I just made my first payment of $500. I have agreed to $500 for this month which I just paid, as well as $500 for the next 3 months. First they told me my interest was 18.25% YEARLY, now they're telling me it's 18.25% interest PLUS 25% interest from Sallie Mae monthly. I don't even know what to do, at that rate I will never be able to pay this off in my entire life. I'm already locked into payment agreements with NCO and I'm even more lost and confused about all this. Somebody please help me. I feel like ****.....

Your interest is 18.25% Your collection fees would be 25%, a one time charge.

The lady I'm dealing with at NCO, Neekina (sp) stated that both are monthly interest rates. She said the 25% is from Sallie Mae and the 18.25% is the NCO interest rate. I'm screwed. The most I can pay is the $500 for 4 months and $300 every month there after. I'm going to the school I attended and speaking with my financial aid counselor about all this. It seems like NCO is trying to f**k me or something, damnit, I don't even know anymore.

The lady who works at NCO is an idiot. Collection charges do NOT accrue monthly. When they quote the balance to you, that will include the collection fees. When you make a $500 payment, 25% goes to NCO as their fee, accrued interest is paid next, and then anything remaining goes to principal. This is the price you pay for defaulting.

Talking to an FA counselor wont help as most FA's dont deal with loan repayment. Read your prom note.

So here's what I got from my FA counselor and Sallie Mae. My interest rate is a variable rate currently at 18.25%, the variable will change on July 2008. Sallie Mae told me the 25% is a one time collection fee, I've been told this by you guys here as well as a couple other sources, but the collector at NCO was arguing with me that that's not the case. As far as how much interest I accrue monthly, here's the formula I was given: principle*interest/365*30=monthly interest. So, as of now, I'm currently paying $92.48 a month on interest alone, with making $500 payments for the next 3 months and $300 thereafter. Sallie Mae is sending me an official document with all of this information. I will then send it to NCO, and if they beg to differ, I'll stop paying them and tell them to sue me, then we will see what happens from there.

Again the collector is an idiot. She obviously knows nothing about accounting. Sallie Mae still owns the account and the only thing that matters is how THEY apply the payment.
Do not stop paying....they WILL sue you and you have no valid defense. What an idiotic collector "told" you means diddly.