Step #1 - getting right with the SL folks

[Anonymous]

Hello, everyone! I've been lurking for some time, and finally have a question that I wasn't able to find anywhere. This is probably really basic, so forgive my ignorance.

I'm at the start of what looks to be a long process of cleaning up my credit. First step was to tackle my defaulted student loans. I have four Direct Stafford loans from '05 and '06 that I am five months into rehabbing....so far so good.

I also received a letter last week informing me that a CA had taken over collection of a remaining Perkins loan. I checked the NSLDS website, and found that this does indeed look to be a legitimate loan. (I toyed with DV-ing, as I honestly didn't remember it, but seems like that would be useless in light of the NSLDS information.) I'm planning to call and see about possibly rehabbing this loan too; it's fairly small so I might be able to make payments and shoehorn those into the budget somehow.

My question is this: my tax return was offset for my defaulted student loans, as the rehab period happened about the same time I filed. I'm totally fine with that, but I would like to know which loan the tax return was applied to. I don't see anything that would indicate that information on the NSLDS website. How would I go about finding out where the money was applied? And are Perkins loans different somehow than the Stafford loans? Is that why they weren't lumped together?

Thanks for any help you might be able to provide. These forums have been a wealth of information so far. I'm really glad I stumbled in!

[laz98]

Welcome to the forums! 

I don't know much about Perkins loans, except to say that yes, they are different from Stafford loans, so no, I don't think they would be lumped together.

You didn't get any kind of paperwork concerning your tax offset?  Perhaps saying you still owe $XXX?

[Anonymous]

No. I've just finalized a divorce, and it was a joint return that was offset. All mail is going to the ex's house, and he's not good with keeping me informed. I thought about perhaps trying to call the IRS, but that automated system is often daunting. The Stafford loans are about $10k, so if the offset ($2500) is applied, I'll just figure that in to the total owed and call it a day. But if they apply it to the Perkins ($1500) that would take care of it almost completely, thus making my payment arrangement unnecessary.

Have advised ex that he can file Injured Spouse to get his half the return back, and I know from hanging out on another legal forum that generally the IRS hangs on to the offset for a while in case someone does file that form. But I don't know what the risks are of letting the Perkins folks hang on waiting.

[Anonymous]

Just for the benefit of anyone reading this who needs to figure out an offset and which SL it's going to go to:

The US Dept of Treasury has a branch called Financial Management Services, that operates the payment processing for the offset program. I called and they were very helpful! Turns out the offset is headed to my Stafford loans rather than the Perkins. Which is fine - the Stafford is about $15k, so there's still a lot to pay.

Yesterday I called the CA handling the Perkins to ask about rehabbing. I'm making some fairly large rehab payments on the four Stafford loans, so my concern is that if they hit me with a high payment requirement for this latest one it could get unmanageable fast. The agent tried to bring up a consolidation loan w/a private lender, but honestly I'm not thrilled about that idea. I told him I really wanted to rehabilitate, I wanted to make sure the payments were at a level so that I could meet my obligations, and he's going to take my payment plan back to the university to make sure they're on board. (Apparently they have to agree....not sure if this is true, but okay. I can wait and see.)

Something I wish I'd done differently (besides not getting this behind in the first place) is to check the NSLDS website when I started rehabbing my Staffords. I didn't realize that not all my SLs were included in the arrangements I made. The remaining loan is only 2k, so it's not so bad. But if I'd known that there would be another rehab coming I'd have planned a bit better in terms of the budgeting. Ignorance is not always bliss.

[Anonymous]

Just a quick update - last rehab payment was made Friday! Wa-hoo! Am waiting for it to update to the DOE, at which time I can request to "decertify for tax intercept" for next year. So I'll be off the tax intercept list, and that is awesome....

One weird thing, though. Payment went in to the CA on Friday, and Monday I got a letter from the DOE asking me to start payments on my defaulted student loan. I thought "Well, it can't have been picked up that fast" so I called the DOE. They were nice, said to disregard the letter as it was likely an auto-generated thing. Then they said that if the loan isn't picked up by Mid-October, I'd probably need to make a payment so there was no month in which nothing happened...okay. But the CA is saying I should make that post-rehab-until-the-loan-is-picked-up payment to them, and DOE is saying I should make it through them. To whom should I direct this phantom payment, do you suppose?

[SCF]

Based on what I've read from others here, you should continue making (or expecting the CA to automatically debit) your payment to the CA.  Until your loan is picked up, they hold the debt, and you should pay them to maintain your good payment history until the transfer is complete.

It would be especially hard to pay the DOE without an account number and statement anyway...

[Anonymous]

---

@SCF wrote:

Based on what I've read from others here, you should continue making (or expecting the CA to automatically debit) your payment to the CA.  Until your loan is picked up, they hold the debt, and you should pay them to maintain your good payment history until the transfer is complete.

It would be especially hard to pay the DOE without an account number and statement anyway...

---

That's what they sent me on Monday.

[Anonymous]

Frustration has set in.

Ninth payment posted to the Defaut Resolution Group's website last night. I was told by the DOE on Tuesday that I should call back and "request to decertify from the tax offset list", as my ninth payment would mean that I could be removed.

Today I get told that I can't make that request until the loan is picked back up. I still have a few months before I'll be filing anyway, but couldn't we get a 48 hour period wherein I could get matching information??

Yeesh.