Dear Dave: I have a student loan in default that is now being handled by a collections agency. They want me to pay the entire $20,000 now, or consolidate it with $16,000 in collection fees added. Are these my only options?
Dear Rebecca: There's no way I'd consolidate and pay $16,000 in collection fees. Right now, they're trying to bully you. They may eventually garnish your paychecks, but I think you can still work out something with these guys.
You'll have to repay the loan, and probably the interest and some of the late charges, but $16,000 is a bunch of crap. Don't run out and get another loan to pay it, but don't let yourself be blackmailed, either. You've made a mess by ignoring this for so long, so now you'll have to save every penny you can and start sending them substantial amounts of money each month.
Trust me, they'll take your payments and cash the checks. Hopefully, you can settle on a reasonable repayment structure and have this thing killed off in a couple of years.
http://www.idahostatesman.com/2015/02/07/3632691_dont-be-bullied-by-collections.html
