So hubby has 2 rehab payments left. one this month and one for aug. his loans were originally thru direct loans, so from reading the threads my understanding is that they will go back to direct loans correct? im asking because hes a tad confused because the way they made it seem is that they would try and find a new lender to buy his loans.

also, is it the norm that his payments will be less when they do get funded than they are now on rehab? or will it really just depend? it would truely suck if they went up. o.o

annnd, if they do go back to direct loans what happens to the 7 collections he now has listed from when the loans went into default? will they stay and then hell have the new good line showing in his credit? this is kind of an important factor because these 7 collections are keeping us from refinancing that whopping 25% auto loan.

anyway, its good to feel like were accomplishing something!

In my situation, after rehab the loans were sold to another lender. Then they reach out to you regarding payment. As far as I know, all lenders will automatically sign you up for a 10 year payment plan so in that case the payments might be higher. However you have the options that any loan borrower has when their loans are out of default status, meaning you can pick a different payment option, such as an extended graduated plan, which start off with extremely low payments and increase every 2 years. Also after the loans are rehabbed, you can always defer depending on your financial status. Also you might be able to consolidate them in order to get lower interest rates. However the only place I know consolidating now is Direct Loans so I don't know how that would work if you had already defaulted once with them.