Student Loan Rehab/CA Questions

Discussion in 'Credit Talk' started by jhrf599, Aug 21, 2013.

  1. jhrf599

    jhrf599 New Member

    I recently defaulted on my Federal Student Loans, and I was contacted a couple of days ago by a CA about entering into the Rehabilitation Program. I had seen this coming, so I have already done some research on the program and what it entails - my questions here are for clarification on some of the "conditions" described by the CA that I supposedly need to meet in order to enter the rehab program:

    1. The rep from the CA that I spoke with told me that I would need to commit to making a down payment (I was given a specific dollar amount equal to about 5% of the defaulted loan) in order to apply for rehab, however none of my own research has uncovered anything about a down payment being required for the program. Is this actually mandated by The Dept. of Ed., (the CA stated specifically that he would need a promise of a down payment on Aug 30, the last business day of this month to submit my rehab application to the govt), or is it just an aggressive tactic by the CA?

    2. The minimum monthly payment I would need to commit to in order to qualify for rehab was actually more than my original (pre-default) monthly payment, which seems inconsistent with my understanding of the rehab program. However, this may just be a ballpark figure, like I said he hasn't formally submitted my application to the Dept. of Ed. Also, my understanding is that I would simply specify my income and expenses when applying, and the Dept. of Ed. would calculate my monthly payment amount. Again, does what I was told by the CA seem consistent with the Dept. of Ed's policy, or does it sound more like part of the CA's own agenda?

    3. As I alluded to earlier, I was told by the CA that I would need to make my down payment and first monthly payment by the end of this month in order to qualify for rehab, as well as avoid wage garnishment, a line which seems to be taken straight out of a typical CA employee training manual. Also, I only have 48 hours to make a decision and commit to making these payments. Does the Dept. of Ed. actually operate on such strict deadlines, or is this just typical CA BS?

    4. On a related note, I will need to provide the CA with three references in order for them to submit my rehab application. This is understandable, however I was wondering, based on personal experience, if these references will only be contacted in the event that the CA/govt. is unable to locate me during my repayment period? Such is the impression I got from the CA, but I just wanted to double check.

    To be clear, I am fully committed to making good on this loan, and I feel very fortunate to have the rehab program available to me. However I do have other expenses, and I am in the process of trying to get back on my feet financially, so I don't want to get pressured by an overly aggressive CA into paying more than I actually need to.

    Thanks in advance for your help!!
     
  2. jam237

    jam237 Well-Known Member

    I would memorialize the information that they provided over the phone, accentuate that if any of the information provided by the representative was false and/or misleading they are in violation of the FDCPA.

    Does rehabbing a student loan require a fee? - Yahoo! Finance

    So, the demand for a down payment being REQUIRED to do the paperwork for rehab appears to be false and misleading. :)

    FinAid | Loans | Student Loan Rehabilitation

    So, without asking for the amount of all of the household income, and expenses, there is no way that even an estimate of the reasonable and affordable payment will be, so again, it appears this 'quote' is false and misleading.

    The down payment demand appears to be 'optional' they may be able to request it, but they apparently can't refuse to allow you to qualify for the rehab. No idea as to whether or not the end of the month deadline for the first payment would be valid or not.

    Hey, if it were me, I would tell them to use the $1,000 check that they will need to send you for violating the FDCPA as the down payment. :>

    No idea, but remember the cardinal rule, any information given to them will be used for collection purposes.
     

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