you TWICE the minimum monthly. You can't turn down money. (thanks for the quote!)"
MGR: "That's all we can do for you."
BF: "Fine, I'm calling the ombudsman"
MGR: "Sir, please don't call the ombudsman"
BF: "Good day" click.

BF calls ombudsman- they confirm all that has been preached in this forum and elsewhere regarding rehab. Gives BF another # for the TG Ombudsman (the mgr would not give BF this number during their conversation- even after he requested it.)

He has left a message as she was out of the office- hopefully he'll hear back today. This is just crazy! I had no idea they would be this stubborn! WE WON'T GIVE UP!

The CA is graded on complaints. Too many complaints and they loose the contract. Try to have the account pulled back from the collection agency. Tell them how emotionally drained you are and that you do not want to talk to those idiots again.

Guess it won't really hurt to try!

We already tried the impending civil judgement of $60,000 on the rep last night. (yes, that is true, not a lie). It didn't work on her. We tried to explain to her that was why we didn't have $2000. duh.

Might try the civil judgement thing on the ombuds.

YEA!!!!

We win!!!!

Ombudsman stepped in and said our offer of $200 was "more than reasonable" for rehab! hooray!

1st check goes out a week from today!

Thanks Lynn

Were you dealing with Lu at the RR building? I know I have pointed a couple of people in her direction and they have all had good results. They actually have a couple of people over in that building with a clue...unfortunately, they have more than their share of lower-level employees that fit the bottom-feeder profile.

Dont get me going on their bottom feeder staff. I was soooo glad when we opted NOT to renew the contract with TGSLP. That and OK student loans...dumber than stumps!!

I know this doesn't help now, but for everyone elses reference. I had technically defaulted on about 31,000 dollars of student loans. My rehab payment was set at $200 dollars per month, and of course I didn't have to do any downpayments.

The only problem i had was getting lates removed after my rehab was complete.

Jeslyn, I am glad that you were able to get this all worked out. When I went through TGSLC, I had problems with the collections dept as well. The wage garnishment unit was actually easier to work with and actually helped me a great deal.

And centex is also correct - Lu is INCREDIBLE and has been a GREAT help to me on two occasions. Without her, I wouldn't be starting back to school this week!

Congratulations.

TQG- I read your thread- congrats on going back to school!

That's kind of what we're trying to do with him. He only lacks 15 hours(!!!) to get his bachelor's and it's just been hell trying to pay for private schooling on his own. Hopefully once they release his transcripts we can get him into UT to finish up.

The wage garnishment dept. IS helpful and so is the BK dept...the rest...well, I could do without.

I don't know who he talked to, he did say it was a woman, so maybe it was Lu.

Wish I'd seen this a while ago...I've been with TG for a while, and due to other financial issues they did not hear from me for a LONG time. I was basically 'caught' answering the phone at work; but it was OK because I was literally about to call them to hopefully set something up. Got my 'downpayment' down to 2 $500 payments from whatever they were asking...$2500 I believe. Started my regular payments this month...so $500 April, $500 May, and regular $180 starting in June.

Will the 12 months before it rehabbed be April 2006 or June 2006, I wonder?

Your downpayments count towards your 12 payments.

That is probably true, Lynn, but when we were going through the headache of dealing with TG in the early stages, we asked that specific question and the rep said "No". She said the 12 rehab payments would begin after the downpayment.

To reiterate, I agree with your comment, but just trying to illustrate how truly misinformed the reps at TG are.

As far as TG goes, it seems as though the best route to take is through the ombudsman. Our first check goes in the mail today!

I wouldn't say they are misinformed; I believe that they will say anything to get the money from you. They are only interested in getting their money back - not in making this as easy on you as possible. Sad as that is, it's true.

I'm glad that ya'll were able to get this worked out. YAY!!

I guess I should have typed it, *misinformed* - as in they say that's all they can do in hopes that you don't know otherwise. grr...

We are a little naughty though, BF called the rep back to *double check* and make sure that everyone was kosher with the rehab arrangements that were set up by the ombudsman. She was a little annoyed at that dig.

looking to understand the benifits of rehab. I've just defaulted on a loan and looking for the best option to repay. and clean credit report. they are attempting to garnish wages

do a search for "rehab" on this forum. Rehabbing a loan is making 12 consecutive on-time payments and then the loan is re-insured by a lender. Your loan will come out of default and you will work out new payment arrangements with the new holder of your loan. You have to have a balance of at least $1,000 in order to rehab a loan. It's the closest thing to a "fresh start" on your student loans that you can get. It is up to you to keep up the payments. If you're late once, you have to start from scratch.

ETA: Call them before you go into garnishment- you don't want to go there. Trust me. If you wait until your wages are already being garnished, you have to make voluntary rehab payments *in addition to* your garnishments! Time is of the essence if you've already been flagged for garnishment...