I have two student loans in default. The loans were taken out in 1987. Today I made my first call to try to get this started.
The Studentloan.gov site lists the total as $9,666. Wendham and the DOE told me on the phone the total is $12,026.79. There is no way I can pay this amount anytime soon.
1- FEDERAL PERKINS (Disbursement Date 10/13/1987) - Principal Balance $700 + Outstanding Interest Balance $982 = Total Debt $1,682 @ 5%
2- FFEL STAFFORD SUBSIDIZED (Disbursement Date 09/07/1987) - Principal Balance $2,800 + Outstanding Interest Balance $5,184 = Total Debt $7,964 @ 8%
They put a garnishment on my wages on Oct. 31st but it hasn't hit yet. I was speaking on the phone to the DOE guy today and he agreed to remove the garnishment.
Here's my process so far today -
1) Called the DOE and got transferred to Wendham. Spoke to a nice lady who began to inform me of my options. She told me that I couldn't consolidate the loans and enter into an IBR plan because a Perkins Loan couldn't be consolidated when there's a garnishment. She then said I have two options: 1- Ask for a Request for Hardship(which she was dead set against) or 2- make 9 monthly payments of $5. Either of which would bring me out of default and remove the garnishment. After that she said I could enter into an IBR arrangement. She also said I could offer a settlement of $8,710 (not possible). I told her I needed to look into this before I agreed to anything.
2) After hanging up with her I called the DOE and spoke to a nice man. I told him what she said and asked about the garnishment. He was happy to remove the garnishment today (30 day processing). So now I have two loans still in default but not in garnishment. He also told me that the woman was wrong and I only needed to make 5-6? payments of $5 to remove the default status. He told me to call Wendham back and tell them I was no longer garnished and about the 5-6? payments instead of 9.
3) I call the nice young lady back and tell her I am no longer garnished (yay!) and that it was 5-6 payments and not 9 but she still insisted it's 9 and the DOE guy is wrong. She now goes through the list of things I need to do. Forms and paperwork. She asked me tons of questions which I answered. She verified my $5 payments.
Here's the kicker that ended the phone call...she asked me for 3 personal references with their addresses and phone numbers. She said that she needed them in case they couldn't reach me by email or phone. I refused and she said i would not be allowed into the payment plan unless I gave them to her. I soon said sorry and goodbye.
And that's where I am on my first day. Can anyone tell me if this sounds right? Is she lying to me about the references?
I have two plans I am looking at right now.
1- Put the Stafford into an IBR after the payment plan is finished & offer a settlement for the Perkins for around $1,200 before it is rehabbed in 6-9 months
2- Consolidate the two loans and put them both into an IBR until I can pay them off completely. (my payments will be between $5 -20 for the next 2-3 years.)
I would appreciate any advice you can offer.
P.S. If the student loans are rehabilitated and I get on a payment plan can they put them back on my credit reports? Something I DO NOT want.