Defaulted student loans

[TechHead87]

Ok, here's the story. I arranged to have my student loans in the state of "forbearance" until July of 2006, while making plans to return to school in August.

Turns out, all of my loans (apparently) were put in forbearance, except ONE. That loan has been hanging out to dry since 2003.

It's been turned over to collections, and now they're threatening me with this/that/other. How do I tell the student loan company that I wanted ALL of them in forbearance? Was this their screwup, or am I just screwed and going to have to deal with it?

 

[QED]

Who is "they"?

If all of your loans are through the same agency, and you requested a forbearance on each loan (you should've had to sign a forberance agreement for each loan seperately), then obviously this is their problem and they should fix it.

If you didn't fill out the forbearance form for that particular loan that didn't go into forbearance, it is obviously your problem.

You should still have copies of the forbearance papers you signed. If you do, send a copy to the loan holder and they should get it cleared up.

Otherwise, I would call them up and plead ignorance & mercy. If that has hit your credit report, it could do some serious damage-- not to mention the accrued penalties and fees.

Good luck...

 

[Gibson486]

Same thing happned to my gf. If you are in school, you are not responsible if you picked to not pay while in school. Just give them proof and you will be fine. Collections may say otherwise, but keep fighting it.

 

[Axoliien]

You are pretty much held responsible for your own loans, but if you call them and show physical proof in forms of letters, activity, etc that shows all others were put into forbearance then you may be able to work something out with them. It really happens to be your fault though, I hate to tell you, since even though you request their status change, you should always follow up as well to cover yourself. Just see if you can work something out with the credit agency you got your loan through, especially if all your others were put in correctly and one was missed.

 

[altonb1]

Pay your bills, dead beat!

Seriously...cal the laon company and see what you can do that way, 1st. why ask a bunch of smart-a$$ ATOT'ers for financial advice?

 

[DaShen]

Don't know good luck.

Get a lawyer and maybe he can figure this out.

 

[AndrewR]

First step is to get a copy of your credit report ASAP! You can use a credit card and pay to have it delivered electronically today -- DO IT. That will give you immediate information the state of your credit score as well as the status of the loan in question as well as the other loans.

If it's defaulted and been paid off, the loan servicer won't have anything to do with you because it means that the guarantor paid the loan and forwarded it for collection to the collection agency. So you need to know the status of the loan account immediately.

When you do find out what is going on with it, I would try to work with the guarantor (if it's been paid by them) first before talking to the collection agency. If the CA keeps bugging you, request everything in writing and request they not contact via phone. Do some searches about CA online -- there are some great ways to handle them.

If you have defaulted, and you cannot fix the problem, you want to get what's called a rehabilitation loan through your guarantor. Basically, you'll set up a payment plan with the CA for a certain amount of time (varies), and then when you have satisfied that payment plan (basically, you show that you are meeting your obligations), they will re-issue a loan and send it back to your original servicing company.

The default stays on your credit for seven years, but you can rehabilitate your credit sooner than that with timely payments. As you can probably tell, I had a default on some of my loans because of military service and the company's ineptitude, but my credit is back to normal about two years later. I just got a car loan for $28K at 5.49% from my credit union without any problem.

Is it PHEAA by any chance? Those bastards are the most corrupt, inept, and useless sacks of garbage in the financial world.

If you have any questions, let me know.

 

[TechHead87]

Originally posted by: AndrewR
First step is to get a copy of your credit report ASAP! You can use a credit card and pay to have it delivered electronically today -- DO IT. That will give you immediate information the state of your credit score as well as the status of the loan in question as well as the other loans.

If it's defaulted and been paid off, the loan servicer won't have anything to do with you because it means that the guarantor paid the loan and forwarded it for collection to the collection agency. So you need to know the status of the loan account immediately.

When you do find out what is going on with it, I would try to work with the guarantor (if it's been paid by them) first before talking to the collection agency. If the CA keeps bugging you, request everything in writing and request they not contact via phone. Do some searches about CA online -- there are some great ways to handle them.

If you have defaulted, and you cannot fix the problem, you want to get what's called a rehabilitation loan through your guarantor. Basically, you'll set up a payment plan with the CA for a certain amount of time (varies), and then when you have satisfied that payment plan (basically, you show that you are meeting your obligations), they will re-issue a loan and send it back to your original servicing company.

The default stays on your credit for seven years, but you can rehabilitate your credit sooner than that with timely payments. As you can probably tell, I had a default on some of my loans because of military service and the company's ineptitude, but my credit is back to normal about two years later. I just got a car loan for $28K at 5.49% from my credit union without any problem.

Is it PHEAA by any chance? Those bastards are the most corrupt, inept, and useless sacks of garbage in the financial world.

If you have any questions, let me know.

Thanks for that advice Andrew. What does PHEAA stand for?

 

[kranky]

PHEAA = Pennsylvania Higher Education Assistance Agency.

 

[zanieladie]

Originally posted by: DaShen
Don't know good luck.

Get a lawyer and maybe he can figure this out.

:thumbsup: