In helped someone with their federal student loans in default. The sooner you're out of default (and you only have one attempt to do so) the sooner you can overcome this hit to your score.
I hope you don't take anything I say as a judgement against you. Many people, including myself, have "overlooked" their student loans. Now's a great time to make it right. If DOE says this is the right collection agency, accept that. They probably suck; imo most of them do. They're often rude. They make mistakes often. You can't switch though. You just have to keep a close watch to be aware if there might be any errors so you can catch anything before it becomes a problem. They didn't have to send you anything before they start collection attempts. But you can request copies of everything you agree to. If they are asking for financial information, it's because they will use it to come up with an affordable payment plan (rather than your loan's hefty normal monthly payment. )
You have a limited amount of time before they will probably try to start the process to garnish your wages. You cannot choose who collects against you.
I highly suggest you keep the loan as a federal loan. There are protections you have that you will not get back if you privatize it. To get out of default you have two options: rehabilitation and consolidation. Rehabbing is ~9 payments that can be adjusted to affordable payments. Necessary expenses can offset your income. This step is required. After rehabbing your default will be removed, sometimes even your lates, and it will return to a regular servicer. Consolidation requires only a few payments but does not remove the default. It will make the loan show up on your credit report as one, new loan loan at 100% utilization.
Beyond garnishment, they can also take your tax refunds . If you rehab your score will likely recovery a lot in a year's time (read experiences of other members on here). If you default again, it stays that way until you pay the loan off completely. Once a rehabbed or consolidated loan gets sent back to a servicer, you'll have access to payment plans such as the Income-driven repayment plan.
Good luck.
I hope you don't take anything I say as a judgement against you. Many people, including myself, have "overlooked" their student loans. Now's a great time to make it right. If DOE says this is the right collection agency, accept that. They probably suck; imo most of them do. They're often rude. They make mistakes often. You can't switch though. You just have to keep a close watch to be aware if there might be any errors so you can catch anything before it becomes a problem. They didn't have to send you anything before they start collection attempts. But you can request copies of everything you agree to. If they are asking for financial information, it's because they will use it to come up with an affordable payment plan (rather than your loan's hefty normal monthly payment. )
You have a limited amount of time before they will probably try to start the process to garnish your wages. You cannot choose who collects against you.
I highly suggest you keep the loan as a federal loan. There are protections you have that you will not get back if you privatize it. To get out of default you have two options: rehabilitation and consolidation. Rehabbing is ~9 payments that can be adjusted to affordable payments. Necessary expenses can offset your income. This step is required. After rehabbing your default will be removed, sometimes even your lates, and it will return to a regular servicer. Consolidation requires only a few payments but does not remove the default. It will make the loan show up on your credit report as one, new loan loan at 100% utilization.
Beyond garnishment, they can also take your tax refunds . If you rehab your score will likely recovery a lot in a year's time (read experiences of other members on here). If you default again, it stays that way until you pay the loan off completely. Once a rehabbed or consolidated loan gets sent back to a servicer, you'll have access to payment plans such as the Income-driven repayment plan.
Good luck.
Emcarthur: You're welcome!
Btw have you seen the loan forgiveness on some of the Perkins Loans?? 70% forgiveness in 4 years or 100% in 5 from what I'm understanding. It's a certain percentage forgiveness per year, including that year's interest. Want the link?
Btw have you seen the loan forgiveness on some of the Perkins Loans?? 70% forgiveness in 4 years or 100% in 5 from what I'm understanding. It's a certain percentage forgiveness per year, including that year's interest. Want the link?