A defaulted sl (from '02) has been assigned to DCS. I just called the loan guarantor hoping to get rehab. They told me to call DCS. Given what I've read here and problems with rehab through CAs I don't want to call much less do rehab via DCS

DCS hasn't inserted a TL on my reports as of yet. I'm wondering what would be the best (if any) way to remove DCS from the equation and deal with the lender or guarantor directly.

I considered a DV letter to DCS but I'm afraid of a judgement. I can't pay this in full no way no how.

Barring that, anyone have any advice and/or experience in dealing with DCS for rehab?

TIA

You really dont have a choice. Guarantey agencies have limited collction staff and once you are placed at an agency, you must work with that agency. However,if the agency violates the law or is abusive, they the guaranty agency may step in. (However in some cases they just pull the account and place it with another CA)
Call and ask for rehab. You cannot request rehab via mail. They wont respond.
Know rehab procedures before you call. It you cannot make the standard 1% payment, be prepared to submit a financial statement. And you do NOT have to make a downpayment.

When you are dealing with federally backed student loans, it is ok to deal with the CA and it is ok to talk on the phone. In fact, you don't have a choice (as Lynn pointed out). You need to be sure you document every call and all of the agreements you reach.

Dealing with these CAs is NOT the same as dealing with CAs for cc debt and the like. If you have any questions along the way, don't hesitate to ask.

Good luck!

HI, I am new here but here it goes..

I had the same problem that you are having. I had defaulted student loans with DCS. The lowest I could pay monthly was $105. (this was 2 years ago). They promised that after 12 payments they were going to take the students loans out of my credit reports. They were going to appear as paid as agreed. The thing is that after the 12 monthly payments via direct debit from my checking account, they send the account back the US Dept. of Education but they did not notified the credit reporting agencies. When I asked the Dept. of Education to post this in my credit they said that they can not do that because I had to make 12 payments with them, that DCS was not authorized to say they were going to rehabilitate my loans. I was very mad, but at the time was the only thing I could do to repair my credit (this loans were the only negative marks).

One thing you should know is that the DEpt of Ed, will always refer you to the collection agency if the loan is in default.

To make a long story short, I made the 12 monthly payments to Ed for the same amount, and after the 12th they notified the credit agencies and my reports are clean. After they rehabilitated my loans they took some and sold two to Sallie Mae. I now pay ED $104 monthly and Sallie mae $185 monthly.

Now I have TU 724, Experian 720 and Equifax 727, and working to improve.

Be prepare to write a lot... I did.. Have everything in writing.

Good luck!!

DCS or the CA's have nothing to do with credit reporting. It has never been their responsiblity since they dont even report!!

DCS is a USDOE contractor and they are authorized to qualify you for rehab. Have been for years. Someone at the DOE had their head in a bucket telling you that!! When you make the payment to DCS, it is on behalf of the DOE. If you had been mailing in checks, you would have been mailing them to the DOE in Greenville TX. I glad it all worked out well for you in the end, but it sounds like DCS did their job and then the DOE screwed it up! It happens!!

Thanks everyone! I thought I posted that earlier but it seems to have disappeared.

What I decided to do is DV the CA first - simply because the guarantor wouldn't talk to me (I tried 2x) and I have NO idea what I'll be paying for. The letter I got from DCS was unclear as to principal, interest, collection charges, and something they term "other charges." They lumped everything together in one big scary number

I told them, yes I have a loan guaranteed by their "client" but I can't know if the the account they are referring to is the correct one unless I get more info. It was impossible for me to tell with the lump sum payoff and acct# they gave me.

I guess, though, if my payments are mailed to DOE I'll feel OK with whatever, but yeah I'm putting it in writing whether they like it or not!

My advise is to call them, get into repayment and request a payment history. The CA can pull it onsite and send it to you. The figures DCS sent you are a mirror of the clients balance...everything is transmitted electronically. Generally balances quoted on any letter are a reflection of the balance on the day the letter is generated. Interest is acruing daily. Be cooperative with them and they will be cooperative with you.

You sound to me like you are stalling...the collector will pick up on it too. I am sure client told you who to call.

You can request the account history, but a DV will get you NOWHERE. They can and will validate.

Account history is exactly what I wanted. So yeah it will I couldn't get it from the guarantor. I need to get it from someone. The letter the CA sent didn't indicate anything other than an amount and acct# not matching any of my records.

The servicer would send me statements and disbursment info monthly even while I was still in school. Just a pay off and status - defualt or whatever it is when you're in school. After a year or more I just stopped opening them - they went into the trash.

I finished school and started paying Sallie Mae $250+ a month. I had 2 seperate books/payments. I had always assumed (yeah I know what they say about that) that all my loans were being paid.

Apparently not. I'm STILL not sure because I can't get anyone to give me an accounting as to who was getting what. So, I think I'm entitled to something here, other than a "you owe this much in addition to "these additional charges" which are not defined in the CAs letter.

In one sentence the letter says they are required by federal regulation to charge 15.41% collection charges. Two sentences later it tells me that if I pay the full balance within 10 days of letter I don't have to pay "these additional charges". Kind of a conflict there in my mind. On the one hand they are required to charge and the other they aren't? This leads me to believe there could be some "other" additional charges.

Simply because they are a gov't contractor means absolutely NOTHING to me. This CA does not have a squeeky clean record.

I think it would be kind of silly to do rehab or even a full pay off until I know what I'm paying for and who's getting the money. Simple as that.

You have a right to ask for the account statement, and I can't blame you for that. You can go to the nslds site (http://www.nslds.ed.gov/) to find out who holds your loans and their status.

Hope this helps.

They have yet to validate in my case 12 years later.

I can't speak to that because I don't know your story, but I will say that it is very easy for a CA to get a copy of the DOE paperwork.

Well then I will begin. For starters I have 2 different collection agencies calling me for the same loan, one of them threatened to have me incarcerated for non payment.

The DOE does not have my loan, and according to them the CA involved is NOT listed on the offical listing of collection agencies representing the DOE.

According to the DOE there is a deficiency in the paperwork associated with this loan or they would have begun tax return interception a long time ago and turned it over to the governement for payment.

Accroding to the DOE based on amount borrowed, penalties allowed and interest accumulated I should owe approximately $18K.

This loan has been over inflated above and beyond the legally charged interest rate, and fees have been levied in excess of the legal requirements. They are claiming $30K is due, but will provide no inforamtion on HOW they arrived at that number.

I have requested validation of the debt, and fully intend to repay what I owe. But am not going to pay more than I owe, and since only one person can legally be collecting on the debt I am only going to pay one person.


I would like to rehab this loan but am not sure I can, or pay it outright by refinancing it in some way. However I need to get them to provide the proof they actually have the debt so I can ensure I am paying the correct party.