Ok, verbally the collection agency, GC Services, told me "$300 to be debited from my bank account for the rehab period...at which point it would go back to sallie mae, I am out of rehab,and so on..."

I set up a seperate checking account for the monthly debit. Now I get the agreement and it isn't as black and white as they said

I am going to quote some portions that I have concerns about. R these agreements standard per sallie mae guidelines or does the coll agy set their own terms?

"Thank you for your interest in participating in our Automatic Payment Plan. To begin this arrangement through GC Services LP and for the continuance of payment upon completion of tghe rehabilitation program you must complete tihs authorizaion form below and return to....".."Should I decide to cancel the automatic debit entries, I must provide oral or written notificaiton to GC Services at least three business days before the schedule date of transfer"

Question ->Continuance?? WTF, the agreement, as I understood it was only through the end of rehab. Plus , they don't indicate what constitutes "end of rehab".. Is it 12 months, 13 months, 23 months, 45 months??? Seems like an open ended agreement on their favor. Rehab, I know is over at about 12-14 months, is that a "given"?? Doesn't sound like it there... They do say I can give them three days notice, but that doesn't mean I won't go into default or more collection charges should I cancel Auto Debit, no?

Next portion of the agreement state " my signature on this form also authorizes CREDITOR to continue with the automatic debit entries upon completion of the rehabiliation prgram. The amount debited will be based upon the new termns of my rehabilitized loan. The financial institution and bank account below will be used for the monthly debit. I will contact the CREDITOR if there are any changes to my bank account or if I chose to cancel the automatic debit entries....... This authorizaiont will remain in effect until my loans are paid in full.

So here, I am agreeing to auto debit for the LIFE of hte loan!! Again, while it says I must give them 3 days notice to cancel, that doesn't mean the loan will go back to default should I go off auto debit and just pay with a check (what I want to do at the end of the rehab, period!). If I refi with another creditor after the rehab, do these terms stay the same as well? Is there such a thing as refi'ing these loans, or will I just pay sallie mae direct after the rehab.

Any help on the above will be appreciated...

Most of the wording is standard. However I have never seen the wording on behalf of another creditor for the life of the loan. Dont like that part.
The 3 day thing is required by the FDCPA. If you cancel an auto payment, it would not cancel the rehab as long as your payments arrived at the specified time.

Thanks for the response and the clarificaiton of rehab/3 day notice.... still need clarificatoin on a couple of items:

a. They don't specify when the loan will be "rehabilitated".... so which is it? 12-24-36 months?? I would hate to sign something "open ended" like that, without it giving me a specific time frame; or is it standard practice that rehab is completed after 13 months or so?


b. So basically, even though it says "...also authorizes CREDITOR(sallie mae) to continue with the auto debit upon completion of rehab".... I can just decline the auto debit and say I will send them a check? Sounds easy enough.... certainly I am not going to do it during rehab, but afterwards.

I am going to have to address with them the part of the " authorization to remain in effect for the life of the loan". The way the have acted so far, I dont' know how "cooperative" they will be in deleting that sentence . I would love to be able to find out if that is Sallie Mae requires this verbage or is it just GC trying to stick it for me for life!

when/when..... that is what I am mainly concerning me.... "when is rehab over" .....which isn't indicated on the agreement.

Any idea on the above?

thanks

Rehab is defined by the Higher Education Act. The CA must comply with that. Collection agency agreements have to be vague to avoid making it appear that you have a satisfactory ongoing payment plan. In the past, borrowers have waved this payment plan letters in the CRA faces to have the default removed, or to by a home.

Rehab is 12 consecutive, on time payments. However, it may take 13 or 14 months for it to "convert" back to a regular, insured loan.

Thanks to both for the clarification.

Well, I signed my rehab agreement, so took first step to clear this $50K loan,