I have two federal loans currently in default. I have contacted one of them to get an amount to get it rehabilitated but it is way too high. I told her that when I talked to her but she insisted that she couldn't make the amount lower. I called the Department of Education but since I had previously consolidated my loans, it is out of their hands. I tried calling the agency that holds the loans and they told me that I have to work with the collection agency, I can't set anything up through them.

The other loan is quite small and I'm sure I can work on a payment arrangement for that one that I can afford.

I've also read online that I can consolidate again and "start over" with an income variable plan.

I read all the links that are posted at the top (that is what has gotten me this far) but so far no one I have spoken to has really helped me at all. I hate to call the collection agency because they are VERY rude to me, but that seems to be my only option. Does anyone have any insight on what I can do aside from contacting them?

you have to work it out with them. Under the Higher Education Act, you are entitled to reasonable and affordable payments to rehab your loan. You must use those words. They will ask for a financial statement of your household expenses...and it should be geared to inome.