How can I arrange affordable payments to rehabilitate my loans?

I currently owe a total of $250,000 on two Federal Direct Consolidation Loans that have been in default since 2003. I have been out of country since 2002 volunteering in Africa with an NGO in the distribution of malaria netting in various rural tribal villages in Botswana. I will be returning to the US in June of 2012 to work with a 501(c)(3) corporation that works with the raising of funds for the Malaria netting program. I will be making a little less than $25,000 per year. They informed me about the Public Service Loan Forgiveness (PSLF) program that was instituted in 2007, where I can have my loans forgiven if I work for 10 years and make income based payment to the government. Unfortunately, I first have to get my Federal Direct Consolidation Loans our of default. The loans are currently with DCS. I plan to call them now that I am back in country for the holidays. Can you give me any advice as to how I can arrange affordable payments to rehabilitate my loans?

I know that I have the right to make reasonable and affordable payments for 9 out of 10 months in order to rehabilitate my loans and get into the PSLF program, but from what I understand DCS plays hardball, and I don't have any income currently other than the small stipend I get from my grant to do the work I'm doing ($700 per month). Do you have any insight into how best to get them to work with me on the rehabilitation payments. I know I can call the ombudsman's office if they fail to act reasonably, but I doubt that will do any good.

Any advise as to how to best approach this rehabilitation process would be much appreciated.

A standard payment for rehab is $250 per month....your interest assuming a 6.8% interest rate is around $145 per month. It is not that DCS is playing hardball....they have standards they have to meet including qualifying for the rehab. Reasonable and affordable payments is a two way deal....affordable to you but reasonable to the collection agency based on your balance. Quite frankly, since you live out of the county and your income is so low, you probably not going to get a rehab since you are not living or working in the US. You are too much of a re-default risk. The ombudsman is not going to side with you. You made the choice to do volunteer work instead of paying your obligations. You will probably just need to wait until you reside permantently back in the US with a real income.

I talked with DCS and they gave me a minimum payment of $1,750 per month to rehab my loan. Given my income of $700, that is neither fair or reasonable. I told them that I was told by an "expert" on this site that I could make a monthly payment of around $250 per month (which I can do with the help of my family), and the call taker just laughed. She then put her manager on who told me that $1,525 was the lowest they could go according to Dept. of Education guidelines (which I highly doubt is true), and then proceeded to berate me for being a "deadbeat dogooder". I then called the Federal Ombudsman's office and he referred me to the Ombudsman of DCS, who I will call tomorrow.
I know that you feel that I need to wait until I am back in country permanently, but I want to start the rehab process now, so that I can get right into the PSLF program when I start my nonprofit job in June.
Any advice on what to say to the DCS Ombudsman or how to get the payment down to a more manageable level (I could even go as high as $500 according to my family)?

I am sorry....I misread your loan balance. DCS IS correct. Your interest per month is $1400 plus so a standard payment would be $2500 per month for a rehab....what they quoted for reasonable and affordable for a rehab is correct. Honestly, I would suggest going right back into a Direct Loan consolidation when you return....you wont qualify for rehab with the payments you are offering.

I have been working crazy hours.....