Private student loan

Hi John
I think that you can let the creditor sell off the debt to the collection agency and once it goes to the CA, you can settle the debt with them. However, since under debt-settlement, you need to pay only about 40 to 50% of the outstanding debt, the collection agency does not agree to pay for deletion agreement and so the status of the debt is listed as "settled for less" in your credit report. As a result your credit score does not improve, even after you pay it off as agreed.

Student loans are NEVER sold to CA's...they are placed 3rd party so that the holder retains ownership. With the accrued interest and fees adding up, you are probably looking at $24-25K six months from now. If you are employed, it is highly unlikely they will take $15K...you loan will be far too new to settle that low. That being said, you are better off paying the taking the forebearance, paying the $15K six months from now and then making payments based on the remaining balance.

Uhhh my private student loan was sold to a CA ....where do you get your data.? link please?

What data???

You stated student loans are never sold to CA's. Do you have documentation that supports your claim to this?

I worked in the industry for over a decade. It is pretty common knowledge. Federal loans retain the federal guarantees and private loans generally held by the bank/servicer or lender who originated then. Why would you sell a basically secured loan off for pennies on the dollar? You cant file bk on these debts!!

I have a private loan that was sold to a collections agency. This is the case. The original creditor has nothing to do with this private student loan...Therefore what you say is not totally true. My private student loan was sold for pennies on the dollar most likely as the CA HAS attempted to settle.

It was more than likely assigned to a CA, not bought. Most people "assume" they are purchased. A lot of times a bank has a guarantee behind it, like Salliemae or AES.

Even private loans that are assigned do settle all the time.

this is a privatley funded(Non-Government) Studeent loan, it will go to a CA

Yeah, but who funded it???

Your other moderator says

2) As far as contacting the OC, it depends whether they still own the debt (or did they actually sell the debt to the CA)? If they sold it, they can't do anything any more. However if they do still own it, they can recall the debt from the CA, in which case the CA shouldn't report it.


You say
(Soaplady)
Student loans are NEVER sold to CA's...they are placed 3rd party so that the holder retains ownership

What you are not understanding is with a lot of private loans and FFELP government loans, the OC is a a bank/lender/servicer. Upon default, a claim is paid by the guarantee agency. The guarantee agency then places the loan with a CA. Once defaulted, the OC is out of the picture. Even recalling from a CA is difficult as the CA's work under contract with the guarantors. Unless there is sufficient cause to recall the loan (FDCPA violation ) the guarantor is bound by the contract to pay the CA their commission.

To the OP, I agree with Soaplady, do the forebearance, pay the entire $15,000 once you get your money, then ask your lender to recalculate your monthly payment.

I have the same problem with Teri. I heard that they are going bankrupt. They have assigned my loan to a law office in Mich. do you think that they will be willing to settle?

Private student loans will always settle..however do not expect the same type of settlement as other consumer debts. They may go 25-30% off.

I am going through the same thing right now with a CA that has been assigned 3rd a private student loan for 8K. It was defaulted in Dec 08 and now the OC will not even speak to me. They will only refer me to the CA. I have tried to settle with them and offered 7K and the OC wouldn't accept it so the CA said no deal. They came back with an offer of $8998 to settle. Since I'm borrowing the money to pay this I'm not sure what my next move is. Do I just set up a payment plan and spread it out for as long as I can or borrow the rest of the money and pay it off. My thought is after 6-9 months of payments I would come back with another offer. What do you think?

How much do you owe??

8K

If you owe $8k,how do they come back with an offer to settle at $8998?/

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They say I owe $9480 with their fees included. I actually agreed with the CA on the 7K last Friday and paid them. 4 days later they called and said I owe another $2480 because the OC wouldn't accept the deal. When I mentioned to them we had a deal and you accepted the money that the deal was done. They say no deal was ever completed because they have to get approval from the OC. Of course they never told me this so I called the OC and they confimed they did deny the offer. I offered again to deal with the OC directly and they refused. I pulled the 7 K back and am starting fresh. I asked the CA to give me in writing the settlement deal they are offering and that's what I received from them an offer of $8898.

By the way the CA is Windham Professionals who when I googled them up found a lot of the same type of nonsense from others.

It is very common with student loans, particularly private ones, that their has to be client approval. You should have been told. It is quite possible that the CA did not have an up to date balance in their system..when I was collecting that was a common pitfall.

Wouldn't the OC be better with 7 K now rather than risk the possibility of 5 years of payments which I am also considering. Even though it costs more in the long run its easier on me to make the payments. Do you think this is a fair settlement offer or should I continue to negotiate?

Really the OC runs very little risk. No bankruptcy on student loans and they will sue you in a heartbeat for the balance. And you pay all the costs.

You are a new default....you arent going to get much better. They dont want people defaulting and then months later having big $$ written off. You have only been in default 60 days or so.

Just as a reference question that intrigues me in all ths is in a 3rd party assignment to a CA would you have any knowledge as to how much of a commission the CA gets from the OC?

By the way you've been extremely informative to me. Thanks again.

Federal loans are about 9%....private loans vary from 10%-30% with new placements being at the low end. I used to collect some private loans thru Loyola University....I preferred the old accounts as people had a chance to get set in their jobs and the fees for me ran around 35%.

I just found this thread, and am intrigued! SOAPLADY, you say above that private loans will always settle? So what do I do in this situation: I have $36k in loan with Sallie Mae, and my father is offering to give me $25k to settle... 70% shouldn't be too hard! Is there any way I could get some help planning how to approach this? Calling Sallie Mae is already a ridiculous task, and can take hrs... Any advise on how to cut to the chase?

Sallie Mae will not settle on a non defaulted loan....there is no incentive.

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Private Student loans are being settled every day. They are even offering settlement as they contact defaulted borrowers. They will settle for around 60% . Although the CA may not own the debt since the guarantee agency has paid out the default they will still settle. i would try for the settlement at 15k first. Than see what they say. These guarantee agencies are hurting since they guaranteed more than they had in reserves.

or you could just do a private loan, pay off the student loan and bankrupt on the private loan.
Also, isn't there some point when you're in default and not making any money that they may sell the debt and then wouldn't it lose it bankruptcy protection?

i am also having problems with MRS. they stated that ed finance patners went bankrupted and then loan science took them over, liquidating all assessts- now mrs is telling me they want $20,000 in am month or they will sue my grandmother (cosigner). they said she has $12,000 line of credit on her credit cards and will take it. i attempted to make a payment plan and they stated they dont take partial payments only the full amount. there is not way i can get $20,000 in a month. is this even legal? and how long with the suing process take them. what is the best and worst case scenario? i am so scared i am sick over it.

Does your grandmother has access to the funds? She is just as liable as you are and they will sue both of you.

August 21 2010 - 11:29pm
My question is as follows, in the year 1992 approximately a loan was given to me from Canada Student Loans Centre / or OSAP; no longer have the loan documents. This was a student loan for a private institution, the loan was taken by myself in good fath; however it became very quickly apparent that any attainment of career would be very less than zero, although this private institution gauranteed all students would be employed after completing the course, other incidents lead me to the aforementioned conclusion such as; a stolen object on class trip - which did not involve myself, the extreme cost of the courses is equal to a university education, not aware of this at that time, the current indications from past students, on the private institutions website, currently, reflecting the reputation, and quaifications of this private institution. These indications are not anywhere near even a good rating statements as; "students increased their self-confidence", why would someone pay thousands of dollars to increase their self-confidence?
My current situation is that after informing the institution to return the loan they refused, my attedance was only one or two classes, a second call some number of years ago informing me again of the loan to which again my statement was that the institution was to return the loan to the government of Canada. The amount outstanding is said to be approximately $5000.00 my OSAP is blocked from receiving further student loans due to this institution, which recently has not returned my email. In addition, having received no education for the amount that is said to be outstanding in repsect of Canada Student Loans.
The institution never contacted me further in regards to my education or my loan, kept the entire money, as for myself received no education; nothing material of any sort was ever sent to me from the institution, and no refund was ever given.
Current Problem: recently, after making my application for university, and giving acceptance of one offer of two; one, for a Bachelor of Arts in Anthropology, and, the other, Certificate in Anti-Racism Research and Practice, now being faced with the issue that the money still remains in debt in respect of Canada Student Loans, and being lied to by various persons in question of this loan such as; National Student Loans Centre who stated that the loan was returned backed to the governent, my inquiry does that mean refunded? answer was YES! My account is on HOLD and now no loans will be processed.
Also, graduating in August 2010 from Secondary School and receiving my diploma, most of my marks are in the 80%'s; being a mature student, and, also, working very hard for my marks; do not want to lose my degree.
Also, just a brief note my oher debts are minimal, and probably would not total more than $10 000.
Could you please assist me in this matter; this is my first offer ever for a university education.
Thank you,

What I suggest is that you find a board dealing with Canada student loans. Tell your story in a short and sweet manner. you have presented too much information that is irrelevent and quite frankly, it is too difficult to figure out.

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