Cosigner on school loan in default

[WilliamKF]

What is the name of your state? CA

Hello,

My step son has defaulted on three school loans for which I was cosigner. I received no notice, and had no chance to keep it out of collections. Debt collector has added $1,763 to each loan of $5,000 for their costs.

I got copies of 3 promissory notes which state:

For value received, I promise to pay to "Original Lender Here", or order, located in San Francisco, CA, (or such other address as designated by the lender) the sum of Five Thousand ($5,000) Dollars, plus ...

My question is does the words "or order" mean that the debt can be assigned to a collection agency.

I'd like to get the loan out of collection and pay directly to the original creditor and avoid the extra fees.

Seems reasonable to me since I had no notice till it was considered in default.

Thanks.

-William

[seniorjudge]

...My question is does the words "or order" mean that the debt can be assigned to a collection agency.....

Yes, those are the magic words that make the note negotiable.

[WilliamKF]

What do you mean by "make the note negotiable"? That sounds to me like the debt can be sold. To me assignment is something very different, which is the case here, the debt is being attempted to be assigned to the debt collector.

Thanks.

[boswd]

Yes they can give it to a collection agency. And they yielded the most power of any CA. Meaning they don't have to go through the whole court process of seizing you bank accounts or garnish wages. They can just do it.

Don't fight whether or not they can, because they can. You need to get your defaulted student loan out of collections immediatly.
Go to this web site .[url]http://www.ed.gov/offices/OSFAP/DirectLoan/index.html[/url]
Go under contacts and call a rep. This is the William D Ford Federal Loan Program. You are going to want a consolidate loan program. The rep will guide you through it. They will buy out your current defaulted loan from the Collection Agency and it will belong to the Federal Gov. made payable to the US Dept. of Education. This program specializes in getting loans out of default and out of the hands of Collection agency's.
You will get a much more reasonable payback options and no huge down payment needed. But you must act quickly because this process takes up to 90 days to complete but the CA once contacted by the Dept. of Education cannot continue collection process, but do it now.
Good luck

[WilliamKF]

This is not a normal school loan, it is through a third party non-profit foundation. I'd like to pay the foundation, but not the CA since they mark it up by 25%.

[debtcollector`]

Originally Posted by WilliamKF

This is not a normal school loan, it is through a third party non-profit foundation. I'd like to pay the foundation, but not the CA since they mark it up by 25%.

Sucks to be you then. They'll keep adding every penny they are entitled to until it is paid.

DC

[boswd]

Originally Posted by WilliamKF

This is not a normal school loan, it is through a third party non-profit foundation. I'd like to pay the foundation, but not the CA since they mark it up by 25%.

Most student loans in the beginning are not Federal loans,most are done through the persons bank or other lending institutions. Mine for example was made through my local bank and Sally Mai, you should still be able to qualify for the William D. Ford Direct loan. They buy back student loans that originated from banks and other such instituitions whether they are in collections, defaulted etc. . Once approved it will become a federal loan payable to Us Dept. of Education. Still go to that website and get the contact number and call them. Let them advise you.

[WilliamKF]

I contacted the William D. Ford Direct loan center by phone and they stated that since the loan is not a federal loan, it is not eligible. They know it is not federal since there is a co-signer, no federal loans have co-signers, either the parent or student signs, not both as is the case for this loan.

[boswd]

Hmmm that does stink because they offer the best options.
Try this website and see if you qualify here. They are very reputable and if you don't qualify they should be able to advise you on who can.

[url]https://www.studentloansolutions.com/default.aspx[/url]