CreditBoards > Steps to Rehab Student Loans

creditdog

Aug 25 2005, 04:25 PM

Hi All: I'm a little confused about the process of validating and rehab'ing my old student loans. Here's a little background.

Stafford Subsidized - 1991 - $4000 Disbursed
Stafford Subsidized - 1992 - $4000 Cancelled
Stafford Subsidized - 1992 - $4000 Disbursed

Total Original Loan Amt = $8,000
Total Current w/ Interest & Penalties = $16,688.92 (OUCH!)

Federal tax refund was confiscated in 2002 - approx. $2,000. (I haven't had to file since then since my wife has been working full time and I've been a SAHD.)

I got a pin from NSLDS website in 10/2004, which lead to CA (Premiere Credit of NA) contacting me recently (8/5/2005) with a "we've attempted to collect on this debt but you have not responded" letter. This is the first time that I have heard from them (or anyone!) on this debt - probably because I have moved quite a bit over the last 10 years. I would very much like to deal with this debt and get into rehab, so here are my questions:

1) Do I DV the CA before I ask for rehab?
I'm still within the 30 day limit since this is the first notice I've received from them. I have no paper work from my original loan, so this seems like a good idea so that I at least have a full accounting of everything for my records, and I wouldn't mind making them earn their money (hehe).

2) What is the best method for contacting the CA to arrange for rehab?
I'm reluctant to call, not because I'm concern about being bullied into something, I just don't want to spend the time haggling with a bottom level rep who doesn't know (or isn't willing) to handle the rehab request properly. Would it be more effecient to send a letter requesting rehab and stating the amount that I can reasonably afford to pay (about $50/mo)?

Thank you!!

bkaren96

Aug 25 2005, 09:09 PM

Sorry, I don't have much to add, but experience tells me when it comes to CA's EVERYTHING should be in writing....create a paper trail...

ziggypop

Aug 25 2005, 09:46 PM

QUOTE(creditdog @ Aug 25 2005, 03:25 PM)

Hi All: I'm a little confused about the process of validating and rehab'ing my old student loans. Here's a little background.

Stafford Subsidized - 1991 - $4000 Disbursed
Stafford Subsidized - 1992 - $4000 Cancelled
Stafford Subsidized - 1992 - $4000 Disbursed

Total Original Loan Amt = $8,000
Total Current w/ Interest & Penalties = $16,688.92 (OUCH!)

Federal tax refund was confiscated in 2002 - approx. $2,000. (I haven't had to file since then since my wife has been working full time and I've been a SAHD.)

I got a pin from NSLDS website in 10/2004, which lead to CA (Premiere Credit of NA) contacting me recently (8/5/2005) with a "we've attempted to collect on this debt but you have not responded" letter. This is the first time that I have heard from them (or anyone!) on this debt - probably because I have moved quite a bit over the last 10 years. I would very much like to deal with this debt and get into rehab, so here are my questions:

1) Do I DV the CA before I ask for rehab?
I'm still within the 30 day limit since this is the first notice I've received from them. I have no paper work from my original loan, so this seems like a good idea so that I at least have a full accounting of everything for my records, and I wouldn't mind making them earn their money (hehe).

You can and it wouldn't hurt, but they'll just send you a copy of your original promissory note (which is your original contract). They'll have all of this info. In the SL world, the CAs are assigned the loans; they aren't sold to the CAs; your guarantor still holds it and they still have the paperwork (they needed it to take your refund). But, again, sure you can ask; after all, it's your account. If you don't get the response, though, you haven't really gained much and that's where the problem lies here. Even if it's the CA's fault, the most you could hope for is that the guarantor yanks it back and gives it to another CA and, remember, interest accrues daily on defaulted loans. I mean the guarantor here as far as being above it all and not the CA, but at this point, it's really just a delaying tactic. But if it's something you'd feel more comfortable doing; then sure.

2) What is the best method for contacting the CA to arrange for rehab?
I'm reluctant to call, not because I'm concern about being bullied into something, I just don't want to spend the time haggling with a bottom level rep who doesn't know (or isn't willing) to handle the rehab request properly. Would it be more effecient to send a letter requesting rehab and stating the amount that I can reasonably afford to pay (about $50/mo)?

In this one instance, you pretty much don't have any other options other than doing this over the phone. They are required by law to allow you to participate in rehab and they have to allow you to make mutually reasonable payments. Just stand your ground, and make sure you SPECIFICALLY say that you want to rehab the loan. If you have any problems getting a reasonable payment, then you can always contact the ombudsman's office (contact info in the "important links" sticky at the top of this forum). They can act as an intermediary and help on these types of issues. The "default" monthly rehab payment is 1% of the balance due. So, in your case, that would be about $167/month. But, if that's not reasonable for you, you'll just be required to give some financial info and they'll pretty much always agree to a lower payment. I know there's people on here with WAY, WAY more than you and they got $50/month payments because they were unemployed (not exactly the same situation as you, but, in the end, the same effect). Basically, I think you just need to agree to a payment that might "pinch" a little bit, but certainly shouldn't hurt at all. I owed a ton more than you did (and paid more than $50/month), but I got them down to about 1/2 of 1% and, again, I definitely noticed the payment each month, but I really didn't have to change my lifestyle at all or anything. And, in my case, I'm single and don't have any dependents, so I don't have nearly the expenses that you would.

Thank you!!

In most cases, it is beneficial and a good idea to get everything in writing, but they aren't required to do that here and a lot of them won't (although it certainly doesn't hurt to ask them for a written rehab agreement, or at least acknowledgement and I would recommend asking). Fortunately, you have the ombudsman and the rehab program is set out in the law, so that is a lot more of a safeguard than most CA payments are (and, in this case, while your payment are routed through the CA, they're really going to the guarantor). You'll be able to see your rehab payments on NSLDS.

Good luck -- I hope this helps!! Rehab really is a great program!!

creditdog

Aug 26 2005, 12:18 PM

Thank you ziggy!! Very helpful post.

Two last questions -

1) I did a check on NSLDS and there is no "servicer" list for either loan. Should I check with the Current Lender (Citibank) or the Guarantee Agency (CA Stud. Aid Commission) to confirm that the CA contacting me on this has actually been assigned to this debt? Or does the account phishing thing not generally happen with SLs?

2) Who can I request a copy of the original loan contract and account history (interest, etc..) from? Does anyone have a legal obligation to provide this to me, like the original Lender (Citibank)?

Thank you!!

ziggypop

Aug 26 2005, 12:44 PM

QUOTE(creditdog @ Aug 26 2005, 11:18 AM)

Thank you ziggy!! Very helpful post.

Two last questions -

1) I did a check on NSLDS and there is no "servicer" list for either loan. Should I check with the Current Lender (Citibank) or the Guarantee Agency (CA Stud. Aid Commission) to confirm that the CA contacting me on this has actually been assigned to this debt? Or does the account phishing thing not generally happen with SLs?

I've never heard of it happening with SLs, but that doesn't mean much that I haven't heard of it and I can't imagine it would hurt to ask. I would start with CSAC -- if the lender has made a claim, then they've been reimbursed for the default and the guarantor now has the loan.

2) Who can I request a copy of the original loan contract and account history (interest, etc..) from? Does anyone have a legal obligation to provide this to me, like the original Lender (Citibank)?

You can probably get a copy of the prom note from the CA or from CSAC. As far as who is "legally" obligated to give it to you, I don't know and I don't know about the account history. Again, in the world of SLs, there's what's "legally required" and what's actually done. I know it's not fair and not right and we can lament it all we want (and we do!!) and say that it's not the way they're supposed to do it so I don't want to budge, but, unfortunately, at the end of the day, they'll give you what they give you. Not that you shouldn't ask and that you shouldn't expect it, but there are some issues there. Again, if you have a problem here, you should contact the ombudsman's office.

Thank you!!

I hope this helps!! Good luck!!