I'll be using this thread to share my story and will continue to update it with things learned and progress made. I'll also be looking for help and suggestions, and yes I am and will continue to research through this site. This is actually my husband's loan.
We were making payments before 2004.
Sallie Mae balance in 2004 $53,000
We filed bankruptcy in early 2005.
SL is currently in default.
CA is OSI Education Services, Dublin, Ohio.
Current balance is now $86,500 (with interest and collection costs).
We just started working with the CA.
CA has stated that wages and IRS tax return have been garnished but we have yet to see this.
Is there any way to get some of these collections costs waived before we agree to pay anything?
CA has sent us the paperwork for the William D Ford Federal Direct Loan Program. I have been reading the paperwork and thus ended up back here doing some research. As I understand things, this is a consolidation program. If I am reading correctly however, the loan must be rehabbed first? but the CA didn't send us anything about the rehab.
Now if we agree to the rehab and complete it, can't we just continue then making payments without consolidating the loan? If I understand correctly, once the rehab is completed, the loan is sold to another lender. Could we then apply for income sensitive payments with the new lender?
I'm not sure I understand the point of consolidating when we only have 1 loan to begin with.
Right now I'm not sure what to do.
That's it for now.....going back to doing some research.
More
I read on another thread:
"They will allow you to consolidate defaulted loans, you just have to go on the income contingent payment plan, .... And, after 25 years, if you haven't paid off the loan, whatever is left is forgiven. You'd have to pay taxes on the forgiven amount."
Is this true only if we consolidate????
Full Version: My Sallie Mae Story of Default - Help!
QUOTE(QueenLeen @ Sep 19 2007, 09:18 AM) 
I'll be using this thread to share my story and will continue to update it with things learned and progress made. I'll also be looking for help and suggestions, and yes I am and will continue to research through this site. This is actually my husband's loan.
We were making payments before 2004.
Sallie Mae balance in 2004 $53,000
We filed bankruptcy in early 2005.
SL is currently in default.
CA is OSI Education Services, Dublin, Ohio.
Current balance is now $86,500 (with interest and collection costs).
We just started working with the CA.
CA has stated that wages and IRS tax return have been garnished but we have yet to see this.
Have they started the garnishment process?? If they state they have started garnishment, the 30 day notice to you should have been sent to you already.
Is there any way to get some of these collections costs waived before we agree to pay anything?
Nope. The only way that collection fees are waived is if you settle the debt. Even with rehab with a FFELP loan, the collection fees are rolled in.
CA has sent us the paperwork for the William D Ford Federal Direct Loan Program. I have been reading the paperwork and thus ended up back here doing some research. As I understand things, this is a consolidation program. If I am reading correctly however, the loan must be rehabbed first? but the CA didn't send us anything about the rehab.
No. You do not have to rehab first. For credit reporting purposes, for some it is better to rehab first as the guarantor negative comments are removed from your CR. However, if garnishment has started, you CANNOT consolidate.
As far as I know, OSI sends nothing on rehab. You have to ask to enter the program but even then OSI does not (or didnt in the past) send a rehab agreement. CA's do not have to send anything.
Now if we agree to the rehab and complete it, can't we just continue then making payments without consolidating the loan? If I understand correctly, once the rehab is completed, the loan is sold to another lender. Could we then apply for income sensitive payments with the new lender?
You could just stay with the rehabbing lender but with a balance like yours, it might not be affordable. FFELP lenders income sensitive payment plans are very different from DL's income contingent plan. A standard 30 year payment is about $550 per month for 30 years. What you dont pay now, you have to pay later, so your payment plan would continue to go up! With DL, after 30 years in repayment, whatever is not paid off is discharged. Not so with a FFELP lenders loan.
I'm not sure I understand the point of consolidating when we only have 1 loan to begin with.
Right now I'm not sure what to do.
That's it for now.....going back to doing some research.
More
I read on another thread:
"They will allow you to consolidate defaulted loans, you just have to go on the income contingent payment plan, .... And, after 25 years, if you haven't paid off the loan, whatever is left is forgiven. You'd have to pay taxes on the forgiven amount."
Is this true only if we consolidate????
We were making payments before 2004.
Sallie Mae balance in 2004 $53,000
We filed bankruptcy in early 2005.
SL is currently in default.
CA is OSI Education Services, Dublin, Ohio.
Current balance is now $86,500 (with interest and collection costs).
We just started working with the CA.
CA has stated that wages and IRS tax return have been garnished but we have yet to see this.
Have they started the garnishment process?? If they state they have started garnishment, the 30 day notice to you should have been sent to you already.
Is there any way to get some of these collections costs waived before we agree to pay anything?
Nope. The only way that collection fees are waived is if you settle the debt. Even with rehab with a FFELP loan, the collection fees are rolled in.
CA has sent us the paperwork for the William D Ford Federal Direct Loan Program. I have been reading the paperwork and thus ended up back here doing some research. As I understand things, this is a consolidation program. If I am reading correctly however, the loan must be rehabbed first? but the CA didn't send us anything about the rehab.
No. You do not have to rehab first. For credit reporting purposes, for some it is better to rehab first as the guarantor negative comments are removed from your CR. However, if garnishment has started, you CANNOT consolidate.
As far as I know, OSI sends nothing on rehab. You have to ask to enter the program but even then OSI does not (or didnt in the past) send a rehab agreement. CA's do not have to send anything.
Now if we agree to the rehab and complete it, can't we just continue then making payments without consolidating the loan? If I understand correctly, once the rehab is completed, the loan is sold to another lender. Could we then apply for income sensitive payments with the new lender?
You could just stay with the rehabbing lender but with a balance like yours, it might not be affordable. FFELP lenders income sensitive payment plans are very different from DL's income contingent plan. A standard 30 year payment is about $550 per month for 30 years. What you dont pay now, you have to pay later, so your payment plan would continue to go up! With DL, after 30 years in repayment, whatever is not paid off is discharged. Not so with a FFELP lenders loan.
I'm not sure I understand the point of consolidating when we only have 1 loan to begin with.
Right now I'm not sure what to do.
That's it for now.....going back to doing some research.
More
I read on another thread:
"They will allow you to consolidate defaulted loans, you just have to go on the income contingent payment plan, .... And, after 25 years, if you haven't paid off the loan, whatever is left is forgiven. You'd have to pay taxes on the forgiven amount."
Is this true only if we consolidate????
They said something to my husband about the garnishment, but we haven't received anything yet.
OSI did mention rehab to my husband and that is what I thought we were going to be getting info on in the mail. But when it came, it was the consolidation forms.
At this point i'm thinking we need to do a rehab and consolidation.
Do I need to request the rehab directly with Sallie Mae then since you said OSI may not send the paperwork? Should I start the rehab first before signing any of the consolidation forms?
You mentioned that with DL after 30 years the remainder is charged off. I read on another thread that is is after 25 years. Where can I find more info on this???
OSI did mention rehab to my husband and that is what I thought we were going to be getting info on in the mail. But when it came, it was the consolidation forms.
At this point i'm thinking we need to do a rehab and consolidation.
Do I need to request the rehab directly with Sallie Mae then since you said OSI may not send the paperwork? Should I start the rehab first before signing any of the consolidation forms?
You mentioned that with DL after 30 years the remainder is charged off. I read on another thread that is is after 25 years. Where can I find more info on this???
QUOTE(ziggypop @ Sep 17 2007, 10:30 PM)
QUOTE(creditconqueror @ Sep 17 2007, 08:09 PM)
Hi All,
3) From what I have been reading, an acceptable payment without too much resistance would average about 1%. Would that be of the principal or the total amount outstanding which includes collection costs? I could comfortably afford $250-275 a month but $360 would be pretty painful.
It's 1% of total owed, so it would be the $360. If you need a lower payment, you'll have to give them more information on your finances. I gave them a breakdown of my whole budget and showed them what I could afford. You may have to give them paycheck stubs as well -- I had to give them my 2 most recent. I just made a spreadsheet with everything I spend in a month and showed them exactly what was left over for a SL payment. Don't lie, but don't leave anything out, either. Make sure that it's something that you can afford, maybe with a *little* pain, so that you won't miss any payments.
3) From what I have been reading, an acceptable payment without too much resistance would average about 1%. Would that be of the principal or the total amount outstanding which includes collection costs? I could comfortably afford $250-275 a month but $360 would be pretty painful.
It's 1% of total owed, so it would be the $360. If you need a lower payment, you'll have to give them more information on your finances. I gave them a breakdown of my whole budget and showed them what I could afford. You may have to give them paycheck stubs as well -- I had to give them my 2 most recent. I just made a spreadsheet with everything I spend in a month and showed them exactly what was left over for a SL payment. Don't lie, but don't leave anything out, either. Make sure that it's something that you can afford, maybe with a *little* pain, so that you won't miss any payments.
If we want a lower payment and need to provide financials, do they consider my income too as the wife? If not, which I'm hoping is the case, then how do we show expenses? split them 50/50?
QUOTE
Do I need to request the rehab directly with Sallie Mae then since you said OSI may not send the paperwork? Should I start the rehab first before signing any of the consolidation forms?
Sallie Mae is no longer party to this loan. When you defaulted, your guarantor paid off Sallie Mae.
There is NO paperwork for rehab. Some lenders send paperwork...OSI to my knowledge does not. Technically a repayment agreement to enter into rehab holds no water as it is not a legal requirement. The only docs that count are the ones you sign after the 9 payments.
A standard payment to qualfiy for rehab for your loan balance is 1% or $860. It you want lower, you will need to provide a financial statement which includes all household income and expenses, whatever they request.
Yes it is generally better to rehab before consolidating.
It is also 25 years for the write off.
thanks, one more question
If we do the consolidation, does that now make me as the spouse also responsible for the debt since it will be a new loan that he entered into during the marriage??
If we do the consolidation, does that now make me as the spouse also responsible for the debt since it will be a new loan that he entered into during the marriage??
QUOTE(QueenLeen @ Sep 20 2007, 01:08 PM)
thanks, one more question
If we do the consolidation, does that now make me as the spouse also responsible for the debt since it will be a new loan that he entered into during the marriage??
If we do the consolidation, does that now make me as the spouse also responsible for the debt since it will be a new loan that he entered into during the marriage??
No.
No, but if you are on the income contingent repayment, they will consider your JOINT tax return when setting the income based payment.
Took me FOREVER to get my ex spouses income disallowed after our divorce.
Took me FOREVER to get my ex spouses income disallowed after our divorce.
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