Hooked up with Pioneer to rehab my Student Loans. Made 9th payment yesterday. They sent some Direct Loan papers which look like just a consolidation loan app. They have been harassing me since payment #6 to fill out these papers. I seem to remember years ago something about paying all 9 payments, and possibly a 10th or 11th before the CRA data is updated. Is this still true? They literally call me every other day trying to get me to send them this paperwork, assuring me that they need these papers to so that my my "reports can be updated, and I can receive all the beneifts of consolidation".

Any experts on this subject? I tried suearching for info on this specific to Direct Loans rehabs with little success. My original rehab document (simple fax) doesnt say anything about filling out consolidation papeers before the 9th payment.

Am I on the wrong track here? Is Direct Loans Rehab different in this regard? Any help you can provide would be helpful.

Don't sign them if you think they're consolidation papers. Consolidating before completing rehab (i.e., making your 9+ payments and waiting for your new loan to be funded) will negate all of the benefits of rehab.

I can't remember exactly what the paperwork was that I received when I finished rehab. It said something along the lines of "your loan has been purchased by so-and-so." I did have to sign some sort of rehab agreement at the end but I don't remember it looking like a consolidation application.

I'm sure someone else with come along and chime in with more info.

DO NOT SIGN THOSE PAPERS !!!!!!!!!! I speak from experience here with Pioneer. This is exactly the same as what they did to me and now I'm a cautionary tale. In my case, they sent me the consolidation paperwork around my 10th payment (this was before the law changed to make it 9 payments) and told me that this was the final step and to get them signed right away to "get my loan out of default and my reports updated to remove the default" - sound familiar? Being stupid and panicked at the whole situation and thinking that they were using all the right words to mean that my loan was about to be rehabbed, I did it and now, even after 12 payments (plus a "down payment"), I didn't get any of the benefits of rehab. Your loan has to be resold to another lender to actually complete rehab (the 9 payments just make you eligible for rehab; they are not rehab in and of themselves).

Call them and specifically tell them that you will not be sending the paperwork until you have confirmation that your loan has been rehabilitated. Also, by filling out the consolidation paperwork and sending it to them, you are letting them pick your consolidation lender. They're owned by Sallie Mae, so guess who you'll get? Yeah, all that and I'm also stuck with SM for the next 25 years!! You can do your own consolidation after the rehab is completed.

Just an FYI, you may have to make 1-2 payments after your 9th before the loan is transferred to the new lender. Make sure you keep paying on it until you receive the new loan documents from the lender. Another hint, check your loan status on the NSLDB. I also found out, long after the fact, that they reported one of my loan payments as being "late" and therefore made me ineligible for rehab. It wasn't the case, so it didn't help the situation. I'm not sure how it could be late when it was auto-debited - by them - and I never received anything from them that a payment wasn't received on time (probably because they all were!), so I would never have had a reason to check on it.

I hope this helps. Good luck!!!

This is along the lines of what I thought. I wasnt sure if it was different because one of the loan in default is a "Direct Loans" consolidation. The paperwork sent appears to be for a new Direct Loans consolidation.

Pioneer's "line" has been updated. I asked them in a straightforward manner if those were consolidation papers. (which they are), and would signing these interfere witht the rehab. They didn't even dance around the answer and seemingly lied to me straight up. I expected some sort of slick sideways answer that I could "accidently interpret" as something else. They claimed that my rehab wouldn't fund without this paperwork, and this was the only thing holding me back from updated CR's.

Thanks for the confirmation guys. My plan has always been to keep making payments until I get out of default, THEN consolidate. This makes me feel better about not answering their constant phone calls and holding out.

My loans with them were all Direct Loans (and, to be honest, I would probably recommend consolidating with Direct when it comes to that). However, I would not recommend ignoring their calls. You need to make sure that the loan is resold and rehab is completed. If they interpret your silence as being uncooperative, that won't help your case. If you have problems getting them to discuss rehab properly, then you may want to involve the ombudsman if you think that they are lying to you.

Actually, I'm not 100% that they are actively lying so much as having no idea what they're talking about, although it's all the same result on your end. When I had some questions about consolidation, I spent 30 minutes on the phone with the guy who was trying to explain to me how consolidation loans were never fixed interest rates, so they couldn't tell me exactly what my payment amount would be over the life of the loan because it would change every year when the interest rate was reset!

Good luck!!

I have tried talking those guys, and I have to answer their calls every other day, then its probably already time to get the ombudsman involved. Its already been communicated to them that I was not interested in consolidating early, and that sending these papers would likely interfere with that. Their attitude from the beginning, has indicated that they are not interested in exploring any other option. I will speak with them one more time tomorrow, and then look at the Ombudsman option this weekend.

Thanks for the additional followup. I was just getting very tired of debating/arguing the merits/drawbacks of consolidation every other day. I will take another stab at working with them, and we will see how it goes.


Thanks again!