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[Guest]

I'm confused and need guidance from someone who knows the system
better than I do. I owe about $70K dollars with the obscene penalties
added to my student loans. My lender (KHEAA) has offered me two
options -- a consolidation loan for 30 years at a high (but barely
manageable) payment, or a settlement at $43K. Given that there are any
number of other companies that do consolidations besides the one KHEAA
is offering, could I not accept their settlement offer, and finance it
through some other company's consolidation? It seems like if I went to
a private company that does consolidation loans, they should be just
as happy (happier, even) to finance $43K for me as $70K. In fact, it
would make it much easier for me to make reliable payments to them. Is
there some reason I can't do this? Are there any suggestions as to
what lender is best to work with? Thanks!

[Steve Blank]

I'm no expert on all the consolidated lending rules, but I don't think
you can finance a settlement with another consolidation loan since the
settlement probably closes out your student loans.

I guess you could talk to another consolidation lender to see what they
have to say, but you might have to go outside the student loan arena and
simply seek a personal loan of some sort. Problem may be that since you
apparently are in default and it shows on your credit report, a bank may
not be willing to make you a loan.

Sounds like you might want to make a personal visit to a local lender
and discuss the situation.

--
Steven B. Blank
College Financial Aid Consultants
29 Ives Hill Court
Cheshire, CT 06410
(203)250-7761



itsme@klh.net wrote:

[Joe Chromy, Jr]

hello Its Me - Its Me!!

More information is needed... but - A federal consolidation loan will not be
consolidated at the settlement amount. The lender who you get a federal
consolidation loan through will need the entire balance to get the return on its
investment (ROI) There is no provision or practice that allows for a settlement
consolidation. (Kentucky would have to eat too much of the loan balance and ED
would not like this)

There are private loan consolidators that will give you a $43,000 loan - but you
will need to own a house. Also, your interest rate will be increased if you are
a high credit risk...

The law allows for you to make reasonable and affordable monthly payments while
your loan is in default. mention this to them.

Also, the Federal Direct Consolidation loan program has an Income Contingent
Repayment Plan that allows you to adjust your monthly payments based on your
income level. Sorry, not many deductions in this program, however, it is good
for some and not for some others... With that being said... anyone can qualify
for the program and if you have an outstanding balance after 30 years in
repayment (and you loan is not in default) the government will write off the
balance - but be watchful of the 1099 that will be issued... under IRS tax
regulations the written-off amount is considered income and you will be taxed on
it.

I hope that this helps - write me off line if you want some personalized
guidance.

On Mon, 10 May 2004 17:08:05 -0500, itsme@klh.net wrote:

:|>I'm confused and need guidance from someone who knows the system
>better than I do. I owe about $70K dollars with the obscene penalties
>added to my student loans. My lender (KHEAA) has offered me two
>options -- a consolidation loan for 30 years at a high (but barely
>manageable) payment, or a settlement at $43K. Given that there are any
>number of other companies that do consolidations besides the one KHEAA
>is offering, could I not accept their settlement offer, and finance it
>through some other company's consolidation? It seems like if I went to
>a private company that does consolidation loans, they should be just
>as happy (happier, even) to finance $43K for me as $70K. In fact, it
>would make it much easier for me to make reliable payments to them. Is
>there some reason I can't do this? Are there any suggestions as to
>what lender is best to work with? Thanks!

Bravejoe

"That's my opinion. I could be wrong." Dennis Miller
"It Doesn't Matter!" Bravejoe

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