What's the best way to deal with defaulted student loans? I want to buy a house in the near future but I let my loans go into default as I was unemployed for a while . I can now afford to make minimal payments, but don't know where to start in resolving this. Thanks!
exactly same as my situation. owed $14000 in student loan, loan into default. Now collector asked for $4000 in fee & cost while the interest is only $1400. I need to pay the loan so I can buy the house. What's the best way to deal with them? $4000 in collection fee & cost is too much compare with principle of $14000 + $1400 interest. Can we negotiate with them about this fee & cost? Reasons: no job after grad, now only working part-time with a very low income. Thanks,
If it is federal, try communicating with the Office of the Ombudsman (Ohmbudsman?) in Washington D.C.
Not sure if this is route you want to take but there is a program to re-finance your student loan after its been in default.
If your loans were staffords or perkins, your best long-term bet is student loan rehabilitation. When you rehab a loan, you need to make 12 on-time payments, at which point the negs are removed from your credit history and (I believe) the extra default fees go away. When you finish rehab, either pay off the loans or consolidate. But, it sounds like you are in more of a hurry and so the 12 months of payments may not work for you. In that case, there's not much you can do a bout the fees. Sometimes you can still go the consolidation route and get some or all of the fees reduced. Many consolidation companies will consolidate even if loan is in default. I've been reasonably happy with Nelnet, you might want to give them a call and see if they can do anything for you. In the end, though, you don't have a lot of options wrt federal stu loans that are defaulted, at least if you can't do rehab.
This was the route I took and all three CRAs have removed the default from my TL. I am now battling to remove all of the tranferred accounts, 90+, 120+.
BTW, I am a newbie and I am already hooked. I have soaked in a tremendous amount of info and hope to formulate a plan to improve my 521-564 scores. My wife (575-620) and I were able to buy our first house but @ a horrific rate. With a new baby just weeks away, I need to clean up my past mishaps and be able to have some flexibility in life. (I find it amazing how "limiting" almost every facet of life can be with a low credit rating) At any rate, I think the student loans will be my biggest challenge and hope to find/start a good discussion clean up these TLs. I look forward to sharing with everyone here. DaBears
