topic Re: Default loans + rehab in progress in Student Loans

Default loans + rehab in progress

Anonymous — Sat, 07 Sep 2019 20:08:05 GMT

I'll try and provide as much as I can, I am aware that I made a lot of mistakes a long the way but the point is that I'm trying to fix it no matter the cost or the time it takes.

So I took out a total of 9 loans (that's what it says) from 2011 to 2013, all 9 are Direct Stafford Loans (6 were unsubsidized and 3 were subsidized). All in all the total came out to $22,330 (as of today that balance is $28,598 = $1,921 in interests and $4,346 in fees & costs). My loans fell into repayment and forbearance about 4 times each before they all fell under "Defaulted, unresolved" as of 2017. I got a letter from the U.S. Department of the Treasury in 2019 that my tax return was applied to my debt (the amount was a little over $1,000, at this point no attempt to garnish from my wages was made but I suspect that was step #2). By June of 2019 I finally got in contact of the collection agency that was now trying to collect from me and I was placed into a loan rehabilitation program and have so far made 4 out of the 9 monthly payments (I'm counting 4 because it's on auto-pay to a card that I deposit money to specifically for this so I take no money out from it).

I was checking my credit score and it went up by 20+ points (I took out a credit card and am paying the full amount instead of the minimum amount and opened up a new account where I'm paying a minimum for a total of $500+ borrowed which I intend to pay in full by December).

But then I saw that it said that my Payment History Changed that says that one of my 2015 payment status for one of my stuent loans was updated from 180 days late to 120 days late, what does this mean? I also had 9 derogatory marks before I did all this (the loan rehab) but now I can't see them on my report, why is that?

And it says I have 10 accounts (not 9) but the 10th says that the balance is $0 (under USDOE/GLELSI). I made payments to this one a while back but now on NSLDS it says it was "DEFAULTED, SIX CONSECUTIVE PAYMENTS, THEN MISSED PAYMENT(S)".

If I'm making payments through a rehab program, will my tax return for 2019 also be taken? (I don't mind if it's put towards the loan at this point, anything helps). What happens after the 9 payments are made? Can someone who has completed the process tell me how it goes? What red flags should I look out for?

What mistakes am I still making? how can I improve my situation? what else can I do?

Re: Default loans + rehab in progress

calyx — Mon, 09 Sep 2019 19:35:14 GMT

I've rehabbed in the past.

Your 2019 tax return will not be taken (assuming you complete rehab).

When you are done paying your 9 payments, your loan will be assigned/picked up (verbiage may differ, end result is the same) by a student loan servicer who should contact you to set up payment/account information.

Please make sure you stay on top of who has your loan. A not-insignificant number of borrowers re-default because they don't get notification from their (new) servicer and I would really hate for that to happen to you. When you talk to your new servicer, you should be able to set up whatever payment plan you need (if you're doing any kind of forgiveness program, this will be important - @Sabii knows that information better than I) and get your account all set up and ready to go. Most servicers offer a modest APR reduction if you do an automatic payment plan.

As far as your credit reports: after your rehab is done, the default will be removed from your credit report. Some servicers remove lates, some do not. Please note that it is not required that they remove any negative information other than your default, so if the lates stay, don't think something went wrong. Student loan servicers also take a really long time to update their accounts with the CRAs (mine took more than 4 months), so you might have to sit tight and wait a bit to see how everything shakes out. If the servicer does not remove lates, you are more than welcome to try to write goodwill letters to get them removed. It rarely works, but it can, so you'll have to decide if you want to pursue that route, or just let your lates age off.

I'm not sure what is going on with that one changing lates, but while I was going through my consolidation (another process altogether), my loan reporting shifted all kinds of ways and since it wasn't doing any damage, I just ignored it until everything was done.

Can you give more information about where you're seeing that mystery 10th loan from? Is it on just one of the CRA reports or all of them? I had really inconsistent reporting between my CRAs (they were all actually wildly different) with my student loans, but eventually they did all shake out. Have you downloaded your student loan information from NSLDS? You'll want to keep an eye on it from there, it's your most official record.

Re: Default loans + rehab in progress

Anonymous — Mon, 09 Sep 2019 18:02:51 GMT

The mistakes you've made are no different than many students. We've all been there. What sets you apart is your willingness to fix your situation. 🙂

Sounds like you've already good a plan. Rehab was a great decision and once you're finished and everything settles you'll be back on track. Keep in mind that you can rehab only once and to compete the rehab you just make all 9 payments on time. It helps to set these up too come out a few days early. Also (at the risk of sounding paranoid), trust no one. Keep a record of who you talk to, bills, statement, letters, any paperwork, etc. It's always wise to keep track of this stuff with student loans, especially after a default.
I don't know where the 10th loan is coming from but if the NSLDS says you have it you may have it. Check to see if it wasn't sent to another collection agency or if it's not just combined into one of the 9 existing loans by doing the math(I've seen them do both).
The lates change sounds like a gift horse but it won't really matter until you finish rehab and everything settles on your report.
Once you're done with rehab, and you're going to be picked up by a servicer again, you'll need to pick a payment plan. IDR (income-driven repayment) plans are usually the best plan and leads to forgiveness in 20/25 years. Your payments can be as low as $0 and there may be an interest subsidy if you pick the REPAYE or IBR (income based repayment) plan. In addition, if you've been making payments on those plans before default you already have qualifying payments.
Do you have any questions?

Re: Default loans + rehab in progress

calyx — Mon, 09 Sep 2019 19:37:58 GMT

@Anonymous wrote:
The mistakes you've made are no different than many students. We've all been there. What sets you apart is your willingness to fix your situation. 🙂

Sounds like you've already good a plan. Rehab was a great decision and once you're finished and everything settles you'll be back on track. Keep in mind that you can rehab only once and to compete the rehab you just make all 9 payments on time. It helps to set these up too come out a few days early. Also (at the risk of sounding paranoid), trust no one. Keep a record of who you talk to, bills, statement, letters, any paperwork, etc. It's always wise to keep track of this stuff with student loans, especially after a default.
I don't know where the 10th loan is coming from but if the NSLDS says you have it you may have it. Check to see if it wasn't sent to another collection agency or if it's not just combined into one of the 9 existing loans by doing the math(I've seen them do both).
The lates change sounds like a gift horse but it won't really matter until you finish rehab and everything settles on your report.
Once you're done with rehab, and you're going to be picked up by a servicer again, you'll need to pick a payment plan. IDR (income-driven repayment) plans are usually the best plan and leads to forgiveness in 20/25 years. Your payments can be as low as $0 and there may be an interest subsidy if you pick the REPAYE or IBR (income based repayment) plan. In addition, if you've been making payments on those plans before default you already have qualifying payments.
Do you have any questions?

I meant to mention what Sabii said above - Keep a log/file of notes of who you talked to and when. I've done the same thing and it can be very, very helpful.

Re: Default loans + rehab in progress

Anonymous — Tue, 10 Sep 2019 04:20:09 GMT

(New account, forgot my password of my other one so I can't access it)

By the time I file my 2019 taxes I'll be on my 7th out of 9th payment, so I'm guessing my tax return will be garnished towards my loans right?

The 10th one is as follows:

US DEPT OF ED/GLELSIAccount status: Closed

Date opened: Oct 1, 2011

Account type: Education Loan

Balance: $0

Loan Amount:$19,787

Payment Status: Account transferred to another office (At least 120 days or more than four payments past due)

Updated: Dec 1, 2017

I looked at what's listed on NSLDS and from debt collection bills I've received and there's only 9 listed on there. So why would it list a 10th? I matched up all 9 other loans to those 9 accounts, I'm not missing any on there. All CRA report the same thing, a 10th account (closed) with $0 balance.

Re: Default loans + rehab in progress

Anonymous — Tue, 10 Sep 2019 04:39:18 GMT

The 10th loan's information:

US DEPT OF ED/GLELSI

Account status: Closed

Date opened: Oct 1, 2011

Account type: Education Loan

Balance: $0

Loan Amount:$19,787

Payment Status: Account transferred to another office (At least 120 days or more than four payments past due)

Updated: Dec 1, 2017

I think this might be a mistake (it appears the same on all CRAs), the most in loans I've taken was originally almost $4,000. I think it's a combination of all the loans or something else. But the total amount on the NSLDS page says $22,330. (Amount as of Sept 2019 is $28,547.15)

1 DIRECT STAFFORD UNSUBSIDIZED | Defaulted | $1,593 | 01/16/2013 | $1,593 | $0 | $1,862 | $250 (5)
2 DIRECT STAFFORD UNSUBSIDIZED Defaulted | $1,330 | 01/16/2013 | $1,330 | $0 | $1,577 | $212 (9)
3 DIRECT STAFFORD UNSUBSIDIZED Defaulted | $670 | 01/16/2013 | $670 | $0 | $795 | $107 (7)
4 DIRECT STAFFORD SUBSIDIZED Defaulted | $4,500 | 01/16/2013 | $4,500 | $0 | $4,795 | $205 (1)
5 DIRECT STAFFORD UNSUBSIDIZED Defaulted | $1,554 | 05/09/2012 | $1,554 | $0 | $1,921 | $257 (6)
6 DIRECT STAFFORD SUBSIDIZED Defaulted | $3,500 | 05/09/2012 | $3,500 | $0 | $3,687 | $157 (3)
7 DIRECT STAFFORD UNSUBSIDIZED Defaulted | $1,140 | 01/11/2012 | $1,140 | $0 | $1,444 | $193 (8)
8 DIRECT STAFFORD UNSUBSIDIZED Defaulted | $2,000 | 10/08/2011 | $2,000 | $0 | $2,562 | $343 (4)
9 DIRECT STAFFORD SUBSIDIZED Defaulted | $3,500 | 10/08/2011 | $3,500 | $0 | $3,687 | $157 (2)

** Last number in brackets () corresponds to the number it's listed under 'accounts' on all CRA.

I have a question about IDR. If let's say I made a payment of $200 a month for 12 years, during that time will interest/fees go up by a lot? Also, what if within that time I decide I want to pay something like $1,000 on one of those months, would they allow me to do that? And what if I have like $3,000 left to pay and decide to pay it all at once, will they allow me to do that?

Re: Default loans + rehab in progress

calyx — Tue, 10 Sep 2019 16:27:25 GMT

@Anonymous wrote:
(New account, forgot my password of my other one so I can't access it)

By the time I file my 2019 taxes I'll be on my 7th out of 9th payment, so I'm guessing my tax return will be garnished towards my loans right?

The 10th one is as follows:

US DEPT OF ED/GLELSIAccount status: Closed
Date opened: Oct 1, 2011
Account type: Education Loan
Balance: $0
Loan Amount:$19,787
Payment Status: Account transferred to another office (At least 120 days or more than four payments past due)
Updated: Dec 1, 2017

I looked at what's listed on NSLDS and from debt collection bills I've received and there's only 9 listed on there. So why would it list a 10th? I matched up all 9 other loans to those 9 accounts, I'm not missing any on there. All CRA report the same thing, a 10th account (closed) with $0 balance.

As far as your tax return, you'll have to ask the servicer. Mine was not, however, I believe it's up to the servicer. If you are concerned, you could always have your tax return "applied" towards next year's taxes. It's a heckuva interest free loan for the government, but it gives you a year (although if they take it, that's more money applied to your loan now and reduced interest for you down the road).

As far as your 10th loan - like your subsequent post mentions, it might be that Great Lakes lumped them together for their collection reporting purposes. I would be curious to know if they will delete it after your rehab. And remember that interest and fees have been added to your loans, so it may have been that amount in 2017 when it was defaulted.

Great Lakes is one of the few servicers who seems to be more amenable to goodwill deletions, so if they don't automatically delete, I would see if they would be willing to do so with a goodwill afterwards (for what it's worth, my servicer deleted my entire delinquent loan tradeline after I got everything sorted out, with a very humble goodwill request that only ask they delete it from one CRA who was reporting it all wrong).

(added in the quote above from your next post because I didn't want to clutter the thread too much)

How much your interest will go up will just depend on your interest rate, total amount owed, and how much your payment is. Because of my income and family situation, my ICR payment is actually more than my interest, so I would be knocking down my principle by a little. BECAUSE your loan is no longer in default, you should not be accruing more fees, which will help you a lot (even if your payment is 0).

If you want to pay more, they WILL allow you to do it. How the servicer handles it is up to them. I pay more than the minimum on my loans every month, plus when I get a small windfall I split it 50/50 with my savings and SLs (I recently threw $1000 at them because I got a deposit back, and my servicer allows one time payments on their payment portal - I already have a monthly set up). They generally pay off the interest owed first, and then will pay any extra towards the principle.

It'll look something like this (ymmv, different servicers, etc...) - but you can see I'd accrued ~$10 in interest that they paid first and then the rest went to the principle (simple interest, daily accrual, I only have two loans -kinda-) :

In my case, it is *also* pushing my payment out (so I'm paying down principle, plus paying 'ahead' on my loan). Your servicer should have that information on their website (how they handle extra payments), but I would also contact them to be sure (in my case the website and CSR said the same thing)

Sorry if that's too much info, but I was so confused when I started the whole thing, I just want to tell everyone everything

Re: Default loans + rehab in progress

Anonymous — Tue, 10 Sep 2019 16:35:04 GMT

You said you're 4 payments in to your payments... That means you'll be ~8 payments in by the end of 2019. I think you're overthinking the tax thing. You need to file to get your return, right?.... Just don't file until closer to April.

From your loan amount and the amount you're talking about in payments, I'm guessing your income does not support you getting anything forgiven. In that case, the lower minimum payment is nice... But it's just too give you breathing room. You should actually make the payment that you can afford because the interest may not capitalize, but you'll still be paying it and you won't likely benefit from the interest subsidy (when the government pays for all or a portion of your interest not covered by your payments).
Here is the payment estimator so you can determine what your payments will likely be:
https://studentloans.gov/myDirectLoan/repaymentEstimator.action
And here is a student loan repayment calculator to help you see how adjusting payments will affect the total amount you'll pay on the loan:
http://www.finaid.org/calculators/loanpayments.phtml
You can pay off any of the loans at any time, so far as you also meet the minimum payment good the rest (Each minimum payment is applied to the individual loans in an certain way)
Hope this helps.

Re: Default loans + rehab in progress

Anonymous — Wed, 11 Sep 2019 00:54:21 GMT

I was asking about my tax return because I didn't know what would happen when I file in December 2019/January 2020. I'm honestly not even worried about that money, if they put it towards the interest (or the loan) it's less for me to deal with. (Reply to @Sabii too)

When I get picked up by a new servicer, do I file on my 2020 taxes that I'm paying for my student loans?

I'm sorta getting an idea of what's going on now, it was a little too much at the beginning because I honestly didn't know how deep this went and for how long I let this get out of control. Thank you for replying.

Re: Default loans + rehab in progress

Anonymous — Wed, 11 Sep 2019 02:20:05 GMT

I understand, and I don't know either. But since you will have a payment it two left after the new year, my suggestion is similar don't file when you normally would. You have until April, so just file after it's out of default. They definitely can't take anything then.
If your refund was offset by filing earlier, I don't know how it would be applied. Calyx can answer better. I'm just a bit of a control freak with my loans now and I'd personally put the tax refund to the loans myself after it's given back to a servicer.

Something to think about a ways down the road would be to find out of their numbers are correct. You can make a spreadsheet to fill in APR each month, balance, interest and see if it all adds up correctly. It's time-consuming but in the end there's likely a mistake somewhere and it will save you a little money.
I think what you're doing is courageous and responsible. Keep up what your doing and everything should fall into place.
Let us know if there's anything else you ever need help with. 🙂

Re: Default loans + rehab in progress

calyx — Wed, 11 Sep 2019 04:03:40 GMT

Is there a reason you file so early?

The average person files later because we need time to get all of our documents (W2s, 1099s, etc). I pretty much file before everyone else I know, and that's in February (my financial institutions get their forms to me quickly, my workplace gets me my W2 the day after payday, and I have a pretty simple tax return).

The only document you'll need to worry about for your student loan will likely be your 1098-E, which is for your student loan interest deduction.

Even when I defaulted, I received one, so as long as you qualify you'll get it. Once you are no longer in default, it might be easier to get it from your servicer (mine was available for download pretty quickly).

Re: Default loans + rehab in progress

Anonymous — Fri, 13 Sep 2019 01:33:05 GMT

Okay, so what I've gathered so far:

1. File taxes after my 9th payment (February 2020) and I have until April to do it.
2. Keep track and documentation of everything from start to finish.
3. Keep tabs on when I who my new servicer is.
4. Once I'm no longer defaulted, ask for a 1098-E from my servicer.

I usually file my taxes around the first week of January. My question is, if I file my taxes in say March, when does the count on my income stop? It just stops on my last pay of December? (I'm asking because if I make "too much" my medical insurance will go up and that's more expenses I have to think about). That's also another issue with filing early, I have until December 2019 to renew my medical insurance, what would I be putting as my income if I were to file in March? I think I'm going to speak to my insurance about this one, I'm sure I'll figure it out.

I used the repayment calculator, if I make the same amount (with a 5 % interest) the options for "Standard" is $257 / mo. for 120 months for a total of $30,889. My current "balance" is $ 24,248, even though bills in the mail say its $28,000 (about that amount). For what I earn $257 eats a lot out of my pay, I pay something like $300-$350 in bills and my job is not steady so I could be working 86 hours two weeks and 70 hours the next two weeks. Sometimes I'm working only 40 or 60 hours in two weeks total. I'm currently in the process of leaving my current job (doing a part time job) and just saving up for next year to still be able to make payments.

I have a question though, if I have "9" accounts and I'm paying say $257 a month, is the $257 being put towards all 9 accounts? Wouldn't it be better to consolidate them into one loan? Or is that too much for a loan of $20,000+? When should I consider consolidating or can I even do that if the amount gets smaller?

I also ordered out all my loans (not including the full account numbers) to get a better idea of where I'm at:

Image: https://imgur.com/xl8PB60

Re: Default loans + rehab in progress

Anonymous — Fri, 13 Sep 2019 10:08:47 GMT

Yes, great list. I would also add to do some research in the coming months so you'll know what plan you need to be on. I think I gave you a link to the repayment estimator.

Thank you for asking questions about things you're not sure of. When you file your taxes in 2020, they will be for the year 2019. They give you a large window to do so. It doesn't change the period the taxes are for though. Sometimes I do mine in January, sometimes I'm lazy and do them in April. It doesn't change anything other than when I get my refund. As far as the insurance, they are asking for a previous tax year; nobody has filed taxes yet. Nothing changes in how you do that. The form you get from your insurance for 2019 tax purposes will just be filed later. (I'm not 100% sure what you're question is). One thing to think about is some health insurance has the ability to change plans/ update anytime with a change in employment (such as with Covered California).

I strongly recommend against the standard repayment plan. I believe this leads many borrowers into default a first and second time. Keep in mind, all these payment plans are about the *minimum* payment that will be required. You do not need to be on a high minimum payment plan to make larger payments. However you definitely need to be on a lower minimum payment plan like IDR plans if you maybe cannot afford that minimum payment. The standard repayment plan also has no forgiveness. You never know what might happen when you might need to qualify.
My suggestion is pick an IDR plan with a low payment. Pay what you can afford to pay, or at this time just pay the minimum and later when you're set in a new job you can pay more. The great thing with IDR plans, you can recertify early. So when you leave your job, you'll have no income. You'll recertify early, and have $0 minimum payments for the next year. On REPAYE and IBR the government will pick up all or part of the interest! (I can give you the details on that if you want). This will give you some breathing space. Or you can make payments, but now they will be flexible to what you can pay.
I think consolidation is rarely necessary, and often makes things worse. It's pushed by servicer's to make them make unnecessary changes. If you read the narratives on the failed PSLF applications, they pushed consolidation on PSLF people, knowing it would reset their Forgiveness payment counts. They are not looking out for you.
All you need to do is call up your servicer and ask them to group your loans. They might already be grouped. Then when you make a payment, it's actually the total of the minimum payments for each loan rolled into one amount. You're welcome to pay extra and even target the extra to certain loans. Consolidation will give you a brand new tradeline at 100% on your credit report and close out the older loans that are helping your file age nicely. After 10 years they'll age off. This is why people pay off student loans steadily but not at once when they can; it pushes back their oldest tradelines falling off. When the amount gets smaller, if you consolidate you'll go from multiple loans with reduced utilization to a loan with 100% utilization.
Hope this helps.

Re: Default loans + rehab in progress

Anonymous — Mon, 17 Feb 2020 18:04:08 GMT

UPDATE: I've been picked up by Nelnet as of February 2020. I received a letter in the mail and created an account with them. On my credit history all the "delinquent" accounts have been removed and readded under Nelnet (there used to be 10 closed accounts, now 9 of them were added back on). Here is a screenshot of all the accounts. There are 9 accounts on my profile.

Group: A
Due Date: 03/22/2020
Fees: $0.00
Status: REPAYMENT
Interest Rate: 3.400%
Accrued Interest: $239.76
Last Payment Received:
Outstanding Balance: $5,034.94
Principal Balance: $4,795.18

Due Date: 03/22/2020
Loan Status: REPAYMENT
Loan Type: DIRECT SUB
Interest Subsidy: Subsidized
Original Loan Amount: $4,500.00
Interest Rate: 3.400%
Accrued Interest: $239.76
Capitalized Interest: $456.20
School Name: xxxxxxx
Lender Name: DIRECT LOANS
Principal Balance: $4,795.18
Convert to Repayment: 11/24/2013
Disbursements: $4,500.00 on 02/14/2013

Group: B
Due Date: 03/22/2020
Fees: $0.00
Status: REPAYMENT
Interest Rate: 3.400%
Accrued Interest: $183.86
Last Payment Received:
Outstanding Balance: $3,870.87
Principal Balance: $3,687.01

Loan: 2

Due Date: 03/22/2020
Loan Status: REPAYMENT
Loan Type: DIRECT SUB
Interest Subsidy: Subsidized
Original Loan Amount: $3,500.00
Interest Rate: 3.400%
Accrued Interest: $183.86
Capitalized Interest: $292.21
School Name: xxxxxxx
Lender Name: DIRECT LOANS
Principal Balance: $3,687.01
Convert to Repayment: 11/24/2013
Disbursements: $3,500.00 on 05/09/2012

Group: C
Due Date: 03/22/2020
Fees: $0.00
Status: REPAYMENT
Interest Rate: 3.400%
Accrued Interest: $183.86
Last Payment Received:
Outstanding Balance: $3,870.87
Principal Balance: $3,687.01

Loan: 3
Due Date: 03/22/2020
Loan Status: REPAYMENT
Loan Type: DIRECT SUB
Interest Subsidy: Subsidized
Original Loan Amount: $3,500.00
Interest Rate: 3.400%
Accrued Interest: $183.86
Capitalized Interest: $292.21
School Name: xxxxxxx
Lender Name: DIRECT LOANS
Principal Balance: $3,687.01
Convert to Repayment: 11/24/2013
Disbursements: $3,500.00 on 10/08/2011

Group: D
Due Date: 03/22/2020
Fees: $0.00
Status: REPAYMENT
Interest Rate: 6.800%
Accrued Interest: $402.10
Last Payment Received:
Outstanding Balance: $2,964.22
Principal Balance: $2,562.12

Loan: 4
Due Date: 03/22/2020
Loan Status: REPAYMENT
Loan Type: DIRECT UNSUB
Interest Subsidy: Unsubsidized
Original Loan Amount: $2,000.00
Interest Rate: 6.800%
Accrued Interest: $402.10
Capitalized Interest: $637.22
School Name: xxxxxxx
Lender Name: DIRECT LOANS
Principal Balance: $2,562.12
Convert to Repayment: 11/24/2013
Disbursements: $2,000.00 on 10/08/2011

Group: E
Due Date: 03/22/2020
Fees: $0.00
Status: REPAYMENT
Interest Rate: 6.800%
Accrued Interest: $292.57
Last Payment Received:
Outstanding Balance: $2,154.85
Principal Balance: $1,862.28

Loan: 5
Due Date: 03/22/2020
Loan Status: REPAYMENT
Loan Type: DIRECT UNSUB
Interest Subsidy: Unsubsidized
Original Loan Amount: $1,593.00
Interest Rate: 6.800%
Accrued Interest: $292.57
Capitalized Interest: $331.47
School Name: xxxxxxx
Lender Name: DIRECT LOANS
Principal Balance: $1,862.28
Convert to Repayment: 11/24/2013
Disbursements: $1,593.00 on 05/24/2013

Group: F
Due Date: 03/22/2020
Fees: $0.00
Status: REPAYMENT
Interest Rate: 6.800%
Accrued Interest: $124.79
Last Payment Received:
Outstanding Balance: $919.30
Principal Balance: $794.51

Loan: 6
Due Date: 03/22/2020
Loan Status: REPAYMENT
Loan Type: DIRECT UNSUB
Interest Subsidy: Unsubsidized
Original Loan Amount: $670.00
Interest Rate: 6.800%
Accrued Interest: $124.79
Capitalized Interest: $151.05
School Name: xxxxxxx
Lender Name: DIRECT LOANS
Principal Balance: $794.51
Convert to Repayment: 11/24/2013
Disbursements: $670.00 on 02/14/2013

Group: G
Due Date: 03/22/2020
Fees: $0.00
Status: REPAYMENT
Interest Rate: 6.800%
Accrued Interest: $301.50
Last Payment Received:
Outstanding Balance: $2,222.83
Principal Balance: $1,921.33

Loan: 7
Due Date: 03/22/2020
Loan Status: REPAYMENT
Loan Type: DIRECT UNSUB
Interest Subsidy: Unsubsidized
Original Loan Amount: $1,554.00
Interest Rate: 6.800%
Accrued Interest: $301.50
Capitalized Interest: $423.20
School Name: xxxxxxx
Lender Name: DIRECT LOANS
Principal Balance: $1,921.33
Convert to Repayment: 11/24/2013
Disbursements: $1,554.00 on 05/09/2012

Group: H
Due Date: 03/22/2020
Fees: $0.00
Status: REPAYMENT
Interest Rate: 6.800%
Accrued Interest: $247.81
Last Payment Received:
Outstanding Balance: $1,825.15
Principal Balance: $1,577.34

Loan: 8
Due Date: 03/22/2020
Loan Status: REPAYMENT
Loan Type: DIRECT UNSUB
Interest Subsidy: Unsubsidized
Original Loan Amount: $1,330.00
Interest Rate: 6.800%
Accrued Interest: $247.81
Capitalized Interest: $299.99
School Name: xxxxxxx
Lender Name: DIRECT LOANS
Principal Balance: $1,577.34
Convert to Repayment: 11/24/2013
Disbursements: $1,330.00 on 02/14/2013

Group: I
Due Date: 03/22/2020
Fees: $0.00
Status: REPAYMENT
Interest Rate: 6.800%
Accrued Interest: $226.63
Last Payment Received:
Outstanding Balance: $1,670.99
Principal Balance: $1,444.36

Loan: 9
Due Date: 03/22/2020
Loan Status: REPAYMENT
Loan Type: DIRECT UNSUB
Interest Subsidy: Unsubsidized
Original Loan Amount: $1,140.00
Interest Rate: 6.800%
Accrued Interest: $226.63
Capitalized Interest: $346.38
School Name: xxxxxxx
Lender Name: DIRECT LOANS
Principal Balance: $1,444.36
Convert to Repayment: 11/24/2013
Disbursements: $1,140.00 on 01/11/2012

The letter said something along the lines of "You have 90 days to choose a repayment plan". Now my question is what do I do next? I filed my taxes already, I made something like $25,000 for 2019. Based on how much I make in monthly payments for the last 3 years, I make something like $700-$800 every two weeks on a normal check and $800-$900 on better weeks. Say I make $750 average every two weeks ($1,500). I pay something like $300-$350 in bills. Whatever I have left over I divide by 2 (1 part goes towards things I need to pay for and 1 part goes towards savings).

I selected a Income-Driven Repayment Plan, it tells me:

Repayment Plan Monthly Payment
FDLP: Federal Direct Loan Program
Revised Pay As You Earn $48.08 StudentLoans.gov
Current Monthly Payment Amount: $52.00
Estimated Monthly Payment Amount: $48.08

My questions are:

1. Will the payment be spread to all 9 accounts?

2. Will the interest be higher because of the plan I've chose?

3. What happens to the interest I've already accumilated? Will payments go towards that first or just all 9 accounts in general?

4. Could I have them all lumped into 1 account? If so would that change how much I'd pay a month? Would it be higher?

At the time my score was something like 532, as of now it's at 685. I've been making all my payments to my 1 other loan, credit card (currently at 57% usage, trying to lower that down or apply for an limit increase at the end of the year) and never missed a payment when rehabing my loans.

Re: Default loans + rehab in progress

Anonymous — Tue, 18 Feb 2020 22:08:57 GMT

Hi again! Congrats!

What's the total on all the loans?

Yes, you might call your servicer to make sure they are grouped but the payment covers all the loans.

No, your interest will not be higher. However, it might be effectively lower. The reason being that of all the IDR plans, the REPAYE and IBR plans have loan subsidies. REPAYE has the most. If your payment does not cover all of the accruing interest:

- Unsubsidized - 1/2 the interest not covered by your payment

- Subsidized - Al for the first 3 years. 1/2 thereafter.

I'm on the same plan.

There is another method you can use too that should lower your payment. You mentioned how much you make "in a good week." Normally you would use the IRS link up and have your payments calculated that way. But you can have them recalculate early if you want. And you can use your timesheets if your income varies. So you simply use your lowest paystub and have them recalculate it early. It has to be within 90 days of the paystub or timesheet (other methods are on the application for IDR plans) and type the frequency of pay on there (weekly). Then told send it off, checking the recalculation box. Once you get the lower payment, it's good for a brand new year. Same in you run into hardship or have unpaid time off.

This is an in the fine print of your minimum payment letter

3. It gets capitalized, added to the principal. But after you're on REPAYE it won't won't any more.

4. You can ask them too. You don't have to consolidate.

Keep the great questions!

Re: Default loans + rehab in progress

Anonymous — Fri, 21 Feb 2020 01:12:01 GMT

I know this is late, but I just signed up for the rehab program and in the terms (I am keeping a copy handy at all times for future reference) state that any garnishments or tax withholding ceases immediately when you enter into the rehab program. Now, since it is a fed program, I would think verbiage would be similar regardless of the CA that handled it and once out of the rehab program (as early as after the first 5 payments) and no longer in default, you def should no longer be garnished or having your tax returns withheld. I would reference the terms of the program, but since you already filed your taxes, I'd be curious to know if they were actually withheld from you. Good luck and I am so happy for you that you has over 100+ point boost in your credit! I currently have 19 SLs reporting negatively to all 3 CRAs every month since 2016. My credit is sunk and I need to crawl out of the pit, but I will get there, and seeing other progress and personally just signing up for the rehab program gives me hope!

Re: Default loans + rehab in progress

Anonymous — Fri, 21 Feb 2020 01:53:51 GMT

I just finished the rehab program. I filed my taxes this year and received my return in full, they didn't take it like they did last year (they took something like $1,000 and put it towards my loans). I saw someone else post about trying to get it back, but from what I've seen you don't get it back once it's been put towards your loans. As long as you're in the rehab or finished it and you're back on track they shouldn't take your tax return anymore.

While my loans were in default and I did the rehab program my credit score was in September 2019 was 532. I made all my payments on time and took out a credit card with a $200 limit and kept making payments on that too. My limit increased to $500 as of February 2020, I also signed up with "Self Credit Builder Account" for $526 and have made monthly payments (I will finish paying in August 2021, when it matures it will be deposited back into my bank account, this doesn't count the interest you end up paying though).

My score today is 681 now.

All those negative accounts will remain on your profile 7 years from the last payment you made on them (mine was in 2017 so they will fall by 2023, I thought it would have fallen by now because I took them out in 2011 but didn't know about when they fall in default or last payment they count from there).

So yes, my credit score went up 100+ and I intend to keep it going up.

Also from what I've seen, they only take your Federal return, not your state.

Re: Default loans + rehab in progress

Anonymous — Fri, 21 Feb 2020 02:09:55 GMT

Thank you for the info!

I have an awful fico as you can see and it will not budge, but it sounds like I'm on the right track! My loans are really old and it went from I was young and dumb to working on it and then huge (and expensive) family problems kept me away from keeping up with my responsibilties.

I have a Self Lender loan that has been reporting successfully for the past 6 months and I just got a VS store card w/ 1k limit coming in the mail. I think those will help nicely for when the defaults drop. I'm not worried too terribly much about the tax return issues, as that is a whole other situation. Right now, there is nothing for them to keep, but not something I want to get into. Since the loans are old I think some defaulted in 2011 and other up to 2016, mos recently (the only one I tried to rehab). I have some issues with the rehab and loans I'm doing research on as far as repayment since I am similar to a travel nurse, but another specialty...income works wildly different. Also, I have loans defaulted with 4 seperate lenders, so I wonder if that is taken into consideration with payment amounts regarsing my "discretionary income". I will keep digging and probably make an official post on that.

Thank you again and congrats!