I have about 42 thousand in gsl debt that has gone through to about 60 K now. I have been disabled and trying to get on ssi/ssdi for about 6 years now.
I have an apartment via a government program to assist disabled persons with housing, but have only 115 plus food stamps from the state while my case keeps geting denied for ssi.
I have been out ouf touch with my lender now for about 6 or 8 months, because of my illness.
I was contacted by Account Control Technology, and told that I cant get back into a forberance program because my loans are now in default. They offered me a chance to get this back to a active state, if I pay 5 bucks a month for 9 months.
It sounds good, but before I signed the letter, they will reduce collection costs to 18.x amount of the unpaid principal and accured intrest outstanding at time of loan rehabilitation.
collection costs may be capatiled at the time of the loan rehabilation by you new lender, it says, along with outstanding accrued interest, to for one new principal amount. Should I do this or am I being fed a choking amount of interest…collection charges?
Should I do this or are there better options?
Thank you for your help.
I’m assuming that GSL stands for government student loans. I don’t think a forbearance approach makes sense since interest will continue to build and not lead to any path towards discharge.
I think you should read Student Loan Consolidation Opportunities and the Best Way to Lower Your Student Loan Payments.
Pay very close attention to the Income Contingent Repayment and Income Based Repayment plans that might make sense after you consolidate your loans. See the consolidation calculator here.
This program may lower your payment as low as $0 per month and allow you a path to discharge your loans eventually.
The danger of leaving your government loans in default is they are one of the few debts that can actually garnish social security payments.
This of course would be a stopgap measure till your social security disability is approved. Then, you could go for a total and permanent discharge. See this information.
Please post your responses and follow-up messages to me on this in the comments section below.