I have $20,000 of very old Federal Student Loans that have long aged off of my credit report, but are being garnished from my wages. A Collections agency is constantly contacting me regarding the loans and I want to get rid of this problem, but fear taking the rehabilitation route as I think my payments would be too high due to my high income last year. Therefore, I'm wondering if offering to settle for a lower amount and payment in full is a doable and smart move.
Is it common for Collections Agencies to enter a settlement agreement on defaulted Federal Student Loans? If so, what can I expect and would entering such a settlement be a good idea? Would my credit remain unharmed? Or would a settlement put a new negative ding on my report?
Any help is greatly appreciated!
See my other response. Your options for settling Federal debt are very limited. If you can settle, make sure it also includes removing the default.