DCS REHAB PROGRAM- DCS Student Loan Collections

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I need some clarification on this loan rehab program that DCS offers.

DCS does not offer the program per se. Rehab is a program offered by all federal student loans...the regs are set in the Higher Education Act.

My husband has been in the payment process. he paid their 1%, he has paid 4 months into this program, and 5 left to pay. they assured him that it will be removed from his history and that a loaner will purchase this old student loan where he can set up payments (some 12 payments) to pay off this old student loan that is a major lien on this credit report. My question is, is this program LIGIT?

Yes
we are trying to buy a new home, we have asked them if there is any way he can just PAY these people in one lump sum and get it over with,
Nope. The rehab program by law requires that he make the set amount of payment on time.


and they have said that he can pay it, but that means it will void the program and that they will notify the credit bureu that the lien was PAID but it wont be removed from him credit history. I need to know if there is any other way we can solve this, the quick and efficient way (paying it and getting it removed from his credit history) I want to know if this rehab program is ligit, because WHO WOULDNT WANT THEIR MONIES UPFRONT!!... its all very confusing. Can anyone please help. We need to buy a home, we are expecting a baby and we need these issues resolved pronto! [/quote]

Federal law sets out the rules for student loans. You can go ahead and pay it off in full but you will be left with the negative tradelines for 7 years from the date the default claim was paid. With rehab, it gives you the opportunity to remove the negative tradelines but you have to basic prove to the lender that you can make payments on time for a period of time.

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Here is the Catch - The reason why they dont want you to pay in full is becasue after you make your 9 - 12 consecutive payments, they resell the balance of your loan for priciple plus a fee of approx 18% of the balance that will be financed by the company that acquired you loan. I am trying to figure out a work around here...maybe after it comes out of defaule and right before they sell it, I can pay off..otherwise the paperwork they sent me states that when the loan is resold I agee to fee the fee percentage...geesh..

It is not a catch.....you pay in full, you also still pay the collection fees.

The loan doesnt come out of default UNTIL they sell it.....the action of rehabbing it involves the funds and loan transfer...there is no window to slip thru.

Keep in mind if this was a FFELP loan...a loan taken out thru a bank or lender like Salimae, Citibank etc....the original creditors trade line is NOT removed...only the guarantors trade line is remove. If this was a defaulted Direct Loan, this is not an issue.

I have been making payments to DCS each month. They are requesting a financial statement from my co-borrower (which was given to them). DCS is now requestuing $5,000.00 down payment from the co-borrower abd $232.00 payment month. Neither one of us can afford the $5,000.00 down and would not be able to handle $232.00 per month-we offered $150.00 per month. What do we do. My co-borrower is elderly and they indicated to her that they(DCS) would take money out of her retirement fund. Wgat do we do?

Technically they can ask for anything they want....both of you agreed to balance in full on demand.

DCS cannot take any money from her period. In order to take any funds, they would have to sue first....which depending on the balance will probably happen anyways. SS funds are exempt.

DCS does not actually own any of the loans, they just service the default loans. The original lender owns the loan. The reason they can not take the full payment is because the contract they have states that they can take full payment or make payment arrangements with you. The writing of the rehab law says that with 6 payments they can remove the delinquent status, so regardless of how silly it seems, it was a bureaucrat who made this happen in this manner not them. Be careful they will not offer you every option, just the one that they train the employees to offer you and the one that benefits themselves the most. Always get it in writing what they say on the phone. That way if they do not tell you the full truth you can have useful information in the future. However, do not expect them to fully give what they said to you in writing either. They will leave out things to insure they stay in good graces with the agencies that they service the loans for. Depending on the state you live in, record the phone call, this is easily done using Skype. Some states prohibit recording conversations, some prohibit recording conversations without the other party knowing, some states allow you to do whatever you want. Even though it is hard to discharge a student loan in bankruptcy, they still have to follow the same rules in dealing with you as do other creditors. Read the fair credit reporting act and what they are allowed to say or not say, do or not do. Make sure you take notes about the conversation and send them a letter about what was discussed.

Sorry jerks but the original creditor does not own the loan...the OC would have been in the case of a FFELP loan a bank or servicer or the Direct Loan Program. You default, the guarantor takes over the debt.

Student loan contracts if you have ever read it state "balance if full on demand" upon default. There is no provision for payments after default in a student loan prom note.

Rehab law doe NOT say deliquent status is removed after six months. The law is the Higher Education Act. The deliquent status is removed after the borrower has completed 9 payments AND the loan has funded. you become eligible for title 4 funds after six month...you are still in default.

They will not put anything is writing....the prom note is in writing and the CA's will not and cannot changes the terms of that note.

You are clueless when it comes to student loans...please refrain from giving advice in a subject that you have no knowledge of.

I am changing jobs and will have a two month lag in paychecks...Any ideas on what my options are? I will be broke for the next two months...Arggg!!!

Talk to your lender...defer or forbear your loans.

As SoapLady has suggested, you will have to contact your lender and apply for loan forbearance. You will have to write a hardship letter to the lender and inform him about your present situation and request him to consider your request. It is the lender's discretion whether or not he will consider your request. If he considers a forbearance for you, then he may either reduce or suspend your payments for the time being. Once the forbearance period ends, you'll have to make extra payments in order to pay off the delinquent dues.

Dont bother with hardship letters...for federal loans you can either apply online or download the paperwork. Call and ask. If it is private, good luck. They dont offer anything. And you do NOT have to make up the extra payments if they grant you forebearance.

before signing up for any programs will they try to take any tax returns and do i have the opition of saying no?

No you do not have any option.

You are probably already too late to get your 2010 taxers back....those lists were submitted to the irs at the end of last month. It you were not in repayment, dont expect to get your taxes back.

My paychecks are being garnished and I had to start making voluntary payments in October 2010 or DCS was going to take my taxes. The voluntary payment is ridiculously expensive more than what they take out of my paycheck. I only agreed bc I didn't want DCS to take my tax and I was scared. However, this was not put in writing. Also, DCS stated I could only call to make the payment on the phone but when I go to make my payment, my loan agent never picks up his line and does not call back EVER. I always have to track someone down to take my payment. There is no customer service department who will take my pymt. I find this odd since DCS is a collection agency. I'm scared they are trying to make me miss a pymt so they can take my income tax. I just want to know if I can lower my pymt and anyone's opinion on my loan agent not taking my pymt.

You are not a customer...that is why you dont get customer service....the guarantor of the loan is the customer.

Sounds like you are doing a rehab over and above your garnishment....9 months of on time payments.
Call and ask for a qualified manager or ask for the accounting department.

Ive made my 9 payments but was told it could take 30-60 days to get purchased. Will they take my 2010 tax refund if ive been in the program.

FYI....you need to keep making your monthly payments until your rehab has funded and you receive notification. If you stop now, you rehab will be cancelled.

Talk to the CA or guarantor handling your rehab....they will be able to tell you if you have met the requirements to be taken off the offset list.

My student loan is in default status for the amount of 60,000! Of course, in hindsight I know it was foolish to borrow so much money but at the time I just wanted to get my degree. I could not afford the repayment amount and went into garnishment status. They are garnishing 15% of my take home income. I recently contacted DCS and was told that if I can prove hardship they would lift the garnishment. They did not say this was the rehab program as I had previously discussed that option and could not afford the double payments they wanted for 3 month period at which time they said I would then have to agree to a draft from my account for 9 consecutive months. My question is - is there a 'Hardship' program where there lift the garnishment all together? They are not offering a lot of details about this program.

I have made a total of three monthly payments and im not due for another one until 2/20/11. when i talked to the representative they told me as long as i had signed up that i wouldnt be put on the offset list which i called and i am. what do i do now?

The CA doesnt place the lien for offset....that is all handled by the guarantor. Each guarantor sets a guideline as to what has to be paid in that calender year in order for a borrower to get their taxes back...there is no legal obligation for them to remove you other than as a courtesey.
Call the CA and ask...however they have no control and no knowledge of who is offset and who isnt.

I am in the repayment program and called my guarantor salliemai and was informed by there system they didn't have a lein on my taxes is it safe for me to fill and get my taxes back?

Sallimae is not a guarantor unless it is a private loan. Private loans do not place liens since they are not federal loans. I guess the answer is obvious...go ahead and file.

who would be the guarantor for a federal student loan i got through sallie mae

united student aid fund was who informed me that the had nothing against my taxes would that make it safe to file?

Well if they are your guarantor and they said they didnt file a lien against you, then I would guess if would be safe to file.

:(After your 9 mths of payment and your loan is restate do you have forberance and deferment periods again?