Firstly, thanks to everyone who reads and responds to this topic-- I've been on this board for more than an hour this morning and I feel like I might be STARTING to understand my situation a bit better, but I was wondering if anyone had enough personal experience to help me answer my questions...

I have a student loan that is now with a collection agency. The loans were taken out during the 2004-05 school year, and the last amount I saw (to be honest, I've just been throwing away the statements without opening the envelops... obviously, like most people who default on their loans, I have a tendency to live in denial at times, or to "avoid" problems that overwhelm me), I owed in the ballpark of 11,000 USD. I'm obviously at the point where my wages have been garnished, my tax refunds are withheld, and collection agencies call daily. At least, I'm assuming they're collection agencies- I don't answer the phone, and they don't leave messages.

Needless to say, I have dug myself into a hole, and for the past few years, I've been digging it deeper and deeper.

I have had some extenuating circumstances, financially, but I hadn't educated myself enough about the loan process to file for deferment when I dropped out of school to save myself from going into default status. The last (and only time) I worked up the nerve to talk to someone over the phone, I found out that I'd been in default since January of 2007.

Now, I'm getting mentally ready to face these financial skeletons-in-my-closet. My situation is a hundred times more stable, and I actually know what I want to do with my life, so I'm not just going to college without a plan. I'd like to go back to school for secondary education. I'd never be able to afford it without the help of financial aid (and I'm not exactly going to a private university or anything...). In my research, I came across a page on the DOE (I believe) website that talked about rehabbing defaulted loans by make six consecutive payments before you're able to apply for financial aid again.

1.) Has anyone actually taken this option, and been successful?

2.) Is it really six months? And if so, why do I keep seeing 9 months as the rehab time on this board?

3.) Is there REALLY a minimum payment each month, or do they look at your income? I ask because I've just moved to this state, and I've yet to find full-time employment. I want to get started paying right away, but I don't want to waste my time by letting a collection service agent know that I'm broke, only to have them tell me I still have to pay some ridiculous amount, starting NOW.

Thank you so much. I hope I can eventually be of some help to someone else on these boards, once I've gotten back into the swing of things...

(1) I have not, but in earlier threads, you'll find many people who have been successful.

(2) http://www.ed.gov/offices/OSFAP/DCS/rehabilitation.html - At least 9 months of on time payments, depending on the loan type. Note, these payments are IN ADDITION to any garnishments.

(3) The monthly payment is an agreed on amount. What that means - your guess is as good as mine.

Lynn, thank you so much for responding (thanks, indeed, to everyone so far!)-- the difference between the loan being rehabilitated and me being qualified to apply for financial aid is where I got confused. The financial aid is the part I'm worried about the most-- I'm nowhere near being at a point in my life where I want to purchase a house, or a new car. Obviously, I want to get started paying and I want to keep paying what I can afford every month once I do start. I'm so angry at myself for letting it get to this point, but at the same time I'm hopeful that I can turn things around, and my main focus is going back to school.

I'll keep searching through threads to see who's been successful in going back to school- their stories will certainly motivate me, and I'd appreciate anyone chiming in on this thread if you've been in this situation!

Ugh. Most people's New Year's resolution is to lose weight or kick a smoking habits. Mine's to go back to school. One step at a time...

I was in your exact situation a few years ago. I had to get my SLs in order to qualify for Pell grants, and now I'm 5 months away from graduating. Taking care of my SLs was probably the single best decision I've ever made. Affording those payments was tough, but totally worth it.

And ditto everything Lynn said