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General
- Why
should I repay my defaulted student loan?
- What
should I do when being contacted by a collection agency?
- Why
is the balance higher than what I borrowed?
- My
credit is bad because of my defaulted student loan. Is there
anything I can do to improve my credit?
- Is
it safe to submit my confidential information online?
Disputes
- I
disagree with the outstanding balance of my defaulted loan. What
should I do?
- Why
wasn't my federal student loan discharged in bankruptcy?
- I
am being billed for the loan that was previously paid in full or
discharged. What should I do?
- This
loan has my social security number, but not my name, and I did not
sign a promissory note for this loan. What should I do?
- This
loan has my name, but not my social security number, and I did not
sign a promissory note for this loan. What should I do?
- This
loan has my name and social security number, but I did not sign
the promissory note for this loan. What can I do to clear my name
from this loan?
- Is
my loan dischargeable since I was not yet 18 years old when I
signed for the loan?
- The
student for whom the loan was borrowed is deceased. I was a
cosigner for the loan. Do I still have to repay the loan?
- I
am permanently disabled and cannot repay my student loans. What
should I do?
- Why
has I been charged interest since I was not aware that I owed this
loan?
Repayment
- Is it
safe to make a payment online?
- Can I
pay my student loan by credit card?
- I do
not have a credit card. What other ways can I pay?
- What
address do I send my payments to?
- What
are the available repayment plans?
- Can I
apply for another student loan and go back to school if I repay my
defaulted loans?
Financial Hardship
- Hardship
due to offset of Federal Tax Refund, Social Security Benefits, or
other Federal Stipends
- Hardship
due to Wage Garnishment
- Hardship
due to unreasonable payment requirement
Answers
General
- Why should I repay my defaulted student
loan?
If you default on
your student loan, the maturity date of each promissory note is
accelerated making payment in full immediately due, and you are no
longer eligible for any type of deferment or forbearance.
Continued failure to repay a loan in default may lead to several
negative consequences for you over the long-term including having
your wages garnished, your Federal income tax withheld, and losing
your eligibility for other federal loans like FHA or VA.
Once your loan is referred to a collection agency, the
following steps may be taken to recover the outstanding balance
due:
- The U.S. Treasure may withhold your federal income tax
refund and other payable benefits toward repayment of your
loan through Federal Income Tax Refund Offset program.
Additionally, Social Security benefits are subject to being
offset up to 15% of the payment amount due you under this
program.
- You may have to pay additional collection costs up to 25%
of your outstanding loan after your loan is assigned to a
private collection agency for collection.
- You may be subject to Administrative Wage Garnishment,
whereby your employer is required to forward 10% to 15% of
your disposable pay toward repayment of your loan. Garnishment
may continue until the entire balance of the outstanding load
is paid.
- If you are a Federal employee not in repayment on your
defaulted student loan debt, you face the possibility of
having 15% of your disposable pay offset by the Department of
Education toward repayment of your loan through the Federal
Employee Salary Offset Program.
- Legal actions may be taken to force you to repay the loan.
If you refuse to voluntarily repay your student loan, you may
be sued in State or Federal District Court for the outstanding
balance plus attorney's fees and court costs.
- Credit bureaus may be notified, and your credit rating
will suffer. To remove your loan from
default, please call 1-800-377-1904. Our professional loan
managers will assist you with a repayment option that is right
for you.
- What should I do when being contacted
by a collection agency?
First of all, do not get
angry or be afraid when being contacted by a collection agency.
Working with a collection agency need not be an unpleasant
experience. Secondly, do not be misled by a television
advertisement for a bankruptcy attorney which tends to fill you up
with bad impressions about collection agencies in order to earn
your business. While collecting defaulted education loans is our
business, helping people solve their financial problems is our
strong commitment. We understand that you sincerely wish to repay
your loan, but for a variety of reasons, you are unable to do so.
Our professional education loan specialists are experienced and
are very well trained to assist you getting out of serious
financial situations. Please contact us and let us help you
rebuilding your future. If you believe you do not owe the loan,
please contact us and let us know. We will gladly help you
resolving the situation.
- Why is the balance higher than what I
borrowed?
A Federal student
loan, like most loans, accrues interest over time. In addition,
the balance on defaulted student loans may be further increased by
the addition of collection costs and fees that are allowed for in the promissory note
thatyou signed. As a result, the balance that you currently owe
will be larger than the amount you borrowed if the amount you have
paid does not equal the amount of interest and/or fees that have
been added. You should also keep in mind that you may have taken
out multiple loans that were serviced by different agencies after
you graduated. Thus, payments that you made may have applied to a
different loan than the one you are currently disputing.
- My credit is bad because of my
defaulted student loan. Is there anything I can do to improve my
credit?
Failure to repay
your defaulted student loan can be damaging to your credit record.
In fact, consumer reporting agencies may continue to report an
account for 7 years from the opening date. However, there are
several things that you can do to at least partially, and in some
cases, fully restore your credit record. Your options for
improving your credit record include: repay or satisfy the loan in
full; rehabilitate your loans through our loan rehabilitation
program; consolidate your loans into one new loan with a single
monthly payment and a new repayment term; repay your educational
debt through our extended repayment terms that are affordable to
you.
- Is it safe to
submit my confidential information online?
Your
highly confidential information shall be transmitted using SSL
(Secure Sockets Layer) protocol. The SSL protocol is used to
encrypting information between your web browser and our web server
to prevent eavesdropping, tampering, and message forgery. It is
based on public-private key cryptography developed by RSA Data
Security and is a standard for electronic commerce.
Disputes
- I disagree with
the outstanding balance of my defaulted loan. What should I
do?
If you have proof that the payments you have
made toward your loan has not been credited, you should send a
copy of that proof to us. Below are the proof of payments we need
based on how the payments were made.
| Payment Type |
Proof
Required |
| Personal
check |
A copy, front and
back, of the cancelled check. |
| Cashier's check,
money order, or Western Union payment |
A copy, front and back, of
the cancelled payment instrument. You will have to obtain
this from the bank or agency that issued the check or money
order. A copy of your receipt is not sufficient.
|
| Federal Treasury
Offset Payment |
A copy of the notice from
the U.S. Treasury's Financial Management Service (FMS), or
from the Internal Revenue Service, notifying you that your
federal payment was offset. If you do not have this notice,
you may obtain a copy by calling FMS at 888-304-3107.
|
| Credit
card |
A copy of the credit
card's billing statement that shows the transaction in
question. |
Send the required proof of payments along
with a cover letter to:
Enterprise Recovery Systems,
Inc.
2000 York Road, Suite 114
Oak Brook, IL 60523
Be sure to include your name, address, phone
number, ERS account number, and social security number with your
submission. If you need assistance, please contact our account
managers at 1-800-377-1904.
- Why wasn't my
federal student loan discharged in
bankruptcy?
Federal student loans are not
automatically dischargeable in bankruptcy. Whether your loan was
dischargeable depends largely on when you filed for bankruptcy,
and how old your loan was at the time you filed. The chart below
will help you understand the requirements for discharging student
loans based on when the bankruptcy was filed. If your bankruptcy
petition was dismissed rather than discharged, then your loan
would not be dischargeable.
| If you filed for
bankruptcy |
Then |
| Before
9/30/1977 |
Your loan is
probably dischargeable. |
| Between 9/30/1977
and 11/5/1978 |
Your loan was only
dischargeable if you had been required to make payments on
the loan for at least five years prior to the date
you filed. |
| Between 11/6/1978
and 8/13/1979 |
Your loan is
probably dischargeable. |
| Between 8/14/1979
and 5/27/1991 |
Your loan was only
dischargeable if you had been required to make payments on
the loan for at least five years prior to the date
you filed. |
| Between 5/28/1991
and 10/7/1998 |
Your loan was only
dischargeable if you had been required to make payments on
the loan for at least seven years prior to the date
you filed. |
| On or after
10/8/1998 |
Your loan is probably
not dischargeable unless the bankruptcy court
specifically determined that requiring you to repay the loan
would constitute an undue hardship for you or your
dependents. |
There are exceptions to these general guidelines. Contact us
for more information.
To make a dispute, you must submit
the following proof of your bankruptcy to us:
- Copy of the notice of the first meeting of creditors
- List of creditors (schedule A-3)
- Final Discharge
Send the required proof of bankruptcy along with a cover
letter to:
Enterprise Recovery Systems, Inc.
2400
South Wolf Road, Suite 200
Oak Brook, IL 60523
Be
sure to include your name, address, phone number, ERS account
number, and social security number with your submission. If you
need assistance, please contact our account managers at
1-800-377-1904.
- I am being billed
for the loan that was previously paid in full or discharged. What
should I do?
If you have proof that your loan
was paid in full or discharged, you should send a copy of that
proof to us.
Send the proof along with a cover letter
to:
Enterprise Recovery Systems, Inc.
2400 South
Wolf Road, Suite 200
Oak Brook, IL 60523
Be sure to
include your name, address, phone number, ERS account number, and
social security number with your submission. If you need
assistance, please contact our account managers at
1-800-377-1904.
- This loan has my
social security number, but not my name, and I did not sign a
promissory note for this loan. What should I
do?
This can happen if the social security
number is mistyped. Typically, you will be required to send us
photocopies of the following:
- Social Security Card
- Driver's license or government-issued ID card
- Passport or Birth Certificate
Send the required
documents along with a cover letter to:
Enterprise
Recovery Systems, Inc.
2000 York Road, Suite 114
Oak Brook, IL 60523
Be sure to include your
name, address, phone number, ERS account number, and social
security number with your submission. If you need assistance,
please contact our account managers at 1-800-377-1904.
- This loan has my
name, but not my social security number, and I did not sign a
promissory note for this loan. What should I
do?
This can happen if the borrower we are
trying to locate happens to have the same name as you. Please
kindly contact our account managers at 1-800-377-1904 and describe
your problem. You may be required to submit examples of your
signature if your date of birth matches that of the borrower, or
if you attended the school for which the loan was
borrowed.
- This loan has my
name and social security number, but I did not sign the promissory
note for this loan. What can I do to clear my name from this
loan?
This can happen if somebody else uses your
identity to borrower a loan. You may be required to submit
photocopied examples of your signature from around the time that
the loan was made (e.g., from tax returns for that year, driver's
licenses issued at that time, cancelled checks that you wrote at
that time). We will compare the signature on the promissory note
to the signature examples you provide.
Alternatively, you can provide proof that you
could not have attended the school for which the loan was made
(e.g., proof that you were employed or enrolled elsewhere, were
living in another location, etc.)
If you are unable to provide such proof, but
the signature is clearly not yours, you can provide an affidavit
from an independent hand-writing analyst.
- Is my loan
dischargeable since I was not yet 18 years old when I signed for
the loan?
Student loans are not dischargeable on
the basis of the borrower's age (per the Higher Education Act of
1965, as amended by the Higher Education Amendments of 1986, P.L.
99-498).
- The student for
whom the loan was borrowed is deceased. I was a cosigner for the
loan. Do I still have to repay the loan?
If the
borrower of a student loan, or, in the case of a parent PLUS loan,
the student for whose education the loan was borrowed dies, the
loan can be discharged (forgiven).
Send an original or certified copy of the
death certificate (must have the raised seal of the issuing
records office) to:
Enterprise Recovery Systems,
Inc.
2000 York Road, Suite 114
Oak Brook, IL 60523
Be sure to include your name, address, phone
number, ERS account number, and social security number with your
submission. If you need assistance, please contact our account
managers at 1-800-377-1904.
- I am permanently
disabled and cannot repay my student loans. What should I
do?
A student loan can be discharged (forgiven)
if either the borrower or the student for whose education the loan
was borrowed is 100% totally and permanently disabled. This
means a physician (either an M.D. or a D.O.) will certify that the
individual is unable to work in any capacity and will never be
able to work. It is important to note that:
- you may receive Social Security, VA or other disability
benefits and still not meet the definition of 100% total and
permanent disability
-
you may not have suffered from the
disabling medical condition at the time the loan was borrowed,
unless the condition has significantly deteriorated since then.
In other words, if the individual was already totally and
permanently disabled when the loan was borrowed, it cannot be
discharged for that reason.
If you believe you qualify for a disability
discharge you must complete, and your doctor must sign, a
discharge application form.
Note: In order to guard against fraud, we
will contact your doctor directly to confirm the nature and
severity of your disability if you apply for a disability
discharge. In addition, we may look for evidence that you are
gainfully employed.
You may request a copy of this
discharge application form by calling us at 1-800-377-1904 or by
calling the Department of Education at 1-800-621-3115.
Print out and complete the Total and
Permanent Disability Discharge Application form. Sign and date it.
Send the form along with a cover letter to:
Enterprise
Recovery Systems, Inc.
2000 York Road, Suite 114
Oak Brook, IL 60523
Be sure to include your
name, address, phone number, ERS account number, and social
security number with your submission. If you need assistance,
please contact our account managers at 1-800-377-1904.
- Why has I been
charged interest and other fees since I was not aware that I owed
this loan?
When you signed for your student
loan, it became your responsibility to let your lender know
whenever your address changed. If you failed to do so, the lender
or other agencies that have held your loan may not have been able
to reach you, but you are still responsible to repay the loan as
well as any interest that has accrued and any collection costs and
fees that have been added.
Certain debts may not be enforceable if the
lender fails to attempt to collect them for a period of time;
debtors may invoke a legal principle called the "defense of
laches". This defense may not be used against Federal student
loans.
Repayment
- Is it safe to make a
payment online?
Your payment information and
any other highly confidential information shall be transmitted
using SSL (Secure Sockets Layer) protocol. The SSL protocol is
used to encrypting information between your web browser and our
web server to prevent eavesdropping, tampering, and message
forgery. It is based on public-private key cryptography developed
by RSA Data Security and is a standard for electronic commerce.
- Can I pay my student
loan by credit card?
Yes, you can. To pay by
credit card over the Internet, simply follow this link:
Pay By Credit Card. You may also call us at 1-800-377-1904 to
make a credit card payment by phone.
- I do not have a
credit card. What other ways can I pay?
(a)You may make a check payment online. To do that,
simply follow this link:
Pay By Check. You may also call us at
1-800-377-1904 to make a check payment by phone.
(b)You may send a check or money order by mail to
the address shown below. Make your check or money order payable to
Enterprise Recovery Systems, Inc.
Enterprise
Recovery Systems, Inc.
2000 York Road, Suite 114
Oak Brook, IL 60523
Be sure to include your name,
address, phone number, ERS account number, and social security
number with your payment.
(c) You may make a
payment through Western Union Money Gram. Simply locate a
Western Union deliver point, Currency Exchange or banks, and the
payment will be wired to us within hours. For our Western Union
account information, please call 1-800-377-1904. Be sure to
notify us when you make a Western Union payment to ensure proper
credit to your account.
(d) You may make a payment
via a wire transfer from your bank account to ERS bank account.
For more information regarding our bank account number or to set
up an automatic monthly payment or ACH, simply call
1-800-377-1904. Be sure to notify us of your payment via
electronic transfer to ensure proper credit to your
account.
- What address do I
send my payments to?
Enterprise Recovery
Systems, Inc.
2000 York Road, Suite 114
Oak Brook, IL 60523
Be sure to
include your name, address, phone number, ERS account number, and
social security number with your payment to ensure proper credit
to your account.
- What are the
available repayment plans?
(a) Loan
Rehabilitation
For borrowers
with certain Federal Loans, loan rehabilitation may be an option.
Loan rehabilitation is the process of making twelve (12) voluntary
consecutive monthly payments that are both reasonable and
affordable. Upon satisfactory completion of twelve payments,
borrowers can have their loans taken out of default and have their
credit report repaired to reflect the current status of the loan.
You will then be eligible to have the loan purchased by a lending
institution. You will be able to repay the loan over an extended
period of time, and you will again be eligible for additional
Title IV student financial aid funds. For more information
regarding the benefits of the loan rehabilitation options, please
contact your ERS account manager at 1-800-377-1904.
(b)
Loan Consolidation
Student loan borrowers who have
multiple loans may want to consider the options of the Federal
Loan Consolidation Programs. Loan consolidation allows you to
refinance your education loans into one new loan with a single
monthly payment amount and a new repayment term. Even if you have
just one loan, you can also choose to consolidate it.
A
FFEL Consolidation Loan is designed to help student and parent
borrowers consolidate several types of federal student loans with
various repayment schedules into one loan. With a FFEL
Consolidation Loan, you will make only one payment a month. Under
this program, your consolidation loan will be made by a commercial
lender, credit bureaus will be notified that your account has a
zero balance, and you will sign a new promissory note that will
establish a new interest rate and repayment schedule. To receive a
FFEL Consolidation Loan, you must be in repayment on your
defaulted loan (that is, three voluntary, on-time, full monthly
payments). Depending on the balance due, the repayment period may
extend up to 30 years.
If you owe no other delinquent or
defaulted debts to the United States, you will again be eligible
for other federal funds, including FHA loans, VA loans, and Title
IV student financial aid funds.
Call ERS account managers
today at 1-800-377-1904 for more information on loan consolidation
programs.
(c) Extended Repayment
Options
Repayment terms toward the satisfaction of your
educational debt can be established through your ERS account
manager. Based upon your financial condition, your account manager
will establish repayment terms that best reflect your ability to
repay your debt. You may be required to complete a statement of
financial status. Contact your account manager at 1-800-377-1904
today to establish your repayment terms.
(d)
Deferments
For those federal loans that are not
in default, provisions are available to allow borrowers to defer
(postpone) their repayment. You may be eligible for Loan Deferment
if you meet one of the following criteria and your loan is not in
default:
- Enrolled at least half-time in an eligible institution
- Enrolled in a full-time course of study in a graduate
fellowship program
- Engaged in a full-time rehabilitation training program for
individuals with disabilities (if approved by the Department of
Education)
- Actively seeking, but unable to find full-time employment
(certain documentation is required; maximum of three years
eligibility)
- Based upon federal standards, undue economic hardship and
volunteerism as a Peace Corps volunteer
- Can I apply for
another student loan and go back to school if I repay my defaulted
loans?
Yes, you
can. It is now easy to restore your eligibility to receive
additional Title IV federal financial aid. Basically, your options
are:
- Repay or satisfy the loan in full.
- Make six agreed-upon monthly payments over a six month
period. Your payment amount must be approved in advance by the
Department of Education. Every qualifying payment must be timely
(received before the due date) and you cannot make all six
payments as a single lump sum payment. Once your eligibility to
receive additional federal financial aid has been restored after
making six consecutive monthly payments, you must continue to
make timely monthly payments to maintain your eligibility or
else it will be permanently lost until the debt is resolved
entirely. In other words, you may qualify for this program only
once.
- Consolidate your loan through loan consolidation programs.
- Rehabilitate your loan through loan rehabilitation programs.
Since defaulted student loans have no statute of limitations
for enforceability, you would remain ineligible for additional
federal financial aid until you complete one of the options
mentioned above.
Financial Hardship
- Hardship due to
offset of Federal Tax Refund, Social Security Benefits, or other
Federal Stipends
When a Federal student loan
goes into default it becomes due and payable in full immediately.
Before offsetting your Federal tax refund, we were required to
send you a letter giving you at least 60 days notice and allowing
you to avoid offset by either entering repayment or proving that
you do not owe the loan. If you failed to do either of these
things within the 60 day time period, then any Federal payments
owed to you, including tax refunds, become eligible for offset for
as long as you owe the defaulted loan. In most instances, these
offsets will not be returned to you. However, you may contact us
to discuss your circumstances and possibly negotiate to have the
offset reduced or stopped. You may be required to complete a
statement of financial status.
Injured Spouses
If you filed jointly with your spouse, the
entire refund, even the part belonging to the spouse who does not
owe the student loan, may be offset. The non-liable or "injured"
spouse may attempt to reclaim his or her portion of the refund by
filing an injured spouse claim form (IRS Form 8379) with the
Internal Revenue Service. You may download this form at the IRS
web site or may request one from the IRS by calling
1-800-829-1040. You also may be able to obtain the form at your
local library, IRS office or from your tax preparer.
Only the IRS will be able to answer questions about whether you
qualify for an injured spouse refund and how much you may
receive.
Earned Income Tax Credit
The earned income tax credit portion of your refund may
legally be offset in order to pay your defaulted Federal student
loan.
For more information, please contact our account managers at
1-800-377-1904.
- Hardship due to
Wage Garnishment
When a Federal student loan
goes into default it becomes due and payable in full immediately.
Before garnishing your wages, we were required to send you a
letter giving you at least 30 days notice and allowing you to
avoid offset by either entering repayment or proving that you do
not owe the loan. If you failed to do either of these things
within the 30 day time period, then your wages become eligible for
offset for as long as you owe the defaulted loan. However, you may
us to discuss your circumstances and possibly negotiate to have
the garnishment amount reduced. You may be required to complete a
statement of financial status.
For more information,
please contact our account managers at 1-800-377-1904.
- Hardship due to
unreasonable payment requirement
When a Federal
student loan goes into default it becomes due and payable in full
immediately, and we have the legal right to demand that you repay
the balance immediately or as quickly as possible. We may legally
demand that you attempt to borrow funds or sell some of your
assets in order to pay in full. However, you may provide proof to
us that you are unable to meet our demands, especially in the form
of a completed statement of financial status. We will gladly work
with you to determine the reasonable payment amount that reflects
your ability to pay. You should also understand that any payments
you make voluntarily while you are negotiating a payment schedule
will both reduce the amount you owe and will demonstrate that you
are acting in good faith.
For assistance, please contact
our account managers at 1-800-377-1904.
[Information Source: Department of
Education]
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