So, I am starting loan rehab (already made first payment), I got this letter today that states:
(I shortened some of it, but the important stuff is here - ask if you need more info)
Background info: Guarantor is Missouri Dept of Higher Education, placed w/ NCO Financial for collection purposes, but it was not purchased by them (still owned by guarantor), 2 loans totaling $2375 and $1703.
Dear SydLo,
This is an attempt to collect a debt. Any info will be used for that purpose. Ths is a communication from a debt collector. Your account balance may be periodically increased due to the addition of accrued interest or other charges as provided in your agreement w/ the original creditor or otherwise provided by state law.
A recent review of your defaulted student loan account(s) held by MISSOURI DPT OF HIGHER ED. indicates that you have agreed to the payment amount listed above and may be eligible to participate in the Rehabilitation Program.
Defaulted borrowers who have met the requirements set by the US DPT OF ED of making 9 consecutive and on time monthly payments that are satisfactory to the guarantor are eligible for loan rehab. Failure to make consecutive monthly payments for a mutually agreed upon amount will temporarily disqualify you from eligibility.
After you have made the required payments, MISSOURI DEPT OF HIGHER ED. will sell your loans to a participating lender/servicer who will establish a new repayment schedule fo ryour loan(s). Your payment may increase or decrease according to the new schedule. Collection costs of 18.5% will be capitalized to the outstanding principal and interest loan balance. The sale usually takes between 30-60 days to process. You must continue to make on time monthly payments as agreed upon until you are notified your loan(s) has been purchased by a lendor.
Once your loan(s) is sold to the lender/servicer, you wil no longer be considered in default. As a result, all derogatory info reported by MISSOURI DPT OF HIGHER ED. to the national credit bureaus will be deleted and you will be eligible to receive additional title iv funds providing you have no other defaulted student loans.
Your signature below acknowledges your request to participate in the rehab program and authorizes the guarantor to capitalize collection costs of 18.5%. Do no hesitate to contact us at ###### if you have any questions.
Then it goes on to ask for my signature/date/social...etc. to be mailed back in...
My concerns are:
1) 18.5% (can they do that???). That would be an insane amount of money for a 10 month program ($581 for loan #1 and $416 for loan #2).
2) I don't want to sign anything w/ NCO, as they are a collection agency (regardless of who they are collecting for), nor do I want to give them my SS#.
3) and I don't like the statement in paragraph 2 ("MAY" be eligible to participate in the rehab program), as I was under the impression that by taking my information they had already qualified me for loan rehab (so they said over the phone, "yep you qualify").
Help? Any advice/opinions...etc.?
Thanks so much!
