Second, the resulting consolidation loan may be eligible for the Revised Pay As You Earn Plan.2 Third, the consolidation loan will be eligible for forgiveness under the Public Service Loan Forgiveness Program.3 Finally, repaying your loan will be simpler.
You’ll have just one servicer to pay and send paperwork to.4 Move quickly if you choose consolidation to stop the garnishment.
When you rehabilitate a defaulted student loan, there’s a limit on the number of monthly payments you’ll make: 9.
The two options differ, however, in the amount of your monthly payments and the benefits you get for making those payments. Remember, a voluntary repayment agreement does nothing more than stop a pending wage garnishment.
There may not be a cap on how many payments you must make.
That’s because the notice was sent to the last address the servicer has on file. In that letter, there’s a telephone number for a collection agency.
And that address is usually where they lived while they were in school. The collection agency might be Pioneer Credit Recovery. Or it may be any of these 31 collection agencies the Department of Education has hired to garnish wages.
You can’t consolidate a defaulted loan if there’s an active garnishment.
Since it takes about 2 to 3 months for a consolidation to complete, set up a repayment agreement or rehabilitation with the collection agency first. From October 2015 until that December, over 6 million in wages were garnished for defaulted student loans. When it did, you either forgot about it or didn’t have the money to pay the bill your servicer kept sending you. And when it went into default, you gave the Department of Education superpowers. That loan went into repayment some time after you left school.…the garnishment can restart if you lose the hearing.You can request hearing by submitting this request for an administrative wage garnishment hearing form.Here’s what you need to know: If you enter a voluntary repayment agreement, you’ll be paying about the same amount you would be if you were being garnished. It’s only later, when you learn the offered settlement requires you to pay about 90% of the principal and interest, that you realize settling is ugly — to your finances. Rehabilitating a defaulted federal student loan is one of my two favorite ways to stop a garnishment.