cancel
Showing results for 
Search instead for 
Did you mean: 

FED loans

Estimate your FICO® Score range for free

FICO® Score Estimator

Auto Loans for ANY Credit Situation. Immediate Response.
Advertiser disclosure
Highlighted
Member

FED loans

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. 

Message 1 of 17
16 REPLIES 16
Established Contributor

Re: FED loans

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



Message 2 of 17
Member

Re: FED loans

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. 

Message 3 of 17
Valued Contributor

Re: FED loans


@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?)




Garden goal: keep on keepin' on until 2020.
Message 4 of 17
Established Contributor

Re: FED loans

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.



Message 5 of 17
Member

Re: FED loans

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. 

 

 

Message 6 of 17
Established Contributor

Re: FED loans

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



Message 7 of 17
Frequent Contributor

Re: FED loans

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

800+ for all 3 CRAs.

Took 4 years after rehabbing a bunch of defaulted student loans, but totally worth it.
Message 8 of 17
Member

Re: FED loans

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.

Message 9 of 17
Member

Re: FED loans

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.

 

Message 10 of 17
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.