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My daughter is way behind on her student loans. The loan has been turned over to a collection agency who is demanding way more than she can pay and threatening to garnish her wages. Can these people be negotiated with to allow a reasonable payment and to stop or forgive interest accumulated on this loan?

You should go through - Student Loan - Consolidation is good to pay it off because I think it is the best solution for you.

Sub: #1 posted on Wed, 07/09/2008 - 04:57

phoenix phoenix
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The problem is that your daughter is in default on her loans, not just way behind. In the promisorry note she signed, she agreed to pay the loan of in full on demand if she defaulted on the loan. In hindsight, she should have asked her original lender for a deferment or forebearance on her loan to prevent default, or asked for a lower payment plan.

The interest will not stop nor it will it be waived. Her wages can be garnished without taking her to court and her taxes will be offset.

What to do. IMHO the link given by the poster above is gives no solutions for someone in default. You cannot go thru a debt management program for student loans in default. She has two options...

Rebab....she can rehab her loan and get it out of default. This process requires she makes 9 on time monthly payments. Under the Higher Education Act, she is entitled to "reasonable and affordable payments"....those are the keywords. She has to ask for rehab and specifically ask for the reasonable and affordable payments. Upon completing the program, the negative remarks from the loan guarantor are deleted or changed to positive. If this was a defaulted Direct Loan, the collection costs will be waived.

Consolidation...the other option. I recommend the Direct Loan consolidation loan thru the DOE. This loan will do nothing for her credit report and all collection costs are capitalized into the loan. She will automatically be assinged to the ICR plan....Income Contingent Repayment plan, she her payments will be calculated as a percentage of her income.

A lot of people will rehab first for the credit benefits and then consolidate for the lower payments.

Sub: #2 posted on Wed, 07/09/2008 - 05:26

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I think before taking any loan one should fully understand the terms and conditions of non-payment as well as other far-reaching consequences that follow.


Sub: #3 posted on Wed, 08/06/2008 - 02:47

ritish.sachdeva ritish.sachdeva

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Student loan prom notes are very clear as to terms and conditions of non payment. Right above the signature line is a statement... This is a promisorry note. I will not sign this not unless I have read and understand the terms of this note. Yet most students dont bother to read.

Sub: #4 posted on Wed, 08/06/2008 - 06:13

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my was recurited to a out state college stay there for two full semster, he left to come back home to attened college for two full semster, the out state college sent he a bill for the amount ranging in the thousands and was sent to collection now the bill is etra thousands dollar more for collection coast I sent a letter back in November of 2007 for the school to validate my debit I still have not heard nothing as of yet. I can not received my transript be cause of this debit what can I do to colse this matter out and received my trascript.

Sub: #5 posted on Wed, 08/06/2008 - 20:07


You say he were recruited? Was there a financial arrangement that went along with this recruitment that was not fufilled??? Say for instance you receive an offer of a full ride scholarship to play a sport and then leave....they have every right to charge you the full tuition as the contractual obligation was not met.

The school is not required to validate the debt...they are not a CA. You could ask for a copy of the student account...that would indicate what you are being charged for, although the collection fees to the CA are probably not listed, although they still need to be paid.

The only way to get the transcript is to pay the account off in full.

Sub: #6 posted on Thu, 08/07/2008 - 11:10

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