My Financial Recovery

Student Loan Collection News

Posted on: May 30, 2009 by Matt

As many of you know – I have some student loans that have been in collection / defaulted for about seven years now. So far I have been unable to locate a rehabilitation program for them and have been pretty much at the mercy of one nasty debt collector.  They yelled, cursed and degraded me in order to get payment and I am fairly certain that they had violated the Federal Fair Debt Collection Practices Act.

So when I received letters in the mail last Saturday noting that my loans had been reassigned to another collection ageny I had some mixed emotions. I was disappointed because it appeared that I would now be dealing with the original lender once again but glad that I no longer had to deal with the folks from the previous agency.  I was also a bit frustrated due to the amount of digging I had to do in order to contact somebody at the correct location.  I had already called the previous collection agency, the processing company and the original lender and thought I had been given the correct place to mail my payments – then I received the letters noting I had someone else to call.

Earlier this week I placed a call to the new collection agency.  Much to my surprise – they were courteous, professional and really easy to work with.  They did not once accuse me of anything and were glad to work with me on a payment schedule.  They were more than happy to honor my previous arrangement and even offered up a couple of pleasant surprises.

First – they noted that there had been a rehabilitation program that was offered up until about a year ago. The program ended due to the economic crisis but may become available again.  I had been asking if there was any possible way to get these loans back into good standing for five years and was repeatedly told no but I could settle in full if I paid up $18,000 in cash.  I found it a little frustrating that I had been lied to for so long and was a bit angry but I can not change the facts now.  On the flip side they also said that should the program become available that they will submit all on time payments made as eligible for the program. That means if the program kicks off a few months down the road again I could be rolled into an automatic rehabilitation and have my loans back in good standing. Of course I do not expect anything yet but the folks over at the collection agency sounded a little hopeful that the economy was headed in a positive enough direction that they have heard a little buzz about the possibility.

Secondly – the new agency will send out monthly balance sheets! It might seem like a standard practice to get a monthly statement for your debts but for some reason the old agency would not send them.  If I was to call and request them they would usually say they would send something but it normally would not contain complete records if it arrived at all.  I discussed options for additional payments and was told that it was ok to have the normal payments applied and to mail back extra with any of the statements provided to have the additional payment applied to that particular loan.

Given the change in collection agencies I am cautiously optimistic that I can work something out and pay these debts down! Right now the loans I have in collection have followed me along like some form of financial leprosy and I will be happy to see those debts disappear! After paying them off I will be down to my last two student loans which are both in good standing and then will be (hopefully) debt free!

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