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NCO and Student Loans


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I just returned to the States after being oversees for eight years and this morning I received a call from NCO saying that I needed to repay them for my student loans.

It’s true that I defaulted (back when I was young and stupid(er)) and I want to repay them, but I found it odd that this company (who after a little research seems to have a not so positive reputation) would be collecting for the government.

They said I owe about 5000 in principal, 3000 in interest, and 2000 in penalties. I did call the number for the Department of Education and verified that I still owe the money and that NCO was representing them.

NCO said that they would cut me a deal, and that I’d only have to pay 8350 instead of the full amount.

Any advice or things to watch out for or should I just go ahead any pay NCO?



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If its already on your credit reports, its going to be there a long time paid or not, and it might be worth trying to get them down to close to principle only for a 1 time payment.

If you can keep it off your reports, jump at it right away though! Either way if you have that kind of money and plan to buy/own a home etc, they're going to get it eventually anyway.

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The 30 day notification period is supposed to be there for you to either dispute or pay before it ends up on the reports, so clarify it with them but you might just get lucky.... actually VERY lucky if there's nothing on the reports at all right now.

If you've got the $$$ it will save you untold amounts in the future.

Good luck!

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I found out about the possibility to rehabilitate the loan, so I chose that option. I sent a certified check for 3500 to the ED in Texas, and I will pay 200 a month.

I probably could have paid it off, but I was reading things on the internet about if you just pay it off, they wouldn't necessarily remove the default from your CR, but if you did the rehabilitation, they would after 9 months. I'm not sure whether or not this is the case, but I wanted to take the safe option.

NCO said if I still wanted to pay it off in full, I could do so.

Hopefully everything will go well.

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Hi Steve,

NCO and US Dept of Ed will probably let you rehabilitate the loan. I am pretty sure that is ALWAYS an option for defaulted borrowers.

Rehabbing will eliminate some of the negative credit history (US Dept. of Ed's)though not all. Also, I think they also eliminate some of the fees through that process. Rehabbing also permits you to borrow again should you choose to go back to school.

Contact the US Dept of Ed first for your rights. Some CA's will tell you they cannot rehab the loan but I believe you have the right to request this.

I also believe that no down payment is required!! I had an unreasonable CA insist on an unreasonable down payment so I "settled" and paid a lesser amount just to get them out of my hair. I later found out that NO down payment was required. TOO LATE for me but...

Try these links:

http://www.nslds.ed.gov/nslds_SA/ = National Student Loan Data System. For info about your student loans


For Rehab/repayment info.

Good Luck!


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