Any advice would greatly appreciated.

I've read around the forum since my join date trying advice given to others and submitted by some to negotiate with DCS about my defaulted Direct Loan. In short I have 4 loans about 2k each that have been in default since I hardship withdrew from school (enrolled 2000, hardship withdrew twice last attending 2003).

No payments ever made due to a number of reasons. This year they offset my income tax return (total amount only possible by birth of 1st child born in 07', child tax credit). And my stimulus check. I have been unemployed since Feb 07' living on no earned wages, and most months no income. I receive $298 in EBT Foodstamps benefits and will start receiving $236 in court ordered child support in October. At the moment I get about $85-100 total per month or so in contributions from family trying to help.

I've sent a financial status report twice to DCS, including all required documentation showing that I live well below poverty level, and cannot afford previous attempts of xk down 200 a month. In a previous letter a stated that I'm aware that a down payment is not a requirement and that Im requesting reasonable and affordable repayment options for loan rehab, and started sending $5 money orders.

They called me and stated I can only rehab for $119 month but I can keep sending whatever amount I want, it will not stop collection activities (offset, wage garnishments).

This is what threw me off. They have pages of documentation of my true finacial status, other bills and debts in collection, bank account -256.00.

Where is $119 monthly reasonable and affordable for a person who rarely has more the $85-100 on a monthly basis, with a dependent thats a toddler.

Is there a polite way to approach them with a more reasonable amount the enter into loan rehab per the Higher Education Act, which I already formally sent certified mail as guildlined in the Student Loan Law book?

Again I thank anyone who can help. I'm trying to get my life on track, I have behavioral health issues that detoured me for a long while and I'm trying to recover in all aspects of my life, finacially and mentally. Its difficult dealing with people with no regard to real life circumstances. That tax return was the largest amount of money I expected this year, and I took a hard hit and ended up in the ER behind the mindtrip that followed. I cant afford to let this happen again.

Well just to follow up I'm going with a Direct Loan Consolidation with an Income Contingent Repayment Plan. The claim is after I fill out the forms and mail them back in their pre-paid FedEx envelope, my payments will be $0 a month. After 2 months of $0 payments my account will be out of default.

The rep said collection activity will stop, no more offset or wage garnishment warnings (I earn no wages) and I will be eligible for financial aid, deferment, etc again.

I can only hope this is valid. This year I have been assigned to a total of 3 agents at DCS, the first being very nasty, the second being pretty decent but not helpful (at this point i had started sending $5 money orders to the center after sending a letter I had help in writing from the Student Loan Law book/cd requesting reasonable and affordable payments for rehab. They wouldn't budge below $119 at this time for rehab, no matter what I wrote or referred to in the student loan laws.

The current seems to be very polite and gave me her explanation of why I could not rehab, but told me about the Income Contingent Repayment option with a Direct Loan Consolidation. She had read the documents I sent in, along with the bills that were all past due, etc, and I also sent other supporting documents, prior to being assigned to her. She advised me that she would have me setup at $0 a month and told me how to "submit" payment by filling out a stub each month stating the zero amount. Then also told me that even when people she has helped start working, she's been able to negotiate payments as low as $7 a month.

Long story short the forms arrives Friday, they were pre-filled with my information (which she told me they would be), and I'm to call her so she can walk me through the forms, then send them back.

If anyone has heard of this type of offer or arrangement please let me know. It sounds like a good idea, at this point I know of know better way of dealing with my default loan. I believe it will not be removed from my credit report instead will reflect "paid in full".

Any advise or suggestions, I'm all ears. Thanks for reading.

Most of what they true and can actually be verified on the DL website. As a suggestion, it is actually faster to submit your app via the DL
website instead of doing a manual application.

FYI...when in collections, there is absolutely no such thing as a zero payment plan.....doesnt exist. You either pay or you dont.