Due to unfortuante financial circumstances (medical bills, divorce, bankruptcy, etc.), my student loan went into default. It was eventually handed over to Pioneer Credit recovery. There were two different federal student loans. I was contacted by a representative of Pioneer to make payment arrangements on my student loan and was given a very affordable $32.95 per month to make payments on a $4,500 loan. This was all based on financial statement information I provided to them.
However, on my larger loan, approximately $19,000, they have been unwilling to come to a reasonable payment arrangement. First they suggested $400/month, then they said they could go no lower than $302/month. Then they said $232/month. Then they said they are not allowed to go below $192/month. They one time said they are not allowed to go below 1% of the balance of the student loan. They also said that the federal government would go after 15% of my disposable pay. They then said after constantly putting me on hold that they are not allowed to go below the 1% threshhold.
They keep making references to the fact that they are consulting with the U. S Dept. Of Education and this is the lowest amount they will allow me to go. However, everyone I talk to at the U.S. Dept of Education says that it is the sole discretion of Pioneer on what payment arrangements they make. Despite the fact that my financial statement for my basic living expenses only show about $75/month available to spend, they will not budge. I was told that my available monetary funds is not a factor in determining this amount. Why do they request it if this is the case? I have gone ahead and chose to send them money in the amount of $50/month to show good faith in trying to repay.
Does anyone know if undue financial hardship due to these payment arrangements allow me to get lower payments as I should? I was also told that I need to manage my expenses better. Like I should cut out such foolish spending on items such as food, clothing, and utilities. I guess my daughter doesn't need to eat. I also told them that making such payments would cause me to default on my car payments and I will then lose my job due to lack of transportation therefore no money would come in to make payments. There answer was, we will just garnish your wages when you get another job. Is this making any sense?
Someone please respond!!!
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