Ways to communicate...

Hello, I have a $8000 student loan that was done with Sallie Mae that since has been in default for a couple years now...

Recently I got a letter in the mail from NCO Financial that they would be starting the process of collection of the defaulted loan by Treasury offset in 65 days if I do nothing.

I really want to take care of this but I know I can't make the payments they'd want. So, after doing some research on this site I want to ask them if I can make payments by citing the Higher Education Act and the Student Loan Ombudsman that way I know I can at least manage to pay them something and get this whole process started.

I'm just wondering if I can do all this by typing up a letter and sending it to NCO? I just hate telephones and even worse talking to people about money over the phone... I'll bite the bullet though if I have to but I'd much rather do it with the letter that way I'm sure of what I'm agreeing to because sometimes talking to people things can get cloudy for me at least...

- Brandon

I work in education and I can tell you that communication is key in getting these things taken care of. Student loans are serious debt and can cause you a lot of trouble. Have you tried getting them deferred? You shuodl probably call NCO and try to set up a payment plan that works for you.

nope...they will not negotiate via mail and there is a reason for this. The CA cannot and will not put in writing any agreement that implys a payment plan....part of this stems from the fact that they cannot alter or change the terms of your promisory note.

You can cite any references you want but you have a prom note whereby you agreed to balance in full on demand. Unless you are specifically asking for the rehab program, you do not have any rights to paying them something. Paying them something with out an oral payment plan will not prevent wage garnishment or treasurey offset.

With a $8k balance (you didnt say whether this is the original balance or the current balance updated with interest and collection fees) you would be looking at a standard rehab payment of 1% or $80-$100 per month. They can go lower but you will need to provide proof of income and expenses for anything lower than that. Keep in mind, they will have a copy of your credit report.

Once you default, you are no longer eligible for deferments or forebearances.

You can sometimes get a hardship deferrment, but it depends on how long you have been in default and your ability to agree upon a payment plan. At least that what some of my students have done.

Not in default you cant. No such thing. I spent almost a decade collecting on both FFELP and DOE loans and neither program has any hardship programs while in default that include not paying. You can negotiate a low payment based on income but no agency will agree to no payment.

So yeah, I understand I have to call them up. One thing though, I have to specifically ask for a rehab program when speaking with them? I just want to be sure on what to say, I don't want to screw it up for myself even further...

And $8,000 is about what it says in the letter they sent me so I'm assuming that's how much I owe... Thanks for your prompt replies this site is a great help and so are you Soaplady!

I just want to be clear...

Do I have to say I want to rehab the loan or somehow enter a rehab program for the loan? What exactly should I say? Or should I just see if I can get the payments down to a reasonable level without doing a rehab or do you think that's not possible???

Why would you not want to rehab?? You cant make payments to the CA forever...they will put the pressure on to get your loan out of default, and your only choices are paying it in full, rehab or consolidation. It is not doing your credit any good to stay in default as you do not get credit for making payments on a bad debt.

You have to specifically ask for rehab and reasonable and afford payments.

I'm sorry if I was unclear.

But I DO want to enter a rehab for my defaulted loan. That's what I was trying to figure out is HOW to properly ask since that's what you're telling me I have to do.

I don't want to be rude or preceived as being rude, I just want to ask them in the best manner possible that way I can get this whole mess taken care of...

Ask for the rehab program. Mind you the rehab is not based on reasonable and affordable payments. It is based on principle and interest. they take a financial statement from you because that proves to the gov and client that you can not pay the entire balance in full. if you got a letter stating that it is 8,000(based on who the client is that sent you the letter, chances are the default charge isn't added on yet), your monthly payments should not be that high. but that does also depend on your interest rate on your loan. nco wil prolly ask for a down payment as well. the reason being for that is it supposed to help bring down your balance and also cut down the time estimated on paying your loan back. i know it is the only program out there that helps your credit

my daughters loan is in default and she now owes $90000 she earns $8 an hour at the job her private school found for her - that does not pay enough for paying back loans - she has offered to make affordable payments but they just sent the loans to collections why don't they listen to and talk to these kids - she was promised all manner of good things when she got her degree and she worked hard to get it all she is asking is time to move up with her company to earn enough to pay them - these kids want to pay but you cant get $900 amonth from an $800 paycheck when to keep earning that paycheck she needs to pay for gas and living expenses also

The school made the promises....not the lender of the loans. It is like buying a car...you purchase the car with a loan from the bank. If something goes wrong or there is a recall, the bank could care less....you borrowed the money for the car of your choice. You would have to pursue the maker/dealership.

What did she go to school for that she is only earning $8 per hour? Why did she go to a private school when she could not afford it? Is this all private loans or a combo or private/federal loans?

why is that you always SOLELY blame the borrower? What in the hell is a school doing driving students into that much debt anyway? Where is the moral conscious in that?

From my experience in student loan collections and as a financial aid officer with a major midwestern university, it IS the student who is usually at fault!!!
A)they attend schools they cannot afford...
I saw too many students attending private liberal arts colleges and coming out with a degree in say, philosophy. They leave a 4 year program, 8k in debt with NO SKILLS! They could have gotten that same BA at a local state school and lived at home for a 1/3rd of the cost.
I saw other student blindly sign up for private schools...lets say a cullinary academy. They pay $10k. However at no time during the enrollment did they ask "who hires from your school" "can I talk to previous students?" "how much can I expect to earn?" People spend more time kicking the tires of used car and checking car faxes than investigating the school that is suppose to give them a life long career.

b)Students ignore the warning signs...letters, calls....they dont keep their lender apprised of their current addresses. It takes days to default.....there are numerous calls, letters....if they dont respond or if they dont tell the lender where they are or how to reach them....well, that is how a lot of defaults occur. I would say 50% of all defaults on the federal side occur from the "head in the sand" syndrome.

I blame parents too. Parents promise the world to their kids and when the bill comes in "oh, I dont have any savings, I dont qualify for a parent plus loan because I had a bankruptcy last year..." the list goes on and on. Students have little to no savings and are clueless as to what or how they are going to pay. I have a middle school and a freshman aged daughters....I am already anticipating what their educational costs are going to be and they know NOW that if they expect more than a state school or community college, they will have to have the grades to get scholarships. Even for a state school I am expecting them to earn scholarships! They are working hard NOW for their future....it wont happen if we wait.

We are not talking moral conscious....we are talking business. Private schools are expensive....if you have to borrow private funds to attend, you should NOT be attending.....there are always alternatives. The lenders are collecting for loans made to students for the school of THEIR CHOICE. No one is forcing them to borrow especially outside the federal loan system.