Consumer complaint received 2016-06-09
Product: Debt collection — Federal student loan
Issue: False statements or representation — Attempted to collect wrong amount
Company: Account Control Technology, Inc. (CO)

After leaving school & subsequently defaulting on my student loans 10 years ago, I recently sought to begin repaying my student debt. Per ed.gov website instructions I contacted student loan manager at the school holding the debt on my Federal Perkins Loan, who then referred me to the collection agency now responsible for resolving the [ XXXX XXXX ] debt. The collection agency in charge of my Perkins Loan insisted that in order to resolve the Perkins Loan [ {$7600.00} ] debt I must " Consolidate '' all of my [ other ] outstanding defaulted student loans with them. I declined and specifically requested to " Rehabilitate '' only my defaulted Perkins Loan with this agency now in charge of the Perkins Loan debt. The collection agency refused to offer me " Rehabilitation '' on my Perkins Loan at all, and again insisted that my only option was to " Consolidate '' the debt. I declined, and that was the end of the conversation. 

Immediately following that phone conversation I emailed the student loan manager at the school and advised her of my concerns that the collection agency was being less than honest about my repayment options, she advised me that although the agent I spoke to was incorrect about my option to " Rehab '' the loan, the agency was trustworthy. 

One day later the collection agency called me back and I was advised that in order to " Rehab '' my Perkins Loan I must accept a minimum payment of $ XXXX/month. I declined again as I simply can not afford that payment. 

Again I immediately contacted ( by email ) the student loan manager at the school explaining that I have been out of work for an extended period of time and I can not afford such a high payment, and requested an appeal or other process to reduce what I am being told is a mandatory minimum payment to " Rehabilitate '' the Loan. The student loan manager emailed me back stating that the collection agency is correct, the minimum payment possible in order to " Rehab '' my Perkins Loan is $ XXXX/mo. 

I researched the issue of repaying defaulted Perkins Loans on the Dept. of Education website here : XXXX ( page XXXX-XXXX ) and found that the DOE requires schools to offer repayment of defaulted Perkins Loans " sufficient to satisfy the outstanding balance on the loan within a 10-year repayment period. '' This was directly contradicted to me several times in email & phone conversations that I had with both the collection agency and the university student loan manager. 

Further more, on the Consumer Financial Protection Bureau website " Repay Student Debt '' page here : XXXX it states that defaulted Federal Student Loan borrowers `` have the right to set your payments based on how much money you make. Your payments can be as low as {$5.00} per month if you are unemployed or have very little income. Your debt collector is required by law to offer you this income-driven rehabilitation payment plan. '' I realize this ( $ XXXX/month ) policy may not be specific to Perkins Loans. 

My complaint is that a ) the collection agency has been intentionally dishonest regarding my repayment options ; b ) both the collection agency and the university 's student loan manager continue to insist to me, on the phone & by email, that my minimum " Rehabilitation '' payment must be significantly larger than that indicated by the DOE 's published regulations regarding defaulted Perkins Loans, despite knowing that such payments would cause significant " hardship for the borrower '' [ me ], and in direct contravention of the DOE guidelines ( see XXXX page XXXX-XXXX ).