What Loan company will take over my federal student loans when the loans are in default?

What Loan company will take over my federal student loans when the loans are in default so I can go back to school? My loans are government loans from Saillie Mae. I owe them under $5000. I heard about this company that will take over your school loans from them but I do not know the name of the company. I am at the point where I can't get a federal student loan until I pay this off

Responses:

Right now it's taking over 9 months of consecutive payments to get out of 'default'. I have no way of knowing which lender is going to take over your loan because quite frankly, student lenders have really clamped down on who they will work with. This can also mean that you could stay in collections until it's paid off. The collection agency will work to find a lender to take your loan back over once you're out of collections. Once you are deemed out of 'default', you can then apply for student financial aid
The U. S. Department of Education or Direct Loans will usually take over defaulted student loans. Yeah, when you default on student loans you cannot take out any additional student loans until those loans in default have been rehabilitated. I would recommend applying for scholarships in the meantime. nextstudent.com / scholarship - search / scholarship - search. asp and Fastweb.com are good resources when trying to find scholarship money. Good luck!
When your federal educational loans are in default, you have several options: You can repay the loan in full. You can negotiate a new payment plan with your lender. You can "rehabilitate" your loan. You can consolidate your loan. Obviously option one is rarely attractive or possible for defaulted borrowers. Option two renegotiate should be investigated fully - most borrowers skip this step, but it's probably the best option for most people. Call your lender and ask to speak to someone in the "Workout" Department. Explain your situation to them there's nothing unusual about it and ask what options are available to you for switching to a graduated, extended or income - sensitive repayment plan. If your lender will agree to change your repayment plan, a few regular payments will get your default status removed, and the new plan may be easier for you to keep up with. Option three rehabilitation is really a specific form of a workout agreement. It probably will not help you much in your situation, because it requires an agreement between you and the lender that will allow you to make 9 consecutive on - time payments of some agreed - upon amount. Option four is everyone's favorite, but you must absolutely understand what a consolidation loan will do. To keep this utterly simple - a consolidation loan is a brand new loan that will pay off your old, defaulted loan. A consolidation loan MAY lower your monthly payments, but understand how this works. A consolidation loan never lowers your payments by wiping away some of your debt - a consolidation loan lowers your payments by stretching out the length of your loan. If you pay less every month, you will make many additional monthly payments, and - in the end - you will pay far more back than you would have paid on the original loan. As an example: Suppose I lent you $100 and you agreed to pay me back in 2 weeks by paying me $50 a week. You came back a few days later and explained that you were not going to be able to afford to pay me $50 - is there something else we could do? "Oh, absolutely, " I'd say, gallantly. "Instead of paying me $50 a week for 2 weeks, how about if you only pay me $10 a week for 17 weeks?" See - in the end, you will pay me back $170 instead of $100 - that's how a consolidation loan works. But remember - we're not talking a $100 loan for a couple of weeks - by the time you pay that $5000 loan of yours back over many years, you will pay a few thousand more than you might have paid if you did not consolidate that loan. I have attached some information about consolidating from the Department of Education - take a few minutes to read it over. If you do choose to go this route, be sure to consolidate with a reputable lender or directly with the government and not with some fly - by - night operation that you learn about from some pay - per - c site shilled on Yahoo! Answers. Good luck to you!

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