rehabilitation

You got bad information from the DOE. If you consolidate, the default status will be removed but the tradeline will NOT be. Even with rehab with a FFELP lender which NJ is, only the guarantors negative remarks get removed...the OC remains. The defaulted tradelines remain for 7 years from the claim paid date.

mrs soaplady, thank u for the response. if i dispute with the credit bureaus after consolidating with the govt, is it likely the tradeline from the dept of ed nj get removed if i get a paid in full letter and then dispute? I know the original tradelines form the oc will remain. do u think the chances are good I can get the guarantor NJ ED tradeline removed through dispute since I finished their rehab time requirement and they are in the process of getting a lender but cant find one right now?? thank u..

Nope, a dispute will NOT be sucessful. The Higher Education Act defines the reporting period for a default...as long as it is reporting accurately (zero balance, defaulted student loan)it will not come off. After rehab and consolidation, they have 90 days to update the tradeline.

i just dont understand why 2 of their rep's would tell me to consolidate then dispute it n it would be removed cus they wouldnt fight it. its not right for them to give me this seemingly bad advice, which would in turn ruin all the months of rehab, 11 months now, i put in. do they have a reason to coerce me to consolidate? is it to their advantage somehow for me to do it soaplady? thanks again

Think of it....New Jeresy Higher Ed and the Department of Education are two different entities. It is like ATT telling you what Sprint will do....they should not be giving information for another creditor.

A lot of the FFELP lenders like New Jersey and Texas have had problems getting rehab lenders. You could end up with a long wait. Quite frankly, there is little benefit to rehabbing a FFELP loan other than one of the two negative tradelines being made positive....you are still stuck with you OC negative tradeline. It used to be all you had to do to qualify for a mortgage was get your loans out of default....talk to your lender...see if consolidating will serve the same purpose.

im sorry mrs soaplady one more thing. my loan is now held with nj hesaa, i guess they took over the loan after i defaulted. 2 reps from nj hesaa told me to consolidate with the govt n then dispute to have it removed that way, i'm guessing they meant if i disputed after consolidating nj hesaa would not fight the dispute and it would drop off their tradeline. i know the OC tradeline stays, but does nj hesaa have any incentive to tell me to consolidate with the dept. of ed? any incentive to give me wrong info just to consolidate?

Hi,
I recently had a judgement filed against me for wage garnishment for repayment of my defaulted student loans. I filed papers saying that wage garnishment would pose a hardship to me.

Anyway, I lost that battle. The department of education's decision was that 15% of my income would pose a hardship, but less than 15% per month would not.

So to avoid the garnishment, I called the collection agency and told them I wanted to set up a payment plan.

I was told that I could either pay the amount the garnishment would have been and is less than 15% of my gross income or pay twice that amount for 9 months to qualify for rehabilitation.

Why the rehabilitation qualification amount is twice the amount the Department of Education said I could afford without suffering financial hardship. Is this legal? Why is this collection agency contracted by the Department of Ed allowed to do this to borrowers?

I read on the Student Loan Borrower Assistance website that:

The lender will probably say that minimum payments are required so that the lender can sell your loan at the end of the ten month rehabilitation period. Private collectors will almost always tell you this because they only get paid a commission if they set up rehabilitation plans where borrowers pay certain minimum amounts. Despite what they tell you, you have the right to pay only what is reasonable and affordable. Although this is difficult, the best way to deal with this problem if it arises is to tell the lender that you are aware of your right to a reasonable and affordable payment plan and to keep pushing until they give it to you.


I have talked to an adviser at a default management service, someone at the department of ed and the collection agency's default department. No one has been able or willing to help me resolve this disparity between what I can afford to pay and what I'm being required to pay to enter rehabilitation.


I know I have to pay and am willing to do so, but what recourse do I have to get the collection agency to agree to payments that I can afford AND that would allow me to qualify for rehabilitation if the department of ed (i.e. the Government) isn't willing to step in?


Any advice or help you can give me would be appreciated.


Thanks

Garnishments are 15% of your disposable wages, not gross. And no judgment was obtained. They are attempting to garnish you under admin wage garnishment.

What you are not understanding is "reasonable and affordable" works two ways. It has to be affordable to you PLUS reasonable to the CA based on your balance and rehab requirements.

How much do you owe?

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Reasonable and affordable does only apply to rehab....however based on your balance your payment might be affordable but it is not reasonable based on your balance, at least not for rehab. The standard payment for rehab would be $800 per month, with your interest being around $400. The payment you are suggesting that is affordable you is just setting you up for redefault.

You are a prime consolidation candidate....I would definately head that path.

Actually, the loans have already been consolidated. I did that through the William D. Ford program.

Can I do that again? Probably not, right?

Question, did the DOE every find a lender?

DOE never had an issue....the DOE lends for the DOE. It was FFELP lenders, the state and regional lenders that had trouble finding banks to rehab loans.