Does anyone know if you can consolidate or rehab after a garnishment
for defaulted student loans?

Will they let you start a payment plan when you start a new job after being unemployed if an order to garnish is in place???

I really can't answer that question.

But...

1-800-621-3115 is the phone # for federal student aid

1-877-557-2575 is the # for the Ombudsman's Office (They provide problem resolution between lenders and consumers)

http://www.ed.gov/students/college/repay/e...ks.jhtml?src=sm is their web site (dept of ed)

Surf around and see what you can dig up.
I'll look around and see if I can get you more info.

I went to the AES (American Education Services) website - they guarantee my loan - and called the number they provided for loan rehabilitation, 1-800-233-0751. In order for my garnishment ($165.00/mo.) to be eligible for rehabilitation, I will have to pay an additional voluntary payment of $85.00/mo. for 12-14 months without missing a payment - they started at $100/mo., but I got him down. At that point, they will rehab my loan and delete the garnishment from my credit report. Or, pay a lump sum of half the balance, which is around $2500.

I really want to do this, because interest is constantly accruing ($1500+ so far), along with collection fees being assessed ($819+). My beginning balance was $6885. After 2 1/2 years of garnishment, I have paid $4950. My balance I now owe is a $5085. Of that $4950, only $1800 has gone towards principal (? - though this doesn't seem right, my calculations show it should be $2630) :pout: . I have to admit, I was on the verge of tears & had to stop and collect myself. If I don't do this, the garnishment will remain for 3-4 more years, with all of the interest & fees adding up.

I am going to have to figure out a way to do this. I hope this helps.

My student loans were in default and my paycheck was being garnished for about 8 months before I realized I could consolidate them. I consolidated through Direct Loans-US Dept. of Education and my pymt is $77/month, compared to the $188 they were garnishing me for. It can be done even if you're in default. I was dealing with AES too- they were the ones who initiated the garnishment.

I went to their site and my payments will go from the $165 garnishment to $61/mo. That is so much better!! (and a better interest rate, too!)

I can't thank you enough for that piece of advice.

Thanks for the info



I have 2 questions, did the payments you set up stop the garnishment?

And when you consolidated, was rehab still an option?

Suliso,
If at all financially possible I recommend the rehab! If there is just no way you can afford to have the garnishment taken out and an extra $80/mo then consolidation may be your best option. There's really only one reason to not do the rehab first.

You could consolidate your loans right now for a really, really low rate. It may not be as low in a year after you've made 12 consecutive on time payments. So, if you rehab first it may cost you more interest over the life of the loan. From the figures you're talking about, however, were I you I'd do the rehab. The difference in interest on $5K between what the rate is now and what it may be in a year is likely to be very, very small. Only you can decide.

I've seen recommendations to do the ombudsman thing to get your extra rehab payment down a little lower.

Don't underestimate how damaging all those charged off for collection TLs are going to look on your CR. If you rehab they either disappear or appear to have paid appropriately.

After you consolidate rehab is not an option

I'm pretty darn sure that when you consolidate (whenever you do it) that the garnishment will end. You'll just send in payments or have them automatically withdrawn.

If you can live with the derogs then you should consider consolidating now. I just don't see rates any lower, but I could be wrong. However, if you want your CR clean then you should rehab first and then consolidate when you wish.

So...

If I consolidate my garnished loans, then those derogs will stay on my CR for another 7 years??? Or, if I don't feed my kids (or heat my house, or pay my car insurance, etc etc) for 12-14 months, and pay the additional $85 on top of the $165 garnishment, THEN and ONLY THEN they will remove the derogs?

Is there any other way??

7 years? No, not 7 years from now. Those TLs are supposed to be reported for 7 years from the DOFD if they go back to '97 or '98 (there was a change in law around that time, after the change the TL can remain for 7 years after the charge off). However, in my case, the DOFD predates the reported DOLA by years. Evidently, in the case of student loans, the DOLA is set by actions taken by whomever has guaranteed your loans, not by you as the loan payer. I'm still not crystal clear on this point. So, my DOLA is shown as '97 on my CRs. However, the DOFD goes to the early 90's.

Most likely they'll just be on your CR for another few years at which point they'll become obsolete. However, just because something is obsolete and has aged off your CR doesn't mean it can never come from behind and bite you. Do a search on "full factual" and see what you get if you're interested in this topic. This provides even more incentive to rehab if possible.

Like I said, you may be able to do better than $85/mo. I don't know, but if you're supporting kids, etc, it seems to me that you've got a strong case for a lower figure. Try the ombudsman unless someone else has a better suggestion.

I am not aware of any other way and I've extensively researched this topic.

Hi, some confusion above with me and another poster, however, I very happily worked out a rehab deal and stopped the garnishemnts, Yay!

I dont know if youve gone ahead with your plan already, but you might want to consult the ombudsman.

I had a very different experience working out a rehab deal.

I owe nearly triple the amount you do. They did not require a downpayment and even offered to have me pay less than the
suggested 1%.

A few years ago, I had someone strong arm me into something that was doomed from the start, big mistake but I learned my lesson.

You may have other, better options than being forced into something you dont feel you can afford. Many of these people only give you part of the info you need (i.e. lie) for their own self interest. Of course I dont know
your whole situation

Good luck!

S

Did they actually stop the garnishment already? I thought you had to make the voluntary payments for 12-14 months THEN they stop the garnishment.

I'm getting confused!

The job being guarnished was through a small agency.

After this happened, bingo! No more work for me so I was involuntarily layed off.

When I finally got a new perm job, I called within the first month and set up a plan before any order went through.

The weird thing is the guarnishment never showed up on my reports and has not to this day. My loans were handed over to a new CA so I am not sure what the deal is, but they say they have no record of the garnishment so I am not going to argue.

I dont know if there was some kind of goof on their part or if by changing jobs I walked (blindly) in to some kind of loophole. My understanding was
that the garnishment would stay until the loan was rehabbed.

I am not sure.