Just looking for info and opinions....

I went to a mortgage counselor last night with my wife and I need some information on if the information I received is legit? I just started a rehab program thru GC Services for my defaulted student loans. In the loan documentation and on the NYS Higher Ed website it states you could be penalized with an 18.5% penalty for collection costs. GC Services in turn added or will add nearly $10,000 to my orig loan balance of $52,000.

Now my question...The mortgage counselor when I told her this says I could have located another lender and refinanced my student loans, paid off the NYSHE and not dealt with GC Services? Thereby saving $10,000 in collection costs. She stated lenders would have been likely to finance since they are gov't backed.

comments and advice please...

By the way, I saw in another post you applied for an FHA loan. You are ineligible for FHA loans until the loan is out of default so you are looking at another 9-10 months. If you did not tell them about the student loan, they will find it when they run you thru the data base.

I have a loan with that same group NESC.org and I won't go into their rehab program. I'm paying them monthly and should be paid off in the next two years. Why should I refinance my loan and tack on even more interest?

The only reason is they supposedly remove you from default status, but I don't trust them.

How do you figure they'll tack on more interest? If you can afford to pay it off in two years, you can still do so if you rehab while reaping the benefits of rehab. If you complete rehab, not only will you be out of default, but the guarantor will remove all previous default notations. And once you're out of default, you'll have more repayment flexibility, such as the option to defer payments should your financial situation take an unexpected turn. The decision is yours, of course, but it's in your best interest to make sure you fully understand your options and how rehab works before making that decision.

I dont understand your logic either. Interest is going to continue to accrue daily whether you stay in collections or rehab the loan. NESC doesnt do any of the interest calculations,that is another function of the guarantor. It can be added to your account monthly or quartly, depending on how often the guarantor transits the information.

NESC doesnt offer a rehab program per se...they only facilitate it on behalf of the loan guarantor. Rehab is written into federal law

If I had known about the benefits of rehabbing back in Nov of 2006, I'd have let my fed SLs default (I was a day away from 'default' status). Instead, I reconsolidated, thinking I was saving my credit, and am paying as agreed, yet have to deal with 14 negative trade lines with all those 120+ day lates. Aw the power of hindsight!

One thing I will grant to Educ. CAs, they have to walk a very perscribed course in collecting defaulted debt. I am sure some of the scum suckers are out there, but the consumer, if they educate themselves has many more protections available to them in this regard.

Your logic is totally off and you were better off NOT defaulting. Rehabbing only removes the negative tradelines fro the guarantor, you pays your claim after you default. it does absolutely nothing for the lender or servicer who is still reporting your lates now instead of a default.

That's good to know then! I've been reading about people defaulting and getting through rehab to have their deficiencies removed wondering if I made a mistake. A lot of the advice here seems to suggest that all negative TLs associated with a rehabbed SL go bye bye once rehab is complete.

My SLs were originally guaranteed through GLHEC - they sold the loans to Sallie Mae in 2005, yet continued to service them through Jan 2006 - i was told by great lakes reps and a few supervisors on numerous occasions that they only serviced my loans, they no longer owned them. My TLs (for 2 loans one sub/one unsub) went from GLHEC to "Sallie Mae - GLHELS" on my reports. This also turned my 2 TLs into 14, which were broken down into disbursement dates. In Jan of 2006, Sallie Mae took the servicing back from GLHESC and 14 new TLS appeared as Sallie Mae. Because I was unaware of this transfer, I kept paying GLHELS while nearly going to default with SM. I was set to auto pay through my bank with GL, and SM said they don't know how, but I wasn't set up in their billing system to recieve paper statements (like it should have), I was getting e-bills sent to a non-valid educational email account from grad school (even though GL had my current personal for their servicing and e-billing.

So on my CR I have:

2 "GLHEC" - one sub and one unsub - closed both paid as agreed

14 "Sallie Mae - GLHELS" - 7 sub and 7 unsub all closed & paid as agreed

AND 15 Sallie Mae - 7 sub, 7 unsub - closed & 120+ late from Feb 06 to Nov 06, and 1 consolidated loan that is paid as agreed from Nov 06 to now.

So, let me see if I understand what you have said correctly: if I defaulted, I would have had not only the negative servicing tradelines, but possibly up to 14 more negatives from SM (or possibly GL) as guarantor while paying through rehab? And once I completed rehab, the guarantor's negative TLs would go away, yet the neg servicing TLs would stay?