Defaulted Student loan: settle or rehab?
Date: Wed, 08/18/2010 - 17:21
Defaulted Student loan: settle or rehab?
I just received notice of a defaulted student loan and spoke with the collection agency. The total principal and interest is 14,000. Then there's the collection fees. I was told I could settle with a partial (2,500) reduction in fees or go into a federal rehab program for 250/month. I didn't even know you could negotiate. What is the best option? Should I try to settle?
Thank you.
Thank you.
Rehab is better for your credit. If this was a defaulted direct
Rehab is better for your credit. If this was a defaulted direct loan, they will waive the collection fees upon completion of the rehab. If it was a FFELP loan thru a bank, they will not.
If you settle, you will receive a 1099 for the settled portion.
