Like many here, I've been struggling with my loans for a while. I owe about $65000 in 7 different loans. There are two FFEL consolidated, one Perkins, and four stafford loans. All are in default.
My student loans went into default between 2007 and 2010. In 2011 I was suffering wage garnishment at my employer, which put me in such a financial bind that I ended up taking out payday loans to make ends meet. I was only making $1100/month and they were taking $200+ each month.
At the time, I inquired about rehabilitation. I knew there were income sensitive plans, but I was told that consolidation was not available to me into one of those plans without completing rehabilitation first. I provided my income & expenses as requested and was given a quote of $900/month for rehabilitation. Like many here, I literally laughed out loud when this quote was offered. I asked repeatedly if anything lower could be negotiated, and the person on the other end laughed and said "Sir, you owe $60000, there's no way we can go lower than that"...
So that was that.
I lost my job in 2011. I was on unemployment insurance until July 2012, when I made an ill-advised attempt to start a job (any job) that I wasn't confident I'd be successful at. I was not successful there, and was let go after 2 months.
I convinced my university to release my transcripts, and was able therefore at that time to enroll in a professional certification course. With that professional certification, I've now landed a job paying around $45k/year.
Now, before I get my first paycheck I'm trying to figure out how to deal with my student loans.
Since my pay is much higher than before, are they going to try to ask for some ridiculous amount like $2000/month? I could probably handle the $900 that was offerred before, but obviously that offer no longer stands as it was 2 years ago.
Plus, how long do I have before garnishments would start again? Should I proactively call them right away and arrange payments after my first paycheck, or would I have a month or two leeway?
Also, I keep reading that you CAN consolidate defaulted loans now (since 2010?) and that it can get you to a lower payment right away. If I do that, the default would remain, but I could at least begin rebuilding my credit for the next seven years... Because I'm not sure if I could afford 9 months of payments if they want more than $900/month, even at my new income level.
I'm a pretty smart guy, but this has me all confused. What kind of advice do y'all have?
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