topic Re: Student Loan Help in Student Loans

Student Loan Help

Anonymous — Wed, 09 Feb 2011 22:39:49 GMT

So my boyfriend defaulted on his student loans a few years back. We recieved a letter today from Financial Managment systems stating that the U.S. department of Education (ED) has placed your account with us for collections. they go on to say that:

-we have 30 days to respond (or dispute)

- we can either compromise a settlement

-we can do loan rehabilitation

-loan consolidation

-or we can make reasonable and affordable montly payments

My questions are

1. Should I even talk to this company or should we ONLY deal with the Department of Education?

2. If we should talk to this company, how can we insure that the negative status be removed from his report?

3. If we should deal with the Dept of Education what is our next step

PLEASE HELP

Re: Student Loan Help

Tazman81 — Thu, 10 Feb 2011 14:59:00 GMT

Was it Direct Loans that was holding/servicing the loans? If at all possible I would recommend trying to do a rehabilitation program with the company that originally held the loans. This way, if all the payments are made on time over the 9-12month period then the loan can be rehabilitated and the baddies wiped from the credit report. Though a loan consolidation may offer cheaper payments, it will not allow the baddies to be wiped from the credit report. Neither will any other options mentioned in the letter. If the previous lender does not want to work with you directly, then I would talk with the Collection Agency about the rehabilitation option and go that route.

Re: Student Loan Help

gamegrrl — Sat, 12 Feb 2011 14:55:07 GMT

Two bits of advice from personal experience with this situation:

Make sure you know what the benefits and pitfalls are of each option before making a choice
Don't agree to pay more than you KNOW you will be able to pay each month

With student loan rehabilitation, the negatives DO NOT magically disappear from your credit report when you have successfully completed the rehabilitation process. All the lates will still be there, and will eventually drop off on the same schedule as any other late payments on your credit report.

Re: Student Loan Help

rayandsuebrown — Tue, 15 Feb 2011 15:15:23 GMT

That is FMS you are dealing with!!!! Don't ignore them. They will have the right to garnish your federal tax returns until the debt is paid. That's a serious company and they ain't no BS! Ask the IRS, they are affiliated with them. Hope this helps... I hope to never have to deal with them. I rather go without heat and a car then to deal with them.

Re: Student Loan Help

Anonymous — Sat, 19 Feb 2011 01:52:59 GMT

Thanks for the advice, I got updated info from the Dept of Ed that said to directly talk to FMS to make arrangements. We will try and do the rehabilitation program, the problem is that he is self employeed with a very unstable salary right now but I guess anything is better than nothing.

Re: Student Loan Help

Anonymous — Fri, 25 Feb 2011 02:31:11 GMT

do you have enough cash on hand to negotiate a settlement? i would at least ask them what they would settle for, and try to come up with the $$ if it's possible.

Re: Student Loan Help

Anonymous — Tue, 01 Mar 2011 00:55:31 GMT

not really, the letter they sent said they would settle for $8,000 and since we dont have that we could either try and take out a personal loan with our credit union to make a settlement or we could do the montly rehab option. I think the rehab option is our only choice. Also how many people can activly report on a student loan that is in default?