To make a long story short, my $6000 student loan from 1985 has grown into a $21,000 debt that I want to take care of. Last year I discovered that my spouse had an addiction and had not been paying our bills, putting money into the bank, etc. I moved to Florida, did not have my mail forwarded to avoid my ex-husband, but DID send a form to the DOE asking to have my deferrment extended one more year so that I could gain monetary stability for myself and my son. I did not receive a reply, but I did get my tax refund in April, so I assumed (yes, stupid mistake) that I was okay until Sept. of this year.

Last Thursday I received 2 letters from the DOE - one was letting me know that my loan was in default and my future tax refunds would be seized - no problem there. The second letter said that my loan was in default and they were initiating garnishment proceedings. They did provide a form asking for proof of income, bills, etc, if I wished to state that garnishing my wages would provide a hardship. I am working on that form and should have it completed with the supporting documents and ready to mail this week.

I received a call from a collection agency (CBE?), and the gentleman I spoke with symapthized with all I have been through over the past years (abusive marriage, death of 2 children) that has prevented me from paying on this loan. He told me to fax him my past two paystubs and then call him so we could work something out before they had to go to garnishment. I did this, but when I called I got his supervisor instead. I offered $150/month for the rest of the year, followed by payments of $200 for the next three months, and then payments of $260 (the amount I calculated would be 15% of my pay). The supervisor snorted, said "That ain't gonna happen," and told me that they can get $300 by garnishing my wages, so that's what they were going to do.

Is there anywhere I can appeal this decision? I went to the DOE website and downloaded the form my employer will use to determine how much of my wages to garnish, so I don't know where they are coming up with $300 compared to my $260. Also, in the paperwork the DOE asks me to fill out, it asks for other household members' incomes and social security numbers - I have 2 roommates, and neither want to provide this information - will it hurt my case? I can provide the DOE a copy of our agreement breaking down the amounts due by each of us.

I had a problem with the IRS a few years ago, and worked it out with them so much more easily than this - I don't understand why there seems to be such a lack of empathy when it comes to the agencies who collect on student loans. I want to repay this, but I want to be able to live somewhere other than the projects while I do it! I am not an extravagant person at all, but their taking $300 from my monthly income will severely impact my ability to pay my bills, buy necessities, etc.

I appreciate ANY advice on how I should proceed from here.

Dawn

Thank you for your reply.

Today I got another call from the original "nice" collector I had been dealing with. He stated again that by their calculations they will garnish $300/month from me, and will do so starting on October 15th. I told him that I intended to ask for a hearing based on hardship, and he told me that certainly I was welcome to do that, but he didn't know of anyone ever winning those hearings, and that if I lost then things would be worse for me, my required payments may be more than $300, and I may be required to make a downpayment of $1000 or more.

He then told me that if I can voluntarily pay the $300/month, then I would just need to pay this for 9 months, at which time they would drop $4280 off my amount due and I would then have 9 years to pay it in full - it would go back to Direct Loans, and if I could only send $50 one month then I could do that, but for the first 9 months if I could just tighten my belt and pay the $300/month then it would benefit me. He also told me that he had gotten yelled at for even wanting to call me to 'give me another chance'.

I highly doubt that he got yelled at, and I'm sure now that he and the other collecter were paying the good cop/bad cop game.

If there would be some way that I could pay $300/month for 9 months (which I doubt I can), can I ask for something in writing stating that those would be the terms?

Is it futile for me to try to have a hardship hearing, or is this just a collection agency trying to scare me into making higher payments?

Dawn

He lied to you about "no one ever winning" a garnishment hearing. I have. And he lied to you that the payments would be more than $300/month or that they would require a down payment from you. He's trying to keep you from fighting it.

Read here about garnishment, rehab and look for my own posts about the hearing. There are definitely ways to keep them from garnishing your paycheck.

Collector is handing you a load of CRAP!!! I used to conduct the AWG hearings and 95% or more got affordable payments. Only if the borrower was being difficult/hostile and was not disclosing all the facts did we actually pursue payments equal to the garnishment amount. The nice collector is doing part of the good guy/bad guy collection tactics. Tell him to take your offer or you will pursue a complaint with the Ombudsman and the DOE....agencies and collectors are rated on complaints. If a collector gets too many complaints, he can be removed from the contract. The agency suffers by getting less placements and old crappy accounts.

Thank you for your encouragement! It's sad that these people lie so much that those of us who only want to do the right thing aren't sure what to believe!

I followed some links I found on one of the 'pinned' posts here to the DOE's website. One of the forms I looked at said that, when I submit my form for a hearing to make lower payments, I should also send a check for the amount I propose to pay to the DOE's payment center in Greenville Texas. Should I go ahead and do that?

I just about have all my documentation complete, and plan to send it out, certified mail of course, on Friday or Saturday.