Gate Loan Default

[bxthoroughbred]

Is there anyone out there that has experience with private SL for example the Gate Student Loan. I took out appx. 19k when I was in college. I left school and they gave me a hard time getting a def. or forb. I ended up in default while my U.S. Dept. of Ed. and Sallie Mae loans worked with me and they are in good standing. Now I just recieved court papers. I'm freaking out! My credit is in the tank so I don't qualify for any kind of loan to cover it. HELP! My scores range from 504-550.

[Anonymous]

Were your loans sold to a collection agency or can you find out if the original creditor still owns them?  If your original creditor still owns them, I would suggest sucking it up and calling them to see if you qualify for loan rehabilitation.  Sometimes the private student lenders will work with people to rehab their loans.  I am not exactly sure how that works, but it would be worth looking into.  Otherwise, I guess you could negotiate with the collection agency and perhaps only pay a percentage of the loan back, making sure they remove all bad marks off your credit if you do so.  Being that it is a larger amount, perhaps they would be willing to work out a payment plan.  But I would defintely go back to the original lender to see if you qualify for loan rehabilitation.

[bxthoroughbred]

Actually it has been sold a couple of times. Now I am being taken to court and I will have to deal with this through the court system. I will update later. Thanks!

[LynnInMN]

Gate Loans  are alternative loans.  From my  knowledge of  they they  are administered by the school,  so schools had a vest interest in these loans not defaulting.  From the website...

The First Marblehead Corporation serves as the program manager of the GATE Education Loan Program, helping educational institutions design and implement this innovative alternative loan program.

Bank of America, N.A. is the lender for the program, providing a stable, trusted source of funding for GATE Education Loans.

American Education Services provides the loan servicing and your customer support for GATE Education Loans.

Alternative and  private  loans  do  not  have  to  offer  deferments  or  forebearances,  nor  are they  sold  to  CA's....student  loans  in general are NEVER sold to  third parties.  They  are too  collectable to give up.

Plus  there is no such thing as rehab for private or  alternative loans.   Rehab  is only a  function of  FFELP  and DOE loans  only.

[bxthoroughbred]

wow...I'm actually just reading this now. I'm still dealing with this issue. So these loans are never sold. OK so does that mean I can still go back to these guys and make an offer?

[LynnInMN]

As a general rule no.  CA's are hired third party under contract and you must work thru CA.