Consolidating student loans when 1 is in default.

I keep trying to google to find a way to consolidate my student loans but I can’t find any useful information. I have one loan in default and the other 6 are overdue (but not defaulted yet).

I’ve read that I should consolidate through the government because if I go through a private company, I lose rights of something or other. I was trying to do a consolidation application through what I think (but am not sure) was the government-sponsored option, and it wouldn’t go any further after I stated that I wanted to consolidate a loan in default.

Where the heck should I be looking? Is there a list of helpful websites or something on this topic? Is there a company or 2 that handles default consolidation? I’ve contacted my loan providers (Sallie Mae and my university) and both have stated they will not advise on how or with whom to consolidate. I am ready to start paying back my loans but I don’t even know where to begin looking, other than google, which is not helping me. I keep getting links that say “You can consolidate defaulted loans easily!” but never saying where or how to do so.

I didn’t put this in IMHO because I’m not asking for any opinions on which company is better. I just want a list of places to start off with (or a link to a place that lists different places) and will choose one on my own.

Here’s a link to a government site on loan consolidation. http://loanconsolidation.ed.gov/index.html

Do you have any federal loans or all private? Because for a private loan I believe you have to go through a private consolidator (if that’s even a word, but you know what I mean).

Did they give a reason for not wanting to help? Maybe you were just talking to a jerk at Sallie Mae, but I thought the point of a college’s financial aid office was to assist you with these things? I know you mentioned in your previous thread that you didn’t graduate, but when I graduated we got a whole packet of information re: this stuff, so they should be able to give you something like that upon request. If you have a federal loan the college was actually obligated to give you an “exit interview” and counsel you on repayment options upon leaving school.

I think getting your loan out of default is the first step however.

I didn’t do an exit interview or even officially drop out. I left in pretty dire mental straits. I went to the financial aid office in the middle of finals week and told them I hadn’t gone to any class in months, and I was leaving town and dropping out the next day. They wanted to schedule me for an exit interview, but I just wrote something on a sheet of paper (I don’t even remember what), thrust it at the secretary, and went home to pack. They may have mailed something to me but I threw out a lot of mail in those days.

All of my loans were federal. 6 Staffords (some subsidized, some un-) through Sallie Mae and one Perkins through my school. It’s been almost 3 years now since I quit, and SM has been good about granting me deferments/forbearances, but their patience is probably out by this point (don’t blame them). My school was not nice, they did not care (the defaulted loan is pretty small, less than 1k, but I don’t have that kind of a lump and haven’t for years). I don’t recall the exact text of the reply I got from them, it’s on my home email and I’m at work, but they blew me off.

If I have to consolidate the 6 and get to paying on them I guess I can do that. But I can’t afford to do both that AND pay on the defaulted one separately. I’m worried that I’ll start getting garnished after I arrange an affordable payment plan on the 6 SM loans, and then it wouldn’t be affordable anymore.

Is there a debt counselor you could work with maybe? I don’t know if those people are expensive or not. And was it a Sallie Mae loan you defaulted on or the Perkins loan?

Either way, can you explain the situation to someone at Sallie Mae? I would be honest about the issues you were having at the time and if you had a doctor who was treating you, have him write a letter or something explaining that you were unable to handle your affairs or something like that.

I don’t mean to sound like I’m calling you incompetent or anything…my mom went through something similar when she divorced my dad (she has severe depression to begin with) and was evicted from an apartment I had to co-sign on (I was in college though therefore unaware of what was going on). I was told that that being on my credit report isn’t a huge issue as a letter from my mom’s lawyer and a doctor explaining her situation will generally be satisfactory to lenders.

That’s a slightly different situation since it involves something I didn’t directly do, however it’s worth a shot in your case I think. That may make these people more sympathetic when they know you had a genuine medical problem rather than just being a dead beat.

I wasn’t under a doctor’s care at the time so that wouldn’t help.

The Perkins loan is the defaulted one. I am still searching for resources.

Okay CatherineZeta, the link you gave me did the trick. I didn’t have time to investigate it fully earlier, but I just went through and applied (adding each individual loan’s information is VERY tedious, ugh) and my application is being processed. Got my fingers crossed that I did everything right.

Thanks!

Awesome! Glad to help and best of luck.