student loans rehabilitation

How much do you owe?

The definition "reasonable and affordable" is two fold...it has to be affordable for you but reasnable based on your loan balance. A $50 payment might be reasonable and affordable for a $8000 balance but not a $28000 balance.

Your other option is to consolidate under with direct loans.

I believe with all of the fees, it is around 40k. To settle in full they wanted around 20k. Currently they are asking for a rehab amount of 350 per month. I am going to call tomorrow to confirm the breakdown. With help from family, I can afford between 200-250 per month. I am so ready to be done with the default. Is there even room for neg. once it gets to that point? I do see your point regarding it being two fold. I can tell you now, with all that we put out monthly vs. our income, from my end 250 is the absolute max I can afford. And, that is with help from family. I am going to look for info regarding consolidating. The CA told me in a conversation to stay away from consolidating, that it is not a good option for me.

Consolidating is a VERY good option for you....you would get payments based on your income. Look up Direct Loan Consolidation.

$250 I would consider both reasonable AND affordable for a $40k balance.

So I spoke with the CA today. My actual balance is around 50,500. Without all of the fees, it is around 38,381. The rep said that the pymt for rehab is 342 for 9mths. I was advised that 342 is considered to be a "Balance Sensitive Prgm." Is there any hope to get the rehab a little lower than this? We no longer spend money except for on necessities, and cannot do any additional cutting back. I am trying to find a part-time or work more hours where I am to make ends meet. Could an Ombudsmen assist with me getting the rehab even a little lower?

In addition, the CA advised that I only have a "few days" before my employer is sent garnishment paperwork. I haven't even received any correspondence via mail regarding the outcome of my hardship. The CA did give it to me verbally, but shouldn't written documentation also be provided?

Did you receive a 30 day garnishment notice? If that was why you submitted documentation, there is no written confirmation sent. However if you have not come to an agreement as to your payment they can move forward with the garnishment.

Based on your balance, a standard payment would be approx $505 so $342 is reduced. How much lower were you looking for?

I received the 30 day garnishment notice back in Dec. I submitted the paperwork, and it was ruled in my favor. I received paperwork again in June, and it was due in July. I submitted, and they told me they didn't get everything they needed (which they did and later found). I submitted the exact same paperwork but the updated versions this go round, but I received a call last week stating I would need to pay around 170 for the next six months due to a partial agreement, and then it will be reviewed again in six months.



Financially, it is not the easiest. I am optimistic, but very apprehensive to agree to an amount that I already know we cannot afford. I really have the desire to get this rehabed though. My family is willing to help but in moderation. I was hoping around 200-250, but I am guessing that is not realistic? Is there anything below 342 that you think would be doable on their end? I did not get a sense that the CA is willing to let up any on that amount...although that amount may come from the Dept of Ed. And, again I was urged to not consolidate.

I hate to be antsy, but I was advised that I only have a few days to make a decision. I am completely stuck.

One more question. If I do the rehab program, do they provide me with paperwork? I have done it with another CA for the same account, and didn't have paperwork so I lost out in the end although I was making my payments and could prove it via my bank account.

One more thing, as you advised, I am researching Consolidation. The person I spoke with told me I will be in a worse position if I consolidate. I am sure the angle is that of a CA's. But, one thing was mentioned that I question. Rehab vs. Consolidation: with rehab, I get rid of all of the fees and with consolidation, the fees remain and I pay double. Am I viewing this the wrong way?

You wont pay double.

It is true that the collection fees are waived if you successfully complete a rehab. However if you cannot afford the rehab, it is the best alternative. You would be out of default in less than 60 days and you will have payments based on your income. You will NOT be in a worse position

Thank you so much! I think we are going to go for the Rehab. I am going to see if maybe they can get the DOE to approve 300 monthly. I guess it doesn't hurt to ask.

So I made the nine month agreement, and I have made my first payment already. I received the "agreement letter" today, and it show 12 payment dates. I am confused. Is this type of letter standard for the nine month rehab program?

The extra payments are probably a safety net....sometimes rehabs do not fund on time and you have to stay in repayment until the funding occurs.

Will I still be considered rehabilitated after the nine months?

Nope....rehab does not occur until the loan is funded.