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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!

Thanks for the help.

3 questions I still have are what happens in regards to my credit report / score (which all loans have aged off of long ago) should I actually pay the loans in full?

Also, I have multiple loans all being handled by a Collection Agency. Is the Collection the ones I need to contact should I want to rehabilitate them, or is it someone else?

And do I need to rehabilitate each small loan separately?

Hello all, I am new to this board and hope you all can give me sound advice in my Student Loan repayment journey.

I have a scenario where I have very old defaulted Federal loans totaling about $20,000, that both defaulted and fell completely off of my credit report many years ago. A collections agency is handling the loans now, and have recently began to re-garnish my wages. I want to get this situation taken care of, but fear making payments via either rehabilitation, consolidation, or payment in full, will cause the negative trade lines to reappear on my credit report and cause my scores to plummet. Is this true? Will new payment activity trigger the loans (and associated negative trade lines) to reappear on my credit report for a new 7 year period?

What's my best course of action, with this scenario, to have the least impact on my scores? I can't afford to pay all the loans off in full, but I could manage to pay off a few of the smaller ones. Is any option better than the other in terms of maintaining a good credit score? Your assistance is greatly appreciated. I thank you in advance for your help.