Need some advice about paying off student loan from NCO financial

[Anonymous]

Hello, my girlfriend has been trying hard to pay off her student loan she defaulted on a few years back. She just been paying off what she can at this time at about $50 a week, because she wants to go back to school and get financial aid FASFA, which she can do while shes making these payment (or she has been told) . But it seems the interest is greater than the payment she is making and its not making any dent in the overall balance.

I thought that once you start to pay off a defaulted loan the interest stops? or is there any way to settle w/ NCO to allow her to pay off the principal not just their added interest?

any help would be appreciated, thanks.

[llecs]

I know very little about SLs and maybe there are special rules when repaying SLs, but I'll post on the assumption that the debt is like any other debt. I take it that this is a private loan?

With any typical debt, like loans, the interest can continue to accrue while paying it off. The exception would be if she agreed to something otherwise. I'd have her look at the agreement. But virtually all debts out there will continue to accrue interest even while in repayment.

I'm sure NCO can be settled with. Ideally, get 100% saved up before making any settlement offer and offer less in the settlement (50%, 60%, whatever). You wouldn't want to offer 60%, for example, and have them reject it and sue for the full balance instead. If you have it saved up, then you can have a little more leverage and breathing room.