Question on Student Rehab!!

[Anonymous]

Hello Everyone!!!

Well my bfs Student Loans went into default, after discussing future plans I explained he had to get back on track or his CS will not allow for us to build stable future for our family. We are planning on getting married 3 yearss down the road

Well enough of me, let's talk about  credit.

Last month he called Premiere Credit Of North America (CA) and agreed to enter the rehab program paying $150.00 per mont. Everyone agreed and happy as a hippo the first month they deducted $5 and the second one they deducted $150. During this month they asked him for his paystubs. Even though he has a degree he is currently only making 10.50 hr on a full time job. He submitted them a couple of weeks ago and today he received this emailed Adobe Doc stating:

You have expressed to us that you wish to rehabilitate your defaulted Federal Family Education Loan (FFEL) program
student loan(s), Federal Perkins, National Direct, National Defense and/or Direct Loan(s) held by the U.S. Department of
Education (ED).
We have calculated your monthly repayment amount to be $5.00 based on information about your income that you have
provided to us.
If you agree to make monthly payments of this amount, sign the agreement and return it to us at the following address:

Does this means instead of $150 he needs to only pay $5 due to his low income?

Would this be automatically effective?

Has any of you went through this route? He is capable of paying $150 instead of $5 if necessary but he also has other collections we would prefer using the reminder for.....

Any feedback is appreciated!!!

[SCF]

It sounds like they are indeed offering to set his rehab payments at $5/month based on his income.  Rehab payments are required to be reasonable and affordable, and it sounds like they're going above and beyond to make sure his payments meet that standard.  If he has other debts to apply the money to, I would go ahead and accept the $5 payment plan, especially if those other debts are higher interest or higher priority for some reason.

I would call the CA to confirm the payment amount before you assume it goes into effect automatically, but hopefully it does.

[Anonymous]

Hi, I just recently accepted an offer like this for my student loans after being hunted relentlessly by Dept of ED. My new arrangement with them through Allied is $5/month for 9 months and then my loans will go back into a statisfied state and I will be able to go back to school and arrange for deferrement and they said they will remove all the negative information from my credit report. 

-Good Luck! 

[Anonymous]

That's really great!!!. What is kind of discouraging is that he called them and they seemed to state this was wrong information. They started asking him some questions and stated his actual payment was gonna be around 300 if he went that route. Did you call them and asked them? or did you just sign up the paperwork and returned it?

[Anonymous]

Allied Interstate, Inc. actually relentlessly called everyone in my family and finally caught up with me at work after they called 3 times in the same morning demanding they speak to me! After we got through the rudeness of it all they asked me if I had $8k to pay them over the next 10months, my answer NO, then they said they would be garnishing 15% of my wages from my part-time job...my answer then I will have to quit my job because it won't be worth the time. So I finally said to her, "How am I supposed to get ahead without being forced to a shelter because I wanted an education?" she then got out an estimator and plugged in my taxable income, the low income level for the area I live in and said "Your payment for the next 9 months would be $5"

So at best they go by taxable income. I work freelance this year and a part time job, my freelance work I have not accounted for yet until tax time so they had to go on my part time. 

I then called them the next day becuase it was my day off and she walked me through our conversation again and as I was on my computer she pointed me in the direction of how to make a $5 payment and fill out the paperwork from myeddebt.com , I filled out all of the paperwork faxed and emailed it back to them, now I'm in Rehab and it wasnt pretty getting there, ijs.

Oh yes and I will have to wait to file my taxes this coming year because Dept of Ed has a Tax offset against me but my collection rep said that would be lifted once I complete the program so I will just wait and file next year, I can't afford to give them $3k at once. It's good I got this deal done because another collection agency was trying to pick up my debt based on a letter and they may not have been as cooperative as Allied turned out to be. 

The form I filled out was 

• Alternative Documentation of Income on myeddebt.com , along with 2 paystubs. 

[Anonymous]

Yay worked for you!!!!

My bf called the place again, He asked for a sup, the supervisor only based on the income stated he does qualify for the $5 repayment fotr month. We were so excited as he has and additional $145 to pay all his additional debts (which are a lot). Im just worried that the 2 months he has paid will not count towards his already started rehab. Any one else has experienced this?

[Anonymous]

Glad he qualified, sometimes you have to hop over heads to get what you need.