Long post, but the history is needed--
I incurred tons of student loans throughout the '80s, ignored them forever (had very low income), all of the negs eventually fell off my credit report. In 2002, I rehabbed what I thought were all my loans (8 of them) through the Debt Collection Service (DCS) and sent my checks directly to the US Dept. of Ed. and have never had any problems with them. I haven't tried to consolidate, as I fear this would increase my payments from the current $150/mo on $38K in loans.
In late 2003, the university I'd attended contacted me, saying that I was in default of a Perkins loan. I explained that I was in rehab on all of my loans, but was told the school (the OC) held this loan, that it was separate from any other federal loans, and that it wouldn't have been part of a rehab. I went around with the school from Jan '04 through May '04, during which time they began having General Revenue (GR) to try to collect on their behalf. I sent GR a copy of a letter that I'd sent to the University, asking for verification of this debt, and did a limited C&D and DV to give me time to try to work with the school.
In one of the letters from the school, they sent a copy of their rehab plan, but it specifically covered dates long after I'd incurred that loan, but still didn't send any verification (and I've never received validation from the CA either). The school was not willing to accept the payment I was offering. I continued to respond to their letters, completed the school's income forms, etc., but they wanted far more than I knew I could pay under the rules for rehab. At one point, they even sent me a letter that said, "The Dept. of Ed. recommends paying 5% of monthly gross towards student loans." I reiterated that if they looked at my previous correspondence with them, I was already paying 7% towards these loans. I offered to pay them $40/mo. for a rehab, which brought my monthly loan payments to 8% of my income, between Perkins and Stafford loans, and they still wouldn't budge. I kept telling them that I wanted to rehab and that when my 12 consecutive, on-time payments were up, that I would then consolidate all 9 loans. The University refused to accept my payments--never returned the checks, but didn't cash them either. They just kept demanding that I pay much more, or that I could deal with the collection agency.
Well, now in Aug. '04, GR has never validated, my requests for original documentation from the schood have never been verified, and suddenly I get a letter from a different CA, Williams & Fudge, asking for 4x the amount. Now, the new CA (if indeed General Revenue is no longer trying to collect) sent me a bill, along with a nearly-completed consolidation form. I'm finding great humor in this, as the letter/bill says, "the enclosed material provides a brief description of some of the "BENEFITS AVAILABLE". What is the *description* you ask? It's a FFELP loan consolidation app/promissory note--no descriptions anywhere. They haven't even offered me rehab. Worse yet, the only blank sections on this form are highlighted areas to list 2 references and to sign! It's as if they're hoping I'm stupid.
What the heck should I do? I know I need to rehab first. [Since none of 8 rehabbed loans even show up on my reports (which may be a good thing, as it would probably tank my score as the balance exceeds my annual income), and only my only negative on any of the CRA reports is where TU shows the university collection, but doesn't indicate that it's a student loan,] I'm wondering how to approach this? Do I bother trying to negotiate the $40 amount with the collection agency? Do I send them a nastygram with a limited C&D, along with a DV, and indicate that I'll be contacting the Dept. of Ed. Ombudsman's office to help me straighten this all out? I'm wondering if they have copies of all my correspondence to/from the university in their files? What sections of the HEA apply to this situation?
I know that everyone says to provide as little information as possible to CA's so I'm wondering what approach might work the best.
I just recently began posting, so I'm hoping the experts can help.