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FED loans

Sabii
Valued Contributor

Re: FED loans

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?




Message 11 of 34
calyx
Super Contributor

Re: FED loans

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.

F8 EQ: 804 | EX: 781 | TU: 782 | Accounts: 2/6 3/12 7/24 | Reporting: AZE10
Happy practitioner of AZE7or8or9or10 | Team Finances > FICO
Message 12 of 34
Waginator
Established Member

Re: FED loans

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. 

 

Message 13 of 34
Sabii
Valued Contributor

Re: FED loans

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.



Message 14 of 34
Sabii
Valued Contributor

Re: FED loans

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.



Message 15 of 34
Waginator
Established Member

Re: FED loans

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. 

Message 16 of 34
Sabii
Valued Contributor

Re: FED loans

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.



Message 17 of 34
timtim
New Visitor

Re: FED loans

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.

Message 18 of 34
Sabii
Valued Contributor

Re: FED loans

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.



Message 19 of 34
calyx
Super Contributor

Re: FED loans

+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)

F8 EQ: 804 | EX: 781 | TU: 782 | Accounts: 2/6 3/12 7/24 | Reporting: AZE10
Happy practitioner of AZE7or8or9or10 | Team Finances > FICO
Message 20 of 34
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