Phone Calls from DCS About Defaulted Private Loan

Greetings, all,

I've been reading this forum skimming for similar threads, but I couldn't find anything that directly applied, and hoped to receive some advice from the resident experts.

I took out a CitiAssist student loan from Citibank back in 2006 for the amount of $6,000. My grandmother co-signed for me, but she passed away in April of 2010. After interest was applied, the total amount came to around $7,300. I initially made payments after graduation for a total amount of $750, but quickly fell on hard times and stopped making payments on my CitiAssist loan and my Federal Loan (which is now around $22,000 but not defaulted).

Over the years I used up my deferment time on both loans, and out of my own stupidity, just stopped contacting CitiBank. I finally found a full time position last year, and once I got back on my feet I decided to earnestly start repaying my loans. My federal direct student loans went smoothly and after an extended period of deference, I just started repaying it this month. However, when I tried calling CitiBank last year, they told me that my loan had just defaulted and that I would be hearing from a collections agency soon, and that they couldn't help me. The guy I spoke with then said he didn't know which agency the loan was with at that time. This was last October.

Fast forward to this morning, when I got a phone call from a lady at DCS who asked my name and requested that I confirm my identity by telling her my address and social security number. I didn't know who she was, so I asked her to tell me the information she had, and she correctly read out my current address and the last 4-digits of my social security number (is it okay for these agencies to just give out people's information like this?). Anyway, after I confirmed that she was correct, she then announced herself as a student loan collector who is working on behalf of The Student Loan Corporation (Citibank) in order to collect my outstanding balance of $7300, said she would use any information in order to collect the debt, and requested that I get a pen and some paper to write down what she was about to tell me.

I was actually at work at the time, and had a meeting I needed to attend in the next ten minutes, so I asked her if I could call her back later in the evening. She said she would not be in the office later today, but that I could call her tomorrow (Saturday) morning. I said okay, and hung up.

So that's my background. What I want to ask of you great people is some advice on how I should approach this situation. I've been reading a lot about similar situation for the last few hours, and there seems to be a lot of conflicting information. I fully intend to repay the lone, and would be happy to start soon, but I don't want to forced into some ridiculous down payment, or be threatened by wage garnishment if I don't have to.

I've read that this "first contact" phone call is one of the most important ones, so I want to make sure I have everything down before talking with the CA tomorrow. I've read about "loan rehabilitation", but I also read that it might only be an option for federal loans. Can anyone provide some light on this and how it works with private loans? It sounds like the best option for me, who simply cannot pay back the entire amount at once. If it's something I can take advantage of, is it something that the CA is obligated to honor?

I'll probably have more questions later, but in the interest of someone actually reading this wall of text, I should probably end here. I would greatly appreciate any help! Thanks in advance.