I have $54,000 in federal student loans plus owe $20,000 in fees for when my loans were sold and bought by new loan collection agencies. I defaulted on my student loans when I became homeless a few years ago. I graduated from college in 1997 with an (useless) art degree but would like to go back to school to obtain a trade certificate and cosmetology license. I am not currently working but am no longer homeless.
I was contacted by ACT (Account Control Technology), the current holder of my student loans about consolidating my loans to get them out of default. They told me about the William D. Ford loan and told me that they offer an income contingent option and it was explained to me that if I make below $16K a year, my payments would be zero and that my invoices would reflect that. It was also explained that as soon as I sign the application and send it back to ACT, after the 8 week processing time, my loans would be taken out of default. My first question is: really? It was further explained to me that the only other way to get my loans out of default would be to make payments on my current loans for 9 months at a minimum of $350.00/month (the ACT representative said they wouldn’t accept anything less). I was also informed that after 25 years, the balance of my loans would be forgiven. So my second question is: is that true? And thirdly, she said I’d be eligible to apply f or more federal grants and loans to go back to school after my application was processed and my loans were taken out of default. Why does all of this sound too good to be true? I’m just trying not to make any more mistakes concerning my loans, which I will forever regret ever having applied for. Please give me your advice and if anyone else can tell me what their experience has been with William D. Ford loans, please feel free to chip in. Thanks!
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