I received a federal student loan in 1988 for $2,400. I never paid it back and over the years have received the occasional letter from creditors. The amount of the loan is now about $5,000. I know that I qualify to make a lump sum payment. Is it possible to get them to accept an amount lower than the original $2,400? I know credit card companies and other lenders will do this but I have heard this might be different because it is a federal student loan. Also I know they can take my tax return but can they also take money from my checking or savings account if I open one? Thanks for any help or info.
Yes, Standardized Compromise and Write Off Procedures were approved in 1993 by the Director of the US Dept of Education. You would need to contact the collections supervisor at your guarantee agency. They will compromise on interest and collection costs. They will also compromise the interest you owe if you agree to pay the principal with a certified check within 30 days of reaching that compromise. The guarntee agencies don't advertise this, obviously. Only speak to a supervisor at the state guarantee agency.
Thanks for the information. I went to the Department of Education website and couldn't find anything referring to the Standardized Compromise and Write Procedures. Do you have a web address I can use? Thanks.
This is the exact situation that my friend described to me last night. His was for a trade school 20 years ago. They taken any tax refunds in the interim and freeze bank accounts. Therefore, he's worked under the table and doesn't have a bank. It's like being in credit *H* for 20 years. I told him I'd help. I can hardly wait to see who to contact!
