Hello,

I completely dropped the ball with my student loans and have managed to get all except two in default. They were picked up by Allied International Credit, who have been very nice. They would like me to get into rehab (loans + interest + fees are $71K), but I can't afford the $460 a month payment. Instead, I am paying them $240, and while they are satisfied, I know this isn't counting as rehab!

Does anyone know of any way I could get them to allow me to get into rehab with the $240? Or is that $460 the only way they'll call it rehab? I can probably start paying them $300 a month in February, but there is no way I can afford $460 and still pay rent, car note, insurance, utilities, food, parking for work and my other expenses.

Any help would be greatly appreciated.

bump...does anyone have any suggestions?

Have you called them yet?? It is possible under 'reasonable and affordable" clause of the rehab rules. When they set up the payment of $460, did you do a financial statement with them?? Did they ask questions on how much you earn vs your bills???

I have been talking to them for months, as a matter of fact I call every month so they can process my monthly payment. They have my financial statement and they know how much I make. They are pretty steadfast in saying they can't do rehab without me paying $460 a month for 12 months, and I just can't afford that. I am going to ask again when I talk to them this week about how they're reporting. I make a good living but I'm already paying $60 a month to my state guarantee agency (I successfully rehabbed with them but I owed them a lot less) in addition to this $240, plus rent, car note, insurance, etc. and I'd really like to rehab so I can clean this up. Is there a set percentage of the loans owed or of your income that they go by?

As a general rule, the standard payment to qualify for rehab is 1% of your balance or in your case, approximately $700. Payments any lower go under the "reasonable and affordable" ..however both parties have to agree on the payment. The concept behind this formula is so you wont default again.

Are you planning on consolidating after the rehab??

I don't think I can consolidate again. As it was, I consolidated TWICE and that's how my initial $22K turned into $35K then into $50K+ plus fees and interest. The loans that they didn't pick up are now through my guaranty agency (only about $5000) and I'd rather keep them separate as they have already been rehabbed and are reporting positively. I'm aggravated that the two consolidations didn't pick those loans up in the first place, but that's water under the bridge. I guess I'm going to have to just continue to pay them until I can afford $460 (which will hopefully be later this year; I'm getting married and will be able to free up more money when DFH and I move). Thanks for your help Lynn, I appreciate it. Maybe AIC will work with me when I can pay them $300, or even $350 if I can manage it.

Hi,

I accepted a rehab payment that I couldn't afford. My rehab payment was $380 a month and I was unemployed. The full payment would have been over $600 and impossible.

I paid the rehab payment for about 3 months and then tried to get it lowered. After suggestions from posters on this board, I contacted the ombudsman via email and the ombudsman got my payment lowered to $200 a month. Try contacting the ombudsman and see if they can intervene. It will depend on your salary and your expenses. When the ombudsman was working on my matter, he asked me if I was willing to get on a conference call, send financial stmts, etc. (I was willing). It never came to that and actually the whole matter was handled in less than two weeks.

Good luck to you.

Ombudsman? How do I get in touch with him/her? Thank you so much for this information! I would be happy to split the difference and pay $350 to them and HOPEFULLY get these loans in order in the next year, it would help my CRs hugely.

Ombudsman? How do I get in touch with him/her? Thank you so much for this information! I would be happy to split the difference and pay $350 to them and HOPEFULLY get these loans in order in the next year, it would help my CRs hugely.
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Do a search on the site for student loan ombudsman and you should get info. I emailed the ombudsman and gave my cell phone #, etc. Someone was in touch with me within a few days. Sorry I don't have the info right off the top of my head. Chances are, another poster will see this and give you the info.