Rehabbing My Student Loan
Date: Wed, 09/16/2009 - 15:28
Rehabbing My Student Loan
I apologize in advance, this is going to be a long post.
Around Nov. or Dec. of 08 I decided that it was time for me to go back to school and finish my degree. I had been saying that I was going to do it forever but never had the time. When I suddenly found myself unemployed and seemingly without hoping of finding another job for quite sometime, like a lot of people, I decided what a great time to head back to school.
The only problem was those damn student loans that I never took care of. I called the DOE and they gave me the number of a third party (I assume a debt collector) that I had to deal with. This third party wanted to set me up in a rehab program paying $450/month. As I said I decided to go back to school because I couldn't find a job, $450 a month was out of the question. When I told them that I was told that I could pay $50/month. I figured I could scrape together the 50 bucks a month to make this happen. I was also under the impression that if I paid this $50 a month for 9 months, my loans would come out of default. So I started maknig the payments. 50 dollars is a lot of money every month when you're out of work, but I did it.
I was very happy yesterday to recieve this letter in the mail from the US Department of Education:
"Congratulations! You are one payment away from having your defaulted direct loan(s)
Once you have made this payment in a timely manner, the U.S. Department of Education will begin the rehabilitation process for your direct loan(s). When the rehabilitation process is completed you will once again be eligible for the same benefits that were available on the loan(s) before the loan(s) defaulted. These benefits include the various deferments, forbearances, and repayment plan options explained in your promissory notyes for this loan(s).
Please call us at (888)475-67** for instructions on making this month's payment, the rehabilitation process and future payments."
Needless to say, I was excited. So, I called the number earlier today only to find out that it is the number of the 3rd party collection agency. According to them, my loans will not be coming out of default because I was never in a rehabilitation program. By paying only $50 a month I didn't qualify for it.
So, I'm confused. Why would I recieve a letter that says that my loans are coming out of default and then be told that they are not?
Which one should I believe?
Does anyone know what I can expect to happen?
Around Nov. or Dec. of 08 I decided that it was time for me to go back to school and finish my degree. I had been saying that I was going to do it forever but never had the time. When I suddenly found myself unemployed and seemingly without hoping of finding another job for quite sometime, like a lot of people, I decided what a great time to head back to school.
The only problem was those damn student loans that I never took care of. I called the DOE and they gave me the number of a third party (I assume a debt collector) that I had to deal with. This third party wanted to set me up in a rehab program paying $450/month. As I said I decided to go back to school because I couldn't find a job, $450 a month was out of the question. When I told them that I was told that I could pay $50/month. I figured I could scrape together the 50 bucks a month to make this happen. I was also under the impression that if I paid this $50 a month for 9 months, my loans would come out of default. So I started maknig the payments. 50 dollars is a lot of money every month when you're out of work, but I did it.
I was very happy yesterday to recieve this letter in the mail from the US Department of Education:
"Congratulations! You are one payment away from having your defaulted direct loan(s)
Once you have made this payment in a timely manner, the U.S. Department of Education will begin the rehabilitation process for your direct loan(s). When the rehabilitation process is completed you will once again be eligible for the same benefits that were available on the loan(s) before the loan(s) defaulted. These benefits include the various deferments, forbearances, and repayment plan options explained in your promissory notyes for this loan(s).
Please call us at (888)475-67** for instructions on making this month's payment, the rehabilitation process and future payments."
Needless to say, I was excited. So, I called the number earlier today only to find out that it is the number of the 3rd party collection agency. According to them, my loans will not be coming out of default because I was never in a rehabilitation program. By paying only $50 a month I didn't qualify for it.
So, I'm confused. Why would I recieve a letter that says that my loans are coming out of default and then be told that they are not?
Which one should I believe?
Does anyone know what I can expect to happen?
Technically there is no such thing as a "rehabilitation program"
Technically there is no such thing as a "rehabilitation program". All that the higher education act requires is that you make 9 on time payments and your loan is rehabbed. You do not have to be "in" or "assigned" to a program. Obviously the DOE has recognized your payments as qualifying you for a rehab.
FYI...you became eligible for federal financial aid after you made your 6th payment.
