Premier Credit - Does a Rehab have to go thru the CA?

Correction....your loan went into default because you didnt follow the terms of your prom note. CA's are not assigned student loan accounts until at least 60 days post default...so you cannot blame the collection agencies for your default.

Since you are in default, you will have to work with the CA assigned to the account. The DOE will not work with you.

Call them and tell them that you want to rehab....and dont take an attitude into the call. Find out what your exact balance is now....your principal may have been $23K but with accrued and capitalized interest plus $5-6K in collection fees, I would guess you are up around $32k now. A standard rehab payment could be in the region of $300 per month, depending on your balance.

(I hope this does not post in duplicate - I lost it earlier!!)

I do NOT blame the CAs, I said "partly".

It has been very difficult and stressful to try and deal with 4 different CAs who have 4 different amounts. 4 CAs who do not like the bank statements, canceled checks and IRS offset receipts as proof that payments were made and proof that they have incorrect balances. These same CAs did not even like the statement from the Guarantor as to the correct amount of the 1 loan and the total that is now due. So while yes, it is wise that I not "take an attitude", I'm sure you can understand why I'm so hesitant to deal with yet another CA!


The DOE has the correct amount ($23,187. and change - including fees etc) so I am assuming that Premier does as well. Judging by Premier's tactics, they will probably not be easy to deal with either. So before I make the call, please help with a few more things:

Is it correct that they cannot demand a downpayment?
What if they have a different amount that what the DOE notice says - how do I fix that?
Can they waive some of the collection fees - what are resonable collection fees if they've only been on the job for a week?
If this goes all wrong too, who should I contact to help fix this so that I can arrange payments?

Thanks again! I truly appreciate it!

For a rehab they cannot demand a downpayment....they can ask for it, but they cannot make it condition of a rehab.

Collection costs are assessed to your account 60 days post default...they dont charge them, the guarantor does. The CA only is paid a small portion of the collection fees. They will not be waived unless you complete the rehab.

Prior CA's collecting really dont care what prior offsets were made...when they receive a balance, they are not pulling it out of thin air. Accounts are electronically placed and updated by the DOE...any prior payments would be credited by the DOE but are not going to appear on the CA payment screen.

"Prior CA's collecting really dont care what prior offsets were made...when they receive a balance, they are not pulling it out of thin air."

Unfortunately this is not true - one prior CA said my balance was $147,895 and would NOT budge on that no matter what I submitted. I'm convinced that someone had ID thefted me or something but nothing ever appeared on my credit report!

I did a quick call to DOE and they suggested I call Sallie Mae to get their spreadsheet of payments etc.... as DOE did not know of any offsets or prior payments. I don't think I need to do this because I know the amount is correct this time! I'll call the CA and see what happens. WIth luck, they will have the same amount!

Thanks again for the clarifications :-)

Sallie Mae only handles current accounts and thus cannot garnish anything ...wages or taxes. Maybe you had additional loans. Have you looked your loans up on NSLDS??

Here's an update.

As expected, got total and complete runaround:

Does the DOE require 3 references to do a rehab and only auto-debit for payment? Is there any "income qualification" - they said they had to make sure I could pay so they needed my expenses and monthly income.

I was told the following - this is from my notes so it may not be all coherent!:

"In order to get into fed loan rehab, must go through a financial assessment. This is a strict and keen program that must be monitored. Time limit on rehabilitation offer is 24 hours. This is the way the contract with the Dept. of Ed. works.

Needs a financial assessment to show to ED can repay. Rehab is not offered to everyone. Financial Info must be plugged into system and that goes to ED to determine if eligible.

In order to qualify, you must make a down payment, $5,000.00 Program offer to me is $5,000.00 and $910.00 per month

Not offering me the program unless I make a down payment. This is a benefit is not a right, it???s a courtesy.

I have no rights or an entitlement - does not apply to defaulted student loans.

Pushing me for a $5,000.00 - without the down payment it is a possibility that will have to make higher monthly payments.

I offered $500.00 monthly payments.

1st stipulation ??? must be auto-draft.
2nd stipulation ??? must provide 3 references

Cannot get into the rehab program unless using an auto-debit. Cannot mail payments.

If I do not provide auto-debit payment cannot do the rehab. A Rehab Contract must be signed within 24 hours."

So then, there are a lot of errors in these statements aren't there!?!

Lightbulb - When I caled ED last week, they said I could send the payments to them directly or to Premier. Hmmm......does Premier want to do auto-debit so they can show they "worked" to get paid their collection fees?

OK .. .this is how rehab works.

NO downpayment is required . Period . They can ask but they cannot demand or say that it is a requirement of rehab . The requirements for rehab per the Higher Education act is 9 "reasonable and affordable" payments" Standard payments for rehab is a 1% of your balance payment. Your can request "reasonable and affordable" payments. So on a $50, 000 balance , a standard payment would be $500. $250 would be considered reasonable and affordable. $50 might be considered affordable but it is not reasonable based on your balance.

References and a financial statement IS a requirement of rehab. Dont argue it.

Autopayments....are not a requirement. However, when I was a collector, I would not set up a debtor with out autopayments. Why?? Because 75% of my debtors failed the rehab without the autodebits and it was just too much damn work for me. The DOE CA vendors are held to extremely high standards when it comes to autopaments. It aint worth loosing a multi million dollar contract to cash your check early. On a $500 payment, the CA makes approximately 9%...so $45.

When you are assigned to a CA, it doesnt matter if you send your payment to the CA or the DOE. The DOE automatically pays the fee to the CA...it is called a pay direct.

Hey thanks again for your reply!

I have a friend who has the EZPass, this EZPass took over $1,000.00 from her account due to some glitch - Have you any idea how long it took for her to get her money back, the bounced checks and missed payments and hassle?

This is why I do NOT want auto-payments; not because I'm worried some collector is going to misappropriate my funds but because some computer could go wonky and misappropriate my funds!

So if this is not a requirement, then I am going to begin sending in payments to the DOE address as directed on their notice. Of course I am going to let the CA know that I do not want the auto-payment method and that I will be sending payment to the address as instructed. Is this ok to do?

As a sidenote, I got the Agreement via email. There is no mention of 3 references nor is there a mention of auto-payment. There is no mention of the monthly payment amount nor is there a mention of the date that payments will be auto-debited. The agreement is just a reiteration of the rules of the Rehab program.

Since there is no signatory to the Agreement on the part of the CA, can I create an addendum to the Agreement (which is very dodgy looking and not in PDF) stating the payment amounts, the due date and the fact that I decline auto-debit?

I set the $500.00 (much higher than the 1%)because I just want to get this over with! Can I make double payments if I want to?

I'm just wondering, why on earth do the CAs say these things if they are untrue (and borderline illegal) to say?

Thanks again for your wisdom; it's tough getting out of a hole without getting beaten back into a bigger one!

You cannot change any of the agreement.. .period. Actually what they are sending you sounds like an acknowledgement, not a rehab agreement. You do not even qualify for rehab until the 9 payments are made .

FYI.... collectors cannot misapropirate the cash. your data is pulling into the system and from then on, they have no access to the account numbers. Everything is handled by the accounting department. Our old system automatically plugged the payments into the DOE datasystem and they ran the payments each month.

If you dont do the autopayments, your rehab may or may not go thru. It wont go thru without the references. (The references are used for the documentation to reinsure your loan) Miss a payment or have it get lost in the mail and you will probably find yourself in garnishment pretty darn quick. Those are the risks you are taking.