Who do I owe?

[SpectreFE]

I have defaulted on 6 student loans all of which are Stafford subsidized or unsubsidized. While I realize that I need to fix this ASAP, I'm confused about one really important issue, who do I talk to?

 

I visited the National Student Loan Data System today to obtain the most accurate (hopefully) data I could find. The 6 defaults all have the same current Guaranty Agency, USA Funds Inc. Over the last 4 months I have been dunned by 2 companies, Van Ru Credit Corp and FMS Investment group. I sent Van Ru a DV letter on 3/31/14 to which they sent a very basic, single line invoice. On 6/3/2014, I sent FMS a DV which has yet to be answered.

 

My initial thought is to call USA Funds and work with them and only them on a Rehab program.

 

Thoughts???

 

Thanks!!

 

Spectre

[hodap2001]

You must set-up Rehabilitation with the assigned collection agency - since you have loans with two different collection agencies you will need to contact both of them to set-up rehabilitation. USA Funds will automatically refer you to these collection agencies for resolution.

 

Good Luck!

[SpectreFE]

Thanks Hodap.. I talked to SM this morning and they told me I had to negotiate with the CA. That being said, the loan amounts are much different in NSLDS vs what is on my CR. Does the MPN have a specific amount that the CA can add to the loan? What can cause an addtl $10K in collection fee's?

 

 

Thanks!

[hodap2001]

Yes, your master promissory note that you signed and agreed to the terms and conditions and the consequences of default does stipulate that you are required to pay for late fee, collections charges, court and attorney fees, and other relevant charges to the recovery of the defaulted student loan; therefore, the collection cost is currently 19.58% which is written in Federal Regulations, so this can definitely be the reason of the increase including court and attorney fees if they referred your account for Tax Offset and Administrative Wage Garnishment.

 

How long have you been defaulted for? Also, it is important to note that the GA's (USA Funds) report to NSLDS every 30 - 60 days and that information comes directly from their assigned collection agencies which can cause a different in outstanding principal balance owed - the real amount owed can be obtained by the Collection Agency.

[SpectreFE]

Hodap,

 

The default dates in NSLDS are all the same, 3/29/13. As of yet, there has been no court action, garnishment or tax-offset, I'm considering myself very lucky at this point. I intend to contact them tomorrow to pre-empt any action other than what I agree to with the CA. I have also read through all of the financial options and realize that the "normal payback is the best option due to it's length of term.

 

Given your background, if you could provide any special considerations to entering a rehab program, it would be greatly appreciated..

 

Spectre

[hodap2001]

For rehabilitation I urge everyone to have their ducks in a row before making that contact with the CA to set-up rehabilitation. Please ensure your financial circumstances is well laid out and provable - what I mean is to show your provable income and expenses as this will be used to determine your monthly rehabilitation amount. Write up a list of all of your monthly expenses and do not over exaggerate (i.e. $200 for clothes) and whatever is left will help determine what you can pay under a reasonable and affordable repayment plan based upon this information. Now you must understand that your monthly payment will be between 1 - 2% of your overall total balance including late fees, collection costs, etc; however, this amount can be lowered based upon your financial circumstances. It is also important to note, that the CA may request an initial down-payment to begin rehabilitation; however, there is no federal regulation requiring such an act, but they are allowed to ask for it; therefore, if they are persistent, please hang-up and try another CA rep to assist you or escalate the call to a supervisor and inform them of this fact. Once you have an agreed upon repayment amount for rehabilitation, they will send you a confirmation letter/agreement that will recap the telephone conversation. You must make your payments on time, every month for the next 9 months before your account is eligible to be removed from default and reassigned to a new Federal Loan Servicer. Once this is accomplished the default will be removed and you will be given a new trade line with the new Federal Loan Servicer. Please note, the OC can and will legally report derogatory remarks for 7 years from the date of default.

 

I hope this is helpful to you!

 

Please let us know if you run into any trouble - but it should all be very easy and straight forward.

[SpectreFE]

Hodap,

 

I can't thank you enough for your help and invaluable information. I'll follow-up with the result in the next few days...

 

 

Spectre

[hodap2001]

Awesome!

[havenlong29]

This is really great. Thanks!

[hodap2001]

Your welcome!

[SpectreFE]

So, the saga continues....

 

I'm trying to work with the CA on setting up a rehab however, I'm not as successful as I hoped. The CA is asking for an immediate down payment to "Work this out" and that I will be sued then garnished if I don't. I asked for a supervisor, was placed on hold for 20 minutes then the same agent returned stating "No supervisors were available". I told her I'd call back.

 

I have one question before I call them back, should I have DV'd the CA?

 

Thanks,

 

Spectre

[hodap2001]

You must speak to a supervisor and inform them that federal regulations DO NOT require a down-payment to set-up for Rehabilitation and if they do not set you up in Rehabilitation you will be forced to contact the Federal Student Aid Ombudsman Group and the Consumer Financial Protection Bureau. They may request a down-payment all they want, but Federal Regulations do not require it! Please reference C.F.R. 682.405 http://www.law.cornell.edu/cfr/text/34/682.405.

 

This is a federal debt; therefore, you don't need to DV them...its just a waste of time and should be used for other types of debt (i.e. credit card, etc.)

 

Here is the contact info for FSA Ombudsman and CFPB:

https://studentaid.ed.gov/repay-loans/disputes/prepare/contact-ombudsman

http://www.consumerfinance.gov/complaint/

 

 

Good Luck!

[evapor8ted]

No down payment for rehab is required. Get them to send that to you in writing. They won't. Before you go through a lot of work complaining, roll the dice again, call at a different time of the day, and talk to someone else. Bad customer service can happen to anyone.

 

If it happens again you can contact USA funds, they should have an ombudsman themselves you can communicate with.

[LynnInMN]

They can ask for a downdayment but they cannot make it condition of rehab. Call the main number of the collection agency and ask for a manager...ask for his name and position before talking to him. If he does not comply, then file a complaint with the ombudsman.

[SpectreFE]

OK, my apologies for not replying....I contacted the CA again with a much better result. I'm now 3 payments into my rehab prgm and on my way to getting the remaining baddies of my CR (all SL)..

 

Thanks to everyone who made inputs, especially Hodap & Lynn..

[hodap2001]

Your most welcome and good luck!!! This made my day!!

[SpectreFE]

Just one more thing.....

 

On all 3 of my CR's, I now have 4 different entries all having the same "opened" date...

 

-Sallie Mae. Reporting as "Closed, account transferred or Sold"

-USA Funds. Reporting as "Placed for collection, Collection account"

-SLM Financial Corp. Reporting as "Closed, account transferred as sold"

-Dept of ED/SLM. Reporting as "Current, was 180 days late"

 

Why do I have 4 different entities reporting on my SL's ?.....Now, I do have 6 that were in default (addressed above) and 6 that were late but are now current.

 

Spectre

[hodap2001]

Actually they are all the same - they are not different entities, all are being reported by Sallie Mae and their Guarantor USA Funds. Is this post-rehab reporting or current reporting? You can probably get away with disputing them for duplication - just a thought.

[SpectreFE]

Hodap,

 

This is current reporting. I had thought about disputing them for duplication as well so I will take that route and see what happens.

 

Spectre

[hodap2001]

Good luck and keep me updated!

[SpectreFE]

Will do!!

[hodap2001]