BEWARE...Direct Loan Dept. of Ed. consolidation

jgurl, I don't have any ideas on student loan issues. This is something I always found hard to understand. Fortunately, I never took student loan otherwise I would have surely messed everything.

Soaplady has very good advice on student loan issues. She will come soon and put a comment. You can discuss all your queries with her freely.

The ICR plan is the most flexible plan offered by any lender. There are a lot of times that people under the ICR plan cannot afford the assigned payment....Direct Loans will work with individuals in setting an affordable payment. To the OP....getting an attorney is a total waste of time and effort. Did you actually talk to the DL reps to explain your payment? If your payment was not affordable, did you ask for a lower payment?? They will look at your expenses and providing they are reasonable, they will lower your payment.

Right off the Direct Loan site.

[quote]Income Contingent Repayment
This plan gives you the flexibility to meet your Direct Loan obligations without causing undue financial hardship. Each year, your monthly payments will be calculated on the basis of your adjusted gross income (AGI, plus your spouse's income if you're married), family size, and the total amount of your Direct Loans. Under the ICR plan you will pay each month the lesser of:

the amount you would pay if you repaid your loan in 12 years multiplied by an income percentage factor that varies with your annual income, or
your monthly discretionary income* multiplied by 20%.
If your payments are not large enough to cover the interest that has accumulated on your loans, the unpaid amount will be capitalized once each year. However, capitalization will not exceed 10 percent of the original amount you owed when you entered repayment. Interest will continue to accumulate but will no longer be capitalized.

The maximum repayment period is 25 years. If you make payments under the standard or 12-year extended plan and then switch to the ICR plan, time under the former plan counts toward your 25-year repayment period. Time spent in other plans or in deferment or forbearance does not count toward the 25 years. If you haven't fully repaid your loans after 25 years under this plan, the unpaid portion will be discharged. You will, however, have to pay taxes on the amount that is discharged.[/quote]

http://www.ed.gov/offices/OSFAP/DirectLoan/RepayCalc/dlindex2.html

Yes I spoke directly with Direct Loans. And I was told that my payments would be based completly on gross income only.....not adjusted income. Even though the paper work they sent me has Income Contingent checked. I am 50 and my husband is 60 and we have no dependents living at home. Paying almost $500 dollars a month for 25 yrs. is really not much of an option for us. I will be in a nursing home if not dead and my husband probably will be dead by then. I owe the debt and I want to pay it..and pay it in full.....so I am going with an Attorney who is an advocate for fair student loan practices.....and try to get a payment plan that will allow us to make payments according to an adjusted income for living expenses.

I did not mean to sound snappy....I really do appreciate you responding. I just wanted to say thank you very much. But I do also believe that some things apparently are getting mishandled for some poeple. Because I have read the info you posted and once again spoke with DL....and they still say that my payment will be based on groos income and not adjusted. Also btw...my daughter who just recieved her PHD and will be hooded next month just consolidated with Sallie Mae. And they too based her payments soley on gross income with no consideration for any cost of living adjustments....and all of her loans were current. By the time she completes payment it will cost her $190,000. so I just don't know...but I think things are in serious shape!

Sallie Mae is a FFELP consolidator. They do not nor do they have any obligation to offer income contingent repayment. They do income sensitive but not income contingent. Only Direct Loans has this program.

I too was always leary of Sallie Mae but unfortunately Sallie Mae bought all of her loans and she consolidated with them because she wanted to get started in her career and do the right thing. I would never consider Sallie Mae for anything and I was lucky enough that they only took over 1 of my loans.

The only thing I am expressing here is to be very careful about believing everything you read on the web or, in a letter sent to you, or, by the person calling you on the phone.. Just because it is printed on a document or a website does not always make it so anymore. Unfortunately with the new supreme court rulings and President Bush's wonderful endorsement and support for Sandra Day O'Oconner a lot of things are changing and much of the thousands of printed paper promises and rules have not have time to catch up.

This is how I figure it...you can send $100 a month for 25 yrs. and then be forgiven for the remaining amount. Or, you can seek legal advice and consultation and possibly actually pay off your original debt.

Quote:

We are also taxpayers...until I became sick I have worked since I was 14 yrs. old. I also raised 2 daughters....a Professor and an RN...so it's not like I exactly wasted my time!! And I am stating that I do want to pay back my debt. All I am saying is that instead of signing on the dotted line listening to financial advisors of colleges that want the money or others who make thier living dispesing these loans.....I will seek a little protection from a party who is not making their living dispesing these loans.

I realize that it really bothers you that I prefer to seek legal advice. But, there's always 2 sides to everything and you seem to think that the Gov. is 100% full proof. Well...I don't trust them so much anymore...a lot of things have changed since 1994!

And I think it's only fair that that some poeple also understand that to seek legal advice is not stupid or a waste of time. I wish I had of done it 7 yrs. ago...I could have saved about $35,000.

I also am not trying to get out of paying my debt....I simply wish to have a fair and reasonable payment arrangement! You are the one advising popeple to pay $100 a month for 25 yrs. and then the rest will be forgiven. Guess what...that's my tax money paying for that!!! So don't insiuate that I am trying to cheat the tax payer......I am just trying to resist what has and is quickly becoming a system that simply makes it impossible for poeple to pay off their original loans!!!!

Moondanzer, sorry you think that SOAPLADY's posts are erroneous or whatever, but the advice she gives is solid (and current).

What you need to understand is that just because a payment is reasonable to you, does not mean you will be able to convince a CA that it is reasonable.

Last comment, about the government...federal student loans are not the animal they used to be. You can no longer discharge them under bankruptcy (except by jumping a huge hurdle), your income tax refunds can be intercepted to pay them, and if you recieve social security, it can be garnished for it.

If you pay for an attorney, and he/she isn't able to help you, will you get a refund to apply to your SL's?

Well, whatever. Good luck.

Quote:

Well let me begin by offering you an apology for being so nasty in my last couple of posts. I have read and seen where you have certainly helped many poeple.

And I too also agree with you about the new want it now generation. But I would like for you to know that I am not a part of that generation.

When I applied for my loans which were originally under$17000 I was not ill and was very excited about finally getting to go to school. And also at that time I could have afforded to pay back. Unfortunately, I became very ill with a chronic and extremely severe mental illness. I suffer extremely from anxiety associated with extreme panic disorder/agorophobia. The very symptons of this illness have contributed in me getting myself into this mess. Because sometimes it is impossible for me to even answer the telephone even if family is calling. I know this condition is very hard to understand if you don't have it.....shoot I do have it and it still boggles my mind how stupid it seems. However, it is a physical condition and disorder in the brain and I will live with it the rest of my life.

Also during this exact same time my husband took a terrible fall from the back of a trailor....tearing his rotator cuff and crushing his wrist. He was out of work for almost 6 mos. At that time we lost everything....a lovely home in Maine, all of our savings....simply everything. We have worked very hard during these last few years to get almost completely out of debt. And until our 15 yr old Honda died and we were forced to get another vehicle...we drove that old car. We now have a pick-up that is over 5 yrs. old and bought a 30 yr. old mobile home because that was what we could afford...and we have managed to pay it off just this year.

I also have 2 daughters....my oldest is 36 and born when I was 14....she is the product of my being molested. I then was forced to marry this pediphile because my parents nor the state would help me be able to keep my child. This was back in 1971 and at that time you were forced to quit school if pregnant. I applied many times for help from the state and was denied. I was trying to get away from this man. He was 31 yrs. older and had molested many other young poeple and contiually beat and tortured me. At 16 I had another child by this man and still no-one would help me. Both of my parents were alcoholics and my early childhood was also extremely abusive and violent. However, at 18 I was finally of legal age and did get myself and my children out of this situation. He continued to stalk and abuse me until I married my current husband when I was 25.

Now, I managed to get both of these girls raised safely and each have gone on to have very successful lives. My oldest holds a Doctorate in english literature, and, in fact is 1 of 35 in the world who has been invited to attend the round table conference at Oxford in England this year. My youngest has 3 lovely boys and is an RN that is continuing to work toward her Bachelor's degree.

So please believe that I sacrificed much also in my life and have overcome much. I have never owned a brand new car in my entire life. And we have exactly 3 credit cards and their outstanding debt is under $1500. Except for my student loan problems we have managed to recoup quite successfully.

My grandsons have college funds with a very significant amount of money already there. And, we all contribute so that they will be able to obtain a higher education without debt.

So you see when I signed my debt papers I was doing so with the understanding of a 7th grade education and a GED. I never experienced having a high school counselor or for that matter any financial advisor. And I do except my responsibility in getting myself into this problem....and I wish that I could have been fortunate to have had a financial counselor such as yourself...but, I didn't.

Now I am not seeking an attorney's advice to file bankruptcy....I wouldn't do that even if it would wipe out my debt. I simply want to seek some advice from someone who will read the fine print and explain it to me. I have been told so many different things from each person I have spoken with concerning consolidation that I simply don't trust signing a blank ended promissary note.

I have been helped already very much just since joining this site yesterday and I really do hope that we can have a good relationship. I thank you for taking the time to read a little about myself and I also hope it will better help you understand my position.

I hope you were able to understand all of this....my condition makes it very hard for me to organize things well....so I know that it is very scattered.

I truly hope that we can be friends!

OoooPpppppSssss forgot to login before I posted....the above post is from me.

You don't have to apologize for anything. Period. You are entitled to your opinion and your feelings. Those are never wrong, because they are yours. Just so you know, I completely understand your illness and the devastation it causes families and friends. You are dealing with a chronic life long debilitating illness. Unfortunately, it is misunderstood and stigmitizes those who are afflicted with it. Please, do not ever apologize for your opinions or emotions, you are entitled to them. You have had some very tragic and devastating events that ocurred in your life, and the fact you survived to this point and even made it through a college education is a triumph and you should be congratulated.

Oh my goodness thank you so very much for that. I really needed to know that it is still okay for me to stay a member here.

I may only have moral support to offer sometime, but, I also think that after I complete this process....I might have some info that could help others that are in default and possibly can't afford to get legal advice.

Thank you....thank you!!!

Just because somebody has a different opinion, doesn't make them right, or wrong. Everybody is entitled. Regardless of somebody's opinion on a forum, that is what it is, an opinion. I think, given your circumstances, and life events, disability, you are very wise to consult an attorney. And do not be discouraged by comments telling you that you are wasting your time. It is your time, your situation, you decision. And if it gives you a sense of empowerment and assistance, then you are not wasting your time.

Moon, I read your posts and felt very angry on your husband for giving you so much pain. I had tears for a while..

Please don't ever think about leaving from here. We all will be glad to have you with us. Sometimes, there are jerks who often come up with nasty comments, just to hurt others. Don't let that crap get over you. You will find all colors on the board.

I didnt say it was wrong to consult an attorney...it just will not result in any changes. The op is already bound by prom notes with similar terms. Actually the notes she has now would result in higher repayment terms vs what the Direct Loans would be offering. All an attorney can do is interpret the existing contract and the potential new contract. All the questions on consolidation can be answered on the Direct Loan site. Also, Direct Loans has some excellent customer service reps...sometimes you just have to ask for a supervisor.


Moondanzer...my heart goes out to you. You have been thru the ringer and back again.

Moondanzer,
We are all entitled to our opinions and if we would get kicked ou on disagreements,I would be buried about twelve feet under by now. :lol: Welcome to our community.I cannot offer much help on student loans,but if you need help holler.

Thank you all for the welcomes and the kind remarks! Well at the very least this has kept this board busy....I see we all got listed as 1 of the most popular!

I do sincerely appreciate that you all were touched and understood my story.....but, I truly believe that everything in life happens for a reason. And, I learned a lot from my early life experience....the most important being aware that somehow I would break the cycle of abuse that had been passed down through my family! And I did....my children and grandchildren have wonderful lives and if that is the only legacy I ever leave in this world....then I would have gladly gone through even more than I did.

Now I am off to have some dinner and hopefully later I can figure out how to do something with my homepage here.

Later guys! :wink: