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Hello, and thank you so much for your time.

For seven years I've been paying a collection agency 300.00+ a month on a "purchased" combined student loan that I had previously defaulted on. When I started paying on this the principle was $24,000.00. Now, after paying them $19,000.00 over the course of 7 years, the principle is $29,000.00!!!.

The interest is 8% plus they take 18% collection costs out of every payment. They assured me several years ago that there would be no collection costs and I foolishly took them at their word... The thing is, this is nowhere to be found on my credit reports!?!?

My parents have offered to loan me the money at 6% to pay this off, so that I can avoid paying further collection costs, and I'd much rather pay them back than pay this collection agency.

My questions are:
1)Why is this not on my credit reports?

I'm worried that creditwise doing ANYTHING might be worse than doing nothing, but I can't just keep paying into this hole forever. My wife and I both teach in the South, so there is not much extra money.

Also, I recently requested and received a statement from the collection agency showing that the payoff amount is about $30,000.00 including collection costs and interest, but with a footnote that says there might be further collection fees and to check with them before paying it all off. I'm scared they're going to try to add 18% to the principal if I give them a lump sum, so...

2) Should I make an offer to pay, say 60% of the total before I let them know I'm interested in paying this off? Is this feasable as it is a purchased loan?

Thanks again.
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