Student loans

[pixeltwistr]

First of all I live in North Carolina but the student loans are from Washington State where I lived at the time.
My loans are currently in default. The collection agency just sent me some papers to sign The 1st one is a repayment plan selection and income contingent is already checked, the 2nd one is authorization for them to get my tax records,3rd is a promisory note, it says i promise to pay the USDE all sums dispersed under terms of this note to discharge my prior loan obligations, plus interest and other fees that may become due as provided in this note. And if i fail to make payments when due i agree to pay all collection cost including but not limited to atty fees and court costs. Also if any collection costs are currently owed they will be added to the consolidated loan. It also says: At the option of ED , the entire unpaid balance shall become immediatly due and payable when either(1) I make false representation that results in my recieving a loan i am not eligible for, or (2) I default on the loan. Default = (1)I fail to pay entire unpaid balance after ED has exercised its option under the preceeding paragraph or (2) I fail to make installment payments when due.
I believe it says that once i send these papers back signed I can request deferrment.
I explained to the lady from the collection agency that i am in dire straights right now financially which is why she sent me these papers, and she told me they would put it in deferrment to be reviewed every six months if i sent back these papers signed. Is it in my best interest to sign these papers or not? What will happen if I don't? If they then take me to court won't I be ordered to pay their court costs and atty fees anyway? It seems like I should sign them but in the back of my mind I keep thinking they ARE a collection agency and are probably not looking to help me as much as themselves.
I am just totally confused on wether signing these papers is a good idea or not can anyone help clear this up a little for me?
BTW the loans were originated through Sallie Mae...the collection agency is Northwest Education Loan Association and the lady I spoke to said NELA is a subsidiary of Sallie Mae don't know if that makes any difference or not...
Thank You for any help
Pixeltwistr

 

[jessica143]

I don't believe that they are misrepresenting themselves when they say they're a subsidary of Salli-Mae, and are probably more trustworthy than your run of the mill collection agencies. It's not uncommon to request deferments on a student loan (there are several differant kinds of deferment), and if your financial situation is as dire as you say, you probably could have applied for one before you went into default. In my experience, when dealing with your lender for student loans, they're usually pretty helpful and try to work with you. I would go ahead and sign the paperwork and request and "economic hardship deferment". By the way, are you still in school or planning to go back? If so, two things : 1. If you don't pay your student loan you probably won't be able to take out another one at a later time, and 2. While in school at least half-time you're eligable for an "in-school deferment". This is indefinate, as long as you remain in school at least half-time.