Defaulted on my rehab yrs ago, HELPPPP!!!!

[Anonymous]

‎03-08-2016 02:06 AM

Years ago back in 2010 or 2011, I signed an agreement and entered into a loan rehab primarily to go back to school. The student loans were from circa 2006, early 2007 when I attempted to go to an online school, but stopped after I realized that the online school was a setup for failure. However, I defaulted by never making a payment while I was in rehab. (HORRIBLE, i know 😢😢😢). This failed attempt to rehad my student loan was only for about $5K, which my total debt now is $8K. I was young and dumb and didnt realize the true importance of credit, but now I'm trying to remedy all of my past mistakes. Please help me with advice on what I can do.

My low income and family size qualifies me for IBR plans at $0! I also work in public service and could get them forgiven after 10 yrs possibly. Most IBR plans I read about wants the debt to be after 10/2007 and mine is just before that timeframe. I want to tackle this now, but my income does not support me paying it off. Trying to qualify for a mortgage next year amd this is the last of my credit repair issues I've tackled.

I know rehab is a one shot thing (wish I would have understood that then.) I havent reached out to them since I failed to make the pymts under rehab. So now what are my options? Im ready to call them, I just need a plan. All positive help would be greatly appreciated Thanks in advance. 

[Anonymous]

Any and all help would be greatly appreciated! 

[RonM21]

All I can think of is contacting them to see what you can do to settle the debt. It's possible you may even be able to work out something with them to where they'll eventually delete it. But, the sooner, the better.

[SCF]

Even though this loan is no longer eligible for rehab, you can still consolidate it to bring it out of default.  The consolidation loan will appear as a new tradeline on your credit report, and there will be no changes to how the old loan or any related collection accounts are reporting.  With your consolidation, you'll be able to choose an income driven repayment plan, and qualify for PSLF.

Contact the collection agency that currently holds the loan and let them know you want to get out of default by consolidating the loan.  Also tell them that you want to qualify for Public Service Loan Forgiveness - Fedloan Servicing is the central handler for PSLF, so they'll want to submit your consolidation application to them.