I first began my contact with Pioneer when they threatened me with garnishment last September.

Originally, I agreed over the phone to the rehabilitation program. However, they failed to tell me about a second ACH deduction that would be taken out the first month (I later found out they require a "down payment.") They agreed that the second payment was not discussed and agreed to restart my repayment plan.

But now, I'm nervous and want some feedback before I go through this again.

I have requested the repayment info in writing before agreeing to the rehab program again, but they refused. Am I within my rights to go over their agreement paperwork prior to handing over my account info?

Also, I have researched a little about rehab-ing Federal Student Loans, and no where does it say I need 10 payments over the course of 9 months. Can Pioneer require this extra payment?


Thanks in advance; Any feedback is welcome.

They can request as many payments as they want...however there is nothing in the HEA that REQUIRES a down payment or additional payments.

They are not required to send you a payment agreement. In fact in most cases they are not permitted to since any written payment arrangement would be in violation of your original promisorry note.

So am I in my right to say "no" to that additional payment?

I just finished rehabbing my student loans in December and let me say it has really helped my credit. So you will definitely be glad when your loans get taken out of default. A couple of things I wanted to mention. First, I would never give your bank info when rehabbing a loan. Keep in mind these are slimy collection agencies that will try to bilk as much money out of you as possible. I just went ahead and paid with my debit card (cost an extra 10 bucks or so to process a card payment) but at least I felt safe knowing a collection agency didnt have access to my bank info.

Secondly, most collection agencies will bring up a down payment because if you can pay that, it makes the collection agency look better to the lender who hired them to collect from you. If you don't have the money for a down payment, just tell them that and most of the times they'll accept the fact they're not getting a down payment. Just tell them that if they won't do that for you, then you'll just go ahead and consolidate your loans rather than rehabbing them.

Finally, depending on when your payment posts (ie: the lender is notified a payment has been made), in some cases you will need to make 10 payments instead of 9 to successfully complete rehab. I was informed of this as well while I was rehabbing my loans. What I did to prevent from having to make a 10th payment was to pay the 9th early. So if you're payment due date is for example on the 15th of each month, try to get that last payment in a week or so early so you know that last payment will post, and your original lender is notified that rehab is complete. Once this is done, stay on them (the original lender) to make sure they update your files at the credit bureaus. I believe they have upwards of 45 days to do so, but in most cases they will take care of it right away.

Good luck with everything

Wonderful! Thanks for the help, everyone!