My wages are being garnished by Allied Interstate for a defaulted federal student loan. They called me and offered a rehabilitation arrangement that will essentially halve the amount I pay each month. This seems strange to me. Why do they want LESS money each month?
The Borrower Acknowledgement Form that I am to sign and return states that "I understand and agree the lender may capitalize collection cost of 18.5% of the outstanding principal and accrued interest upon rehab..."
I guess my question is this: Would I pay less money if I just let the garnishment continue as is?
I realize it is beneficial to my credit to rehabilitate but let us put that aside for now. Do they prefer that I agree to a rehabilitation arrangement because they profit MORE? I'm quite certain this company does not care about me so why do they want 50% of what they are getting already?
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