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What to do about CA & old student loans?


momoney4me
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My DH owes on 3 defaulted student loans, totalling over $8,000. These are now about 8 years old, and have dropped off his credit reports. However, we just got several letters from a CA regarding these loans. We would like to set up a payment plan with the Dept. of Ed, but we did that a few years ago and then stopped paying when my husband lost his job. I'm not sure if they would do it again. Can someone give me some info as to what the best approach would be on this? Should I send DV to the CA? Should he contact the Dept of Ed? He just started a new job and we don't want garnishment.

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In California they can not garnish the first year on the job. To contact or not? Since SL's will never really go away I would err on the side of trying to work something out.

Still, I have seen first hand the action/inaction both blowing up in someones face. Here is a good response recently posted on this board concerning SL's:

AUTHORicantstandcras

Member of the Club

Joined: 21 Jun 2003

Posts: 14

Posted: Fri Aug 08, 2003 11:51 am Post subject:

YES! Student loans *held* by the government are some of the easiest problems to fix.

Get on the web and find a phone number for an actual person in the department of education - NOT the 800 number. Call someone in an office somewhere that handles "student financial aid" - the ED website has a staff directory. It's very easy to find.

Get someone on the phone and be as nice as possible and explain that you want to start repaying your loan. Kiss as much a$$ as you can. They will sound skeptical and act nasty at first, but KEEP KISSING a$$ AND ACT AS NICELY AS YOU CAN. Eventually, if you sound sincere enough, the person on the other end will offer to help. Tell them that you want to repay your loans to the Fed government and that you want to avoid the collection agency. BE NICE AND BEG AND BE EVEN NICER.

The person on the other end can fix your problem almost immediately. They can even "recall" the loan from the collection agency and waive all of the bogus "collection fees" that were charged against the account. All you have to do in return is agree to make a regular payment every month that is at least 1% of the loan principal + accrued interest. Once you get the person on the phone to agree to this, then ask him/her to send you a fax that summarized your conversation. BE NICE AND KEEP KISSING a$$ UNTIL YOU GET THE FAX.

Once you get the fax stating that the government has agreed to accept your payments, THEN you can tell the collection agency to F*** off, but be careful until you know that you are in tight with the Feds. Otherwise, you might get sued if you piss off the wrong CA.

Once you make 12 monthly payments in a row, call the person back and ask that your loan be "rehabilitated". They will then start treating it like a normal student loan account and will be much more helpful in fixing your credit report. You will also be eligible for consolidation and refinancing.

Drawbacks

- The ED person you will talk to is an EDUCATOR and not a BANKER. They will not discuss amortization tables or terms or anything but a regular 1% payment, mainly because they likely won't even understand what you are talking about. Don't try and negotiate these things because they will just ignore you. It's not really important anyway, because all the government cares about is that you are paying, not that it recovers the balance. Your $50k loan is less than a drop in the bucket of the federal budget.

- Accordingly, if the most important part is the payment, DO NOT MISS A PAYMENT OR BE LATE. They will slam the door on you and unleash the collection agencies all over again and likely will not help you a second time. APPEARANCES ARE EVERYTHING!

Hope this helps.

If you have a defaulted fedeal loan that is actually held by a private guaranty company or bank (but not a collection agency), then you are in much much worse trouble. Imagine a credit card company with no Statute of Limitations and unlimited ways to harass you - just about the only thing that works with those guys, is large cash payments. They won't negotiate and they won't hesitate to let the collection agencies run wild. You can't wait them out and they know it.

How do I know? I was going through my credit report six months ago and saw a company that I didn't recognize with a VERY derogatory entry on my credit report. So I sent a letter for verification. Bad idea. In return I got copy of a promissory note I signed 11 YEARS AGO during my FRESHMAN YEAR OF COLLEGE! I didn't even remember I had signed their silly little note.

I understand that it was my responsibility to keep them notified of my whereabouts, and I would have, if I had known about the damn loan. Instead I was an 18 year old kid and I'm paying for it 11 years later.

Apparently they had lost track of me after graduation and, instead of being grateful that I had contacted them and wanted to work something out, they took my goodwill as an opportunity to come after me. Nice guys. I did some research and really I have no choice but to do what they say - "pay us in full - or pay our collection agency huge fees and interest rates - or we will sue. Also, Congress gave us unlimited powers to harass you."

They are bankers with special powers and they know it and act like it.

Conclusion - when I have kids, they will never EVER borrow money to go to college. Financial aid is a sham and just another form of indentured servitude.

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In California they can not garnish the first year on the job. To contact or not? Since SL's will never really go away I would err on the side of trying to work something out.

Still, I have seen first hand the action/inaction both blowing up in someones face. Here is a good response recently posted on this board concerning SL's:

AUTHORicantstandcras

Member of the Club

Joined: 21 Jun 2003

Posts: 14

Posted: Fri Aug 08, 2003 11:51 am Post subject:

YES! Student loans *held* by the government are some of the easiest problems to fix.

Get on the web and find a phone number for an actual person in the department of education - NOT the 800 number. Call someone in an office somewhere that handles "student financial aid" - the ED website has a staff directory. It's very easy to find.

Get someone on the phone and be as nice as possible and explain that you want to start repaying your loan. Kiss as much a$$ as you can. They will sound skeptical and act nasty at first, but KEEP KISSING a$$ AND ACT AS NICELY AS YOU CAN. Eventually, if you sound sincere enough, the person on the other end will offer to help. Tell them that you want to repay your loans to the Fed government and that you want to avoid the collection agency. BE NICE AND BEG AND BE EVEN NICER.

The person on the other end can fix your problem almost immediately. They can even "recall" the loan from the collection agency and waive all of the bogus "collection fees" that were charged against the account. All you have to do in return is agree to make a regular payment every month that is at least 1% of the loan principal + accrued interest. Once you get the person on the phone to agree to this, then ask him/her to send you a fax that summarized your conversation. BE NICE AND KEEP KISSING a$$ UNTIL YOU GET THE FAX.

Once you get the fax stating that the government has agreed to accept your payments, THEN you can tell the collection agency to F*** off, but be careful until you know that you are in tight with the Feds. Otherwise, you might get sued if you piss off the wrong CA.

Once you make 12 monthly payments in a row, call the person back and ask that your loan be "rehabilitated". They will then start treating it like a normal student loan account and will be much more helpful in fixing your credit report. You will also be eligible for consolidation and refinancing.

Drawbacks

- The ED person you will talk to is an EDUCATOR and not a BANKER. They will not discuss amortization tables or terms or anything but a regular 1% payment, mainly because they likely won't even understand what you are talking about. Don't try and negotiate these things because they will just ignore you. It's not really important anyway, because all the government cares about is that you are paying, not that it recovers the balance. Your $50k loan is less than a drop in the bucket of the federal budget.

- Accordingly, if the most important part is the payment, DO NOT MISS A PAYMENT OR BE LATE. They will slam the door on you and unleash the collection agencies all over again and likely will not help you a second time. APPEARANCES ARE EVERYTHING!

Hope this helps.

If you have a defaulted fedeal loan that is actually held by a private guaranty company or bank (but not a collection agency), then you are in much much worse trouble. Imagine a credit card company with no Statute of Limitations and unlimited ways to harass you - just about the only thing that works with those guys, is large cash payments. They won't negotiate and they won't hesitate to let the collection agencies run wild. You can't wait them out and they know it.

How do I know? I was going through my credit report six months ago and saw a company that I didn't recognize with a VERY derogatory entry on my credit report. So I sent a letter for verification. Bad idea. In return I got copy of a promissory note I signed 11 YEARS AGO during my FRESHMAN YEAR OF COLLEGE! I didn't even remember I had signed their silly little note.

I understand that it was my responsibility to keep them notified of my whereabouts, and I would have, if I had known about the damn loan. Instead I was an 18 year old kid and I'm paying for it 11 years later.

Apparently they had lost track of me after graduation and, instead of being grateful that I had contacted them and wanted to work something out, they took my goodwill as an opportunity to come after me. Nice guys. I did some research and really I have no choice but to do what they say - "pay us in full - or pay our collection agency huge fees and interest rates - or we will sue. Also, Congress gave us unlimited powers to harass you."

They are bankers with special powers and they know it and act like it.

Conclusion - when I have kids, they will never EVER borrow money to go to college. Financial aid is a sham and just another form of indentured servitude.

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In California they can not garnish the first year on the job. To contact or not? Since SL's will never really go away I would err on the side of trying to work something out.

Still, I have seen first hand the action/inaction both blowing up in someones face. Here is a good response recently posted on this board concerning SL's:AUTHOR

icantstandcras

Posted: Fri Aug 08, 2003 11:51 am Post subject:

YES! Student loans *held* by the government are some of the easiest problems to fix.

Get on the web and find a phone number for an actual person in the department of education - NOT the 800 number. Call someone in an office somewhere that handles "student financial aid" - the ED website has a staff directory. It's very easy to find.

Get someone on the phone and be as nice as possible and explain that you want to start repaying your loan. Kiss as much a$$ as you can. They will sound skeptical and act nasty at first, but KEEP KISSING a$$ AND ACT AS NICELY AS YOU CAN. Eventually, if you sound sincere enough, the person on the other end will offer to help. Tell them that you want to repay your loans to the Fed government and that you want to avoid the collection agency. BE NICE AND BEG AND BE EVEN NICER.

The person on the other end can fix your problem almost immediately. They can even "recall" the loan from the collection agency and waive all of the bogus "collection fees" that were charged against the account. All you have to do in return is agree to make a regular payment every month that is at least 1% of the loan principal + accrued interest. Once you get the person on the phone to agree to this, then ask him/her to send you a fax that summarized your conversation. BE NICE AND KEEP KISSING a$$ UNTIL YOU GET THE FAX.

Once you get the fax stating that the government has agreed to accept your payments, THEN you can tell the collection agency to F*** off, but be careful until you know that you are in tight with the Feds. Otherwise, you might get sued if you piss off the wrong CA.

Once you make 12 monthly payments in a row, call the person back and ask that your loan be "rehabilitated". They will then start treating it like a normal student loan account and will be much more helpful in fixing your credit report. You will also be eligible for consolidation and refinancing.

Drawbacks

- The ED person you will talk to is an EDUCATOR and not a BANKER. They will not discuss amortization tables or terms or anything but a regular 1% payment, mainly because they likely won't even understand what you are talking about. Don't try and negotiate these things because they will just ignore you. It's not really important anyway, because all the government cares about is that you are paying, not that it recovers the balance. Your $50k loan is less than a drop in the bucket of the federal budget.

- Accordingly, if the most important part is the payment, DO NOT MISS A PAYMENT OR BE LATE. They will slam the door on you and unleash the collection agencies all over again and likely will not help you a second time. APPEARANCES ARE EVERYTHING!

Hope this helps.

If you have a defaulted fedeal loan that is actually held by a private guaranty company or bank (but not a collection agency), then you are in much much worse trouble. Imagine a credit card company with no Statute of Limitations and unlimited ways to harass you - just about the only thing that works with those guys, is large cash payments. They won't negotiate and they won't hesitate to let the collection agencies run wild. You can't wait them out and they know it.

How do I know? I was going through my credit report six months ago and saw a company that I didn't recognize with a VERY derogatory entry on my credit report. So I sent a letter for verification. Bad idea. In return I got copy of a promissory note I signed 11 YEARS AGO during my FRESHMAN YEAR OF COLLEGE! I didn't even remember I had signed their silly little note.

I understand that it was my responsibility to keep them notified of my whereabouts, and I would have, if I had known about the damn loan. Instead I was an 18 year old kid and I'm paying for it 11 years later.

Apparently they had lost track of me after graduation and, instead of being grateful that I had contacted them and wanted to work something out, they took my goodwill as an opportunity to come after me. Nice guys. I did some research and really I have no choice but to do what they say - "pay us in full - or pay our collection agency huge fees and interest rates - or we will sue. Also, Congress gave us unlimited powers to harass you."

They are bankers with special powers and they know it and act like it.

Conclusion - when I have kids, they will never EVER borrow money to go to college. Financial aid is a sham and just another form of indentured servitude.

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