I ran across this forum last week and as if on cue, my student loan hell has come to an apparent head. I have been trying to contact TERI for the last month to discuss my huge student loans that defaulted over a year ago. This is an enormous debt of nearly 100k. Today, a collections agent from a law firm calls and tells me they are going to sue. I asked if rehabilitation is possible and she said no. Eventually, she explained that TERI would rehab the loan over a 3 month span for a minimum payment of nearly 1000 per month, after which the loan would be sent to another servicer. The woman claims that once the loan goes back to the servicer that there will be no more ability to defer or forbear and that a 15 year repayment plan is the ONLY option available which would mean that my payments would still be prohibitive. I asked if the new servicer would have other options available and the woman went back and forth between saying "absolutely not", and admitting that she really did't know. I then asked for the rehab offer in writing and she refused, saying that it would take too much of their attorney's time. I insisted and they are supposedly sending the letter over. I have no idea what to do. I am not sure if I can make those payments. I know I definitely could not make them over an extended period of time, even if I was able to do it to satisfy the initial rehab requirements. There doesn't't seem to be any more flexibility. I don't want to bite off more than I can chew but I honestly don't know what to do as I have no assets. How can I negotiate? I want to resolve this in good faith but almost feel like throwing my hands up. Any advice at all would be appreciated. I'm shaking over here.
Is TERI a collection agency? Have a look at this website and consider giving them a call. FSA Ombudsman
If this is a Stafford or Perkins loan, the collection agency is lying to you. The Higher Education Act guarantees you the opportunity to rehabilitate your loans if you choose. She is trying to get you to consolidate your student loans, not rehabilitate them. There is a world of difference between the two. And you do have a choice. The CAs try to force people to consolidate because they want to clear their records faster and prove to the servicer that they are "unloading" the servicer's debt in a quick fashion. They do not like to do rehabilitations, as rehabilitations take over 12 months before they clear. http://www.carreonandassociates.com/aboutsl.htm http://www.carreonandassociates.com/sl.htm http://www.carreonandassociates.com/stuloanrehabact.htm http://loanconsolidation.ed.gov/ (click on FAQs in the top right hand button under "should I rehabilitate or consolidate my defaulted student loans" to see the difference between rehabilitation and consolidation.) She is lying to you. The truth is that once the loans are reinstated after rehabilitation, the loans are "sold" to a new servicer. At that point your slate is WIPED CLEAN. You can get on any payment plan you wish, you can defer and forbear. What you cannot do is default AGAIN and then rehabilitate again. I consolidated my post rehabilitation reinstated loans into forbearance immediately (they were in forbearance for 2 years) and I am currently on the "income contingent" repayment plan. She should be required to send you a rehabilitation "good faith" agreement. That you will in good faith make 12 on time monthly payments and that they in good faith will reinstate the loans out of default after that time. If she refuses to allow you to rehabilitate, you shoudl immediatey get a specialist from the USDOE Ombudsman's Office. http://www.ombudsman.ed.gov/ombudsman/index.html Do not be intimidated by these people. I say that, because I know exactly how you feel. 1. In negotiating a rehabilitation (which is your RIGHT), you can apply for a hardship consideration and reduce the amount of monthly rehabilitation payments that you need to make in order to rehabilitate. You will need to fill out an income and expenses documentation and give that back to the CA. Once you agree on a payment amount, get a good faith rehabilitation agreement SPECIFYING the monthly amount signed by both you and the CA. This is your proof to the CA and servicer and USDOE that you paid an agreed upon amount thinking that you would have the loans rehabilitated. Here is a recommendation: Call the person handling your account at the SERVICER, not the CA, tell them that you are ready to rehabilitate the loan but that you have a financial hardship and cannot pay what the CA wants. But you can pay _____. Let the servicer know that you're trying to resolve this issue so that they can eventually sell this loan to a new servicer. Make the servicer your friend. Ask them to work with the CA to get the CA to agree to ____ amount. Also tell the Ombudsman's specialist that you need to pay ___ amount due to hardship and that you are PROACTIVELY working with the servicer to get the CA to agree to accept ___ amount. Do not give them the satisfaction of seeing you shake. You will be fine. Get you a decent Ombudsman specialist and get in good with your account manager at the servicer. Then force the CA to play by the rules of the Higher Education Act.
Thank you so much for this information. But I have a question. These are private student loans. I already have significant federal student loans which are in good standing. Do these same rules apply? I am so confused. I will dig through these sites you listed. Thank you so much for the time and effort. You people are so unbelievably patient with newcomers!
If they are private loans, you are not entitled to the same rights. they only apply to loans guaranteed by the federal government. By the way, what degree did you get? What school did you attend?
You're going to need to call the Ombudsman's office and read a copy of your private promissory notes re default of private student loans.
I called the Ombudsman and they told me that they can't do anything with private student loans although she did give me some general advice.
Well, I have tracked the course of my loans from the original lender to the current guarantor and have decided to write them directly. I am informing them that I will not deal with any CA's and that I seek to resolve the situation and rehabilitate the loans. The original servicer told me that this guarantor (T.E.R.I.) has such a program but I cannot get them to return my calls, apparently having referred me ot the collections law firm. This sucks.
I hope you didn't take my question so personally. I was just curious... Usually if you have to take that amount of loans for school you probably went to law school, medical school, dentistry, or went to a ivy league school. Nothing to be ashamed about...
I'm sorry, I had just gotten off the phone with them and was super paranoid. But you're right, it was one of those. (I guess I'm still paranoid) Anyway, I tried talking to the OC and they wouldn't deal with me, although after a long conversation and some persistence, I was able to read between the lines and see that there is room for negotiation. I am going to offer them a smaller monthly amount over a longer period of time for rehabilitation and see what happens.
Well, I have received an offer of rehabilitation which would require me to make 3 payments of over 1000 per month. Once completed, the loan will be transferred to a new loan servicer and I can take it up with them. However, I just can't pay that much. I offered them the same amount but over a longer period of months and they flat out told me no. "Get another job!" etc... They now say that they will just go ahead and sue me. I am not even sure if they will propose my offer to the guarantor. I am putting it in writing I guess along with a check for the monthly amount I can afford. I don't know what else to do. If they're going to sue me, there isn't much I can do. I just don't have it. But I desperately want to straighten this out. So depressed but thanks for listening.
Re: Re: Student Loan Hell HELP! 1. Keep your head up. 2. Whatever offer you get from them, get it in writing that they will remove all negative trades after the 3 month (?) rehabilitation. Make sure that they aren't calling this a rehabilitation when it really is a consolidation. 3. Write your offer to the guarantor and ask them to convince the CA to accept it.
Re: Re: Student Loan Hell HELP! If these are private student loans, are they eligible to be included in bankruptcy? I'm not a fan of bankruptcy, but if you have no rights and will have to "live in a cardboard box by the river" to survive, maybe it's an option.
Re: Re: Student Loan Hell HELP! That is a question I would absolutely love to know the answer to. It's not that I want to evade my debts but a judgment this large would crush me. I think I'm going to consult with a lawyer. It's such a shame. It's all so stupid. If I could just rehab them, I'm sure I could get out from under in a few years. I'm kicking myself for being so stupid about things in the past.
Re: Re: Re: Student Loan Hell HELP! I know this is hard to do, but try not to be emotional. Consider this BUSINESS. Yeah, talk to a BK lawyer. Good luck and let us know what happens.
Re: Re: Re: Student Loan Hell HELP! You're right. Sorry to sound like I'm wallowing but I kind of am. Even though I tell myself its business, I get on the phone and the guy gets me furious then upset and I get off the phone shaking. I will let you all know. Hopefully they will accept my offer. On another note, you have to have some sort of mental makeup to be a collection agent. I mean, business is business but I don't know I could intentionally intimidate people and so forth.
Re: Re: Re: Re: Student Loan Hell HELP! Don't let things get to you. If you need to use the Bankruptcy courts to get the M*F*ers off your back then remember how they are making you so nervous that you shake. Also, it is YOUR RIGHT to use the BK Courts and after reading the many posters here, you will find that there is indeed life after BK and it is not as terrible as some would make it out to be.
