Hello all.

I am going to contact the collection agency for my defaulted direct student loans (2). I have noticed that the payment must be reasonable given my income/expense situation. However, from reading this forum, it seems as if the collecttion agencies routinely take 1% to 1.5% of the balance for the monthly payment amount during the loan Rehab period. Can someone please verify that this is what I can expect in the way of a payment amount. Is 1% standard?

Thanks.

Yes, 1% is standard. How much do you owe? Is 1% doable for you? Remember, it's 1% of the entire amount due, including fees, interest, penalties, and principle. Make sure it's something you can live with for at least 10-11 months (there are 9 payments to qualify -- actually, 12 for Perkins loans -- and then it can take 1-2 months before your loan is resold). Generally, 1% is what they'll take without a lot of hassle and without financial disclosures. You can get less, but you'll almost always need to give them a budget and copies of your paystubs.

Hope this helps. Good luck with rehab!!!

Thanks for the info / confirmation. I owe approximately $24,000 and luckily I can afford to make these payments and get this thing rehabbed and off of my credit.