topic Re: FED loans in Student Loans

FED loans

Waginator — Mon, 06 May 2019 21:11:09 GMT

My student loan has been in default for a while. I make very little money and am on medicaid.

Every year or so, the D.O.E. in Texas sends me the financial disclosure form that I fill out to prove I can't pay on the student loan.

About 2 months ago, I got it again, filled it out and sent it in.

I just got a 1 page letter accusing me of never responding, so they say they're going to garnish.

There's nothing in the letter that allows for me having sent it and them not receiving it.

I'm sure they lost or misplaced it.

So besides sending it again, what else can I do?

I sent it, they lost it, not my fault.

Re: FED loans

Anonymous — Tue, 07 May 2019 04:45:12 GMT

I don't think default is the best place for your loans. If you were to rehab you could have the loans placed back on a payment plan and sounds like on REPAYE/ PAYE or IBR you would have $0 payments anyway. If there was a similar error in your annual recertification, you would have many warnings and options before it defaulted and you were subject to garnishment. There is also a much more visible paper trail for applications for annual recertification vs the paperwork with a collection agency. They could say they didn't get it but it would be very clear they did.
It's up to them to decide to garnish you as your loans are still defaulted. Im not sure but I don't believe the voluntary payments halt other collection methods. The good news is that you can easily prove the garnishment amount is not an amount than can be collected. There did have been additional paperwork on how to do this. It has a deadline although you can always petition for this same thing later.
My suggestion is to fight the garnishment, then get your loans returned to a servicer through rehabbing or default so you can have better options.
I was also wondering if you're disabled because there could be options for loan discharge there.
Hope this helps

Re: FED loans

Waginator — Tue, 07 May 2019 11:06:38 GMT

Thanks Sabii,

but this didn't help as that was not the question.

The question was:

I can't pay on the loan.

I get periodic paperwork to fill out to prove I can't pay on the loan.

I got the paperwork, I filled it out. I sent it well within the deadline.

Now they say they didn't get it, accusing me of not responding, and intend to garnish.

I sent it, they lost it, but saying I didn't send it.

There is nothing in the letter allowing for them losing my paperwork.

Other than just resending it, what else do I do.

Re: FED loans

calyx — Tue, 07 May 2019 14:43:02 GMT

@Waginator wrote:
Thanks Sabii,
but this didn't help as that was not the question.
The question was:
I can't pay on the loan.
I get periodic paperwork to fill out to prove I can't pay on the loan.
I got the paperwork, I filled it out. I sent it well within the deadline.
Now they say they didn't get it, accusing me of not responding, and intend to garnish.
I sent it, they lost it, but saying I didn't send it.
There is nothing in the letter allowing for them losing my paperwork.
Other than just resending it, what else do I do.

That's it. You resend it. I would recommend talking to them on the phone to give you time to get it back to them, but while it wasn't necessarily your fault that they didn't get it, it isn't necessarily their fault that they didn't get it, either.

Sabii is correct - if you rehab your loans (which will likely be a $0 payment) and bring them current, you just have to recertify that you don't have higher income to keep your $0 payments, and keeping the loan current would make it possible for it to be discharged after a certain number of payments. In addition, you would have a positive tradeline, which helps your credit history.

I don't know your financial/life situation, but there are also ways to get your loans discharged if you are on disability or have other extreme hardships. You might want to do some online searching/research to see if it's an option for you, and discuss it with appropriate parties (ombudsman, maybe?)

Re: FED loans

Anonymous — Tue, 07 May 2019 15:05:54 GMT

Unfortunately, being in default, there are very little protections for the loan. Yes, you sent in the paperwork. By mail? Online? Where is your proof? Because if they did get it, and they did lose it, it did be in their best interest not to admit it. Then this whole thing becomes heresy without a paper trail, and it works out really nice for them to get to possibly garnish your income.
Is the paperwork about the loan payments while in default or is it about the inability to afford the garnishment? I don't know much about default but they only paperwork I know of is to state income and expenses. To my knowledge this does not stop garnishment unless you enter into a payment agreement, such as to rehab.
Your best bet is to move on and address the garnishment. If your paperwork isn't received on time, you can still submit it after it starts. There will be a hearing where you prove inability to pay. You'll get your money back.
You'll always be this one step from a mistake and garnishment (or worse.... Federal loans have an ungodly amount of power to collect). Your social security is something they can dip into. If it's low/ no payments you are looking for my suggestion was simply to start the process to return the loans to a servicer and go on an Income-driven repayment plan. Default wasn't meant to be long-term. With your loan out of default, the protections would be reinstated and if something went wrong (which it usually does with these loans), you'd have months to fix it as a paper trail to prove it.
Anywho, if you really want to fight it you'll need to file a complaint with the student loan Ombudsman (through the gov student loans website) or file a complaint with the Consumer Financial Protection Bureau. You'll need to have digital copies of your proof to upload. These methods can both take a while.

Re: FED loans

Waginator — Wed, 08 May 2019 22:21:05 GMT

Thanks Calyx and Sabii.

Well, I did as you said, I resent it today at the post office.

When I called this morning I got a big suprise.

All I called for was to tell them that I got a letter stating that I "did not comply" and they did not get the financial disclosure form.

The rep told me that they DID receive it, but that I had to call a collection agency I had been assigned to and make a payment plan.

I tried to explain to her that there was no payment plan, there would be no plan, that's why I'm filling out this paperwork.

If they receved it 4 days after I sent it, they should just process it.

Well she kept insisting that I had to call the collection agency and make a payment plan or they were going to go ahead with the garnish.

This is not right. I am making less than I was even when this started. The procedure is that they send me the form, I fill it out,

I get a letter saying it is approved until they send me the paperwork again.

Now I'm fining out that they assigned me to some agency in 2016 or '17 and I was not informed.

I never got anything in the mail.

I'm pretty sure they're breaking the rules here.

I am NOT dealing with a collection agency.

The Dept of Ed and their collecion agencies are scum and I will not have this.

Re: FED loans

Anonymous — Thu, 09 May 2019 01:21:58 GMT

Waginator,
We agree on one thing: the Dept of Education, servicers and collection agencies are scum. However, it doesn't change that you have to do what you have to do.

Your loans are in default, and as such you lost most of your protections. The right to pay based on your income is gone. Your loan can be transferred from collection agency to collection agency. The full amount of the loan is now due. People have even lost professional licenses over this. Unlike other debt, federal student loans have the power to collect many ways, without notice (expect for garnishment with a brief notice). Now don't get me wrong, they will let you fill out these forms and make payments to chip away at the debt (rather than not getting a payment from you at all) but there is no actual agreement preventing garnishment. This is why people rehab or consolidate. It's a nightmare that you have very little control over. It's also

Please accept that it doesn't matter if they did or did not get the form. If you stand on principal, not only will you likely find out that it didn't come with the rights you though it did, you will have passed up the opportunity to object to the garnishment. On the form it has several ways that you can stop it. One of these is entering into a payment plan for a certain percentage. The payment plan would be a official agreement that would stop attempts to garnish. The other option is to simply say that due to the amount you get, you would be exempt from the garnishment either in part of fully. If you don't make the deadline, you can always do it later but it will be more of a hassle and the garnishment will have started. The collection agency could always decide to halt the garnishment on their own, but it's a big gamble to take.

To regain your right to low or no payments based on income, you'll need to rehab or consolidate the loan. If you're disabled, you might be able to get it discharged altogether.

I know this is not what you wanted to hear. I'm pretty sure this is accurate though. I can provide you with links if you need more information. you can find updated information on your student loans at the government's National Student Loan Database (NSLDS).
Good luck

Re: FED loans

scvbd99 — Sun, 12 May 2019 07:13:15 GMT

use registered mail return receipt requested whenever you use snail mail for student loan stuff

it's a little more costly, but worth it in the longrun

Re: FED loans

Waginator — Mon, 10 Jun 2019 23:12:16 GMT

Yes this time I did. But they admitted they got it. These people are not equipped to do anything other than work off of a limitied flow chart--

Handle the issue there or refer back to another entity.

Since I didn't get a letter from a collection agency, and the issue at hand is receipt of my financial disclosure paperwork, I will not discuss a collection agency in relation to the matter.

I will not deal with a collection agency. I have the right to deal with the D.O.E. only if I want.

I am poor and on medicaid.

I have the right to be informed well in advance of any considered action.

This system is disgraceful and I will not have it.

I am just a kid that wants to go to college and get an engineering degree. It's disgusting to treat a college kid this way.

Re: FED loans

Waginator — Tue, 14 May 2019 10:41:47 GMT

I have always filled out the proper paperwork.

I have been looking for a better job for a long time now.

I was exempt from garnishment before, and now that I am on medicaid, my income is even less than before!

I'm just a prospective college student seeking to get an engineering degree. I shouldn't have to deal with this harassment.

Re: FED loans

Anonymous — Mon, 10 Jun 2019 16:03:51 GMT

Default isn't a place to stay because you can't pay. At this point the entire amount is due. You are not entitled to a payment plan based on your income. If you would like to be, you need to get your loan out of default. In your situation you will likely be responsible for $0 monthly payments. If you renew your paperwork each year, which can be easily done online, you get a receipt acknowledgement by email. This payment arrangement will be binding. After 20-25 years your loans will be forgiven.
Your are not being harassed, though I understand why you would feel that way. They are just collecting the debt you owe in the legal capacity that you gave them permission to when you signed for the loan(s). You can turn in the paperwork to eliminate the garnishment based on income (if by mail, I would pay the extra money for the proof it got there). However, there is a deadline to this. If you do not meet the deadline, you will be garnished for the full amount they are allowed to.
If you would like to go back to school, in order to receive further federal aid you might be eligible for, you will need to get your loans out of default.
If you would like to have payments halted on loans while you are in school, you will need to get your loan out of default.

My advice remains the same. Turn in the paperwork to prevent the garnishment based in your income. Then get the loan out of default to prevent it from happening again and so you can go back to school.

If you would like to file a complaint about the missing paperwork, you can file one with the student loan Ombudsman or the Consumer Financial Protection Bureau. However these will take time to reach a resolution (which may not be in your favor) and will not hault any action taken against you by the collection agency while you wait.
We can point you to further information, links to paperwork, a rundown of how all this works, etc. What can we do to help you achieve your goal?

Re: FED loans

calyx — Mon, 10 Jun 2019 16:04:34 GMT

Hi Waginator,

As frustrating and wrong as this system may be, unless you are willing to legally challenge it, it's what we have to work in. I *know* your frustrations, I've been there. I'm lucky to have gotten a good paying job, but the system can still work in your favor if you work to get your protections back.

Sabii has been very kind in helping people navigate the system, so please listen to the advice there.
If/when you get your loans successfully rehabbed, you will legally have a lot of protections and options you don't have otherwise, one of which is the ability to have an income based repayment, which could reduce your payments to 0. Even with $0 payments, you would still qualify for forgiveness after years of paying $0.

I know you're frustrated, but we're here to help.

Re: FED loans

Waginator — Mon, 10 Jun 2019 16:03:18 GMT

Hi Calyx, thanks for your empathy.

For now, good news. I re-sent the financial disclosure package with a change in the cover letter and I just got a reply back that I will not be garnished.

If I can get a payment plan that has $0 payments, I might go that route.

If they insisted on referring me to the loanholder, thus breaking the rules, I would have had to consider local help or legal help.

I have no interest in further loans. I'll need scholarships or work out something directly with a school.

This is my problem:

I'm upside down with my education and loan. Most people get their education, and then have just the problem of paying off the loan.

I was pressured in going to college at 17, wasn't ready to go, was unhappy there didn't get an education, and still stuck with loans.

In the meantime I have experience in the engineering field but no degree.

I wanted to go to college later but no one will listen to me. They keep telling me I went to college. My cousin, who's a teacher, suggested getting a masters. I'm not ready for a masters, I want to go to college first, and be around kids my own age.

I need to talk to an academic advisor. I'm getting no help from my high school or the colleges I've contacted.

Re: FED loans

Anonymous — Thu, 06 Jun 2019 14:52:09 GMT

I'm good you were able to get it resolved.
Only the moderator can cut out anything from your post they find in violation.

I'm curious, you mentioned being around kids your age. What years were your loans taken out? Are you older or younger? If you are younger, I think you're definitely overlooking the loan forgiveness aspect. This is not something that will be offered with a loan in default.
Also, I think I provided a link to the repayment estimator. If you disclose your income, your total loan amount and your loan types I can give you an estimate of your monthly payments on IDR.
On the subject of an engineering degree, I know there are quite a few programs either designed to help people finish up degrees that were started (by giving maximum credit and flexible classes) or will allow you to go for a master's degree, finishing your BS along the way. If I'm not mistaken one such school might be there University of Washington (which also has an online degree program). You will if course no longer qualify for aid while you're in default. They do have scholarships opportunities. Additiinally, if you get out of default and enroll in a dual BS MS program, it night be funded using graduate loans. This is helpful if you are already over your maximum lending.
Looking forward to you sharing the information so I can help you find a permanent payment plan.

Re: FED loans

Anonymous — Sun, 09 Jun 2019 02:27:36 GMT

If you provide the information I requested, I can assist you further. If not, your original issue has been resolved thanks to Calyx and you can find further information about significantly reduced payments and loan forgiveness opportunities in accounts out of default from the information you've been provided as well as the gov student aid websites.
I do hope you take advantage of my offer or hire a professional to sit down and explain your options but either way, best of luck to you.

Re: FED loans

Waginator — Mon, 10 Jun 2019 23:56:19 GMT

My loans were taken out for me from about 1984 to 1988.

I currently make about $16,500 a year.

I don't want an online program , or work on a master's yet.

I need to go to school as a traditional student.

My nephews are going to school to become engineers, one civil one mechanical.

The civil engineer is getting a lot of help from the school. He just graduated with his masters and will work on his PHD.

Somewhere, some school should help me with my degree because of my engineering experience.

I just saw two links on the professional networking site to apply to colleges so I'll explore that for now.

Re: FED loans

Anonymous — Tue, 11 Jun 2019 17:17:57 GMT

At your income, your monthly payment will be $0 due to the fact that IBR takes into account the federal poverty level. You didn't and don't need to stay in default. You would be entitled to pay nothing on a regular plan. All you would need to do is complete your annual paperwork and you'd be good to go. Given the loan origin years involved, you may or may not not be eligible for loan forgiveness, idk. It's in the small print.
Default seems like a "safe" place but it's not. In addition to the eventual wage garnishments that will happen once you get your degree and a different job, they'll take your tax refund. Not to mention that I believe scholarships count as income, so you will have no longer be exempt from payments in default either. Will you be getting any licenses? They can take those away too.
There's one more thing that you may not be taking into account. Default can have a severe effect on any future attempts at school. The schools can refuse to release your transcripts. That "help" the school might give you would likey be in the form of a school scholarship. There's a chance you will be being ineligible for aid through the FAFSA (many school scholarships are indeed through the FAFSA now). I would also think schools would be wary to give you any other type of aid considering the aid you already have it is not in a positive state.
This can all be fixed by rehabbing or consolidating the loans. If you would like guidance on how to do this, feel free to ask. Rehabbing takes a while.
If not, you could end up stuck between a rock and a hard place when it comes to going back to school. I think it's great that you're considering finishing your education in that field though and wish you the best of luck.

Re: FED loans

Anonymous — Mon, 02 Sep 2019 08:30:30 GMT

I am so frustrated with the incompetence of my grad school loans provider, Fed Loans. Everything was fine until I needed to update my direct debit account. I updated my information twice with a representative on the phone - and now this is the third time they've charged my expired account! I don't know what to do anymore except to give up and lose my .25% interest rate reduction. It took 3 business days for a representative to respond to my email telling me what I already know - that, yes, they tried to charge my expired account again. What really angers me is that this email tells me that they are alerting credit agencies to the now, late payment - which the last representative assured me that they didn't do.

Re: FED loans

Anonymous — Mon, 02 Sep 2019 09:13:02 GMT

Oh boy, don't I know about FLS and their incompetence! The Dept of Education wrote a long report acknowledging it.... And doing absolutely nothing. Don't expect help any time soon.
My advice? Do everything online, yourself. Delete your old profile. Add the new one. Schedule payments 3 days before the due date at least. Then screenshot. Save every email, log every call if you need to make one. That way you'll have a detailed narrative with proof for a Consumer Financial Protection Bureau complaint. It's the only thing that's helped me at times.
Never trust the person on the phone will do what they say they will do. Your best bet it talking with the account specialist. Never email them anything important or anything you want an answer to. I've literally gotten 3 different answers when I asked if my interest rate was fixed.
Unfortunately, the late is technically yours. You didn't pay them on time. With FLS I tend to plan every action 3+ months ahead... Because they often can and will mess it up.
Pay the bill now. Then worry about next month. I personally say forget the savings. I set up my payments manually months in advance. A 30 day late will wear off. Or you could try a CFPB complaint to try to get FLS to remove it. But to be honest, if you're new to REPAY, your interest on your subsidized loans is paid by the government. And half of Unsubsidized loans. Good luck.

Re: FED loans

calyx — Tue, 03 Sep 2019 00:01:26 GMT

+1 from above.

I had the same issue with my servicer when I first started (only it wasn't an expired account, they just weren't pulling payments from the existing account I'd authorized), so I started using my bank's billpay to send to them. I did lose that .25% at first, but it finally got sorted. I kept enough cushion in in my account until I knew the system had sorted out in case there was a double payment.

(And yes, the CSR said they knew about the issue, that it was on their end, and yet, of course it was my responsibility to deal with this issue without them sharing that info... /sigh)