Post Rehab reporting for dummies

[IheartLoopHoles]

I feel really lame, as the questions I am about to ask seem like common knowledge to everyone else.

 

Ok, first of all, the guarantor, that is the DOE right? (I had a federal loan). Right now, I have one DOE loan showing as "in collections" with a zero balance. Then, once it went to collections it branched off into all of the individual loans I took out, so now I have the original loan plus like, 5 collections.

 

After rehab, how will all of these update?

 

Will the original DOE tradeline show paid? Will all of the spawned tradelines go away?

 

When the new loan people buy it, will they start reporting?

 

I may be confusing myself. Help is SO appreciated. Thanks!

[hardpull]

Will all of the spawned tradelines go away?

 

After 7 years they will.

 

When the new loan people buy it, will they start reporting?

They are supposed to.

Edited March 20, 2008 by hardpull

[IheartLoopHoles]

The spawned tradelines should updated to good status though, right? What happens to them when the new company starts reporting?

[Stryker]

AFAIK, the DOE is NOT the guarantor. In my case, it was a state agency, and they served as the guarantor of my federal student loan.

 

The "spawned" TLs will be made righteous. The original, defaulted TLs will probably lose the defaulted tag, but I believe the lates and such will remain.

 

Some vets here will correct me if I am wrong. Hopefully, this serves as a bump at the very least.

[ziggypop]

AFAIK, the DOE is NOT the guarantor. In my case, it was a state agency, and they served as the guarantor of my federal student loan.

 

The "spawned" TLs will be made righteous. The original, defaulted TLs will probably lose the defaulted tag, but I believe the lates and such will remain.

 

Some vets here will correct me if I am wrong. Hopefully, this serves as a bump at the very least.

 

Most of the time, this is true, but if they were Direct Loans (i.e., your lender was the DOE in the first place), then they are the lender and the guarantor. That was my situation. So, I had the original TLs from DOE that defaulted, with a new TL for each semester's distribution. Then, when I defaulted, those were all updated to say "transferred to government" (or something like that -- I don't remember the exact language), and I had another DOE TL that had the full defaulted amount -- essentially, the "guarantor's TL."

 

OP, that's what's confusing me. It should be that the original TLs were the little, "per semester" loans, and then there should have been one single TL with the guarantor, rather than the other way around. The guarantor's reporting is the only thing that has to be updated to remove the default notation, although they do not have to remove the lates. If you did have a Direct Loan, that's generally the best one to have. Usually, they update *everything* (i.e., original TLs plus the "guarantor" ones) to remove the default notation and I think they take all of the lates off, too. They also remove most/all of the collection costs and penalty fees that may remain after rehab, if you weren't able to repay them all during rehab. If your original lender was a source other than with Direct Loans, the lender's TLs will not be changed; only the guarantor. OP, you didn't say how long ago you originally defaulted, but if it was a long time ago, it could also be that the guarantor filed a claim with the DOE after they couldn't collect and now the DOE holds it again, which would look like the DOE was the guarantor. That's another trigger for re-reporting, as in, it starts the 7 year clock all over again, just like defaulting and having the loan go back to the guarantor does.

 

Hope this helps!! Good luck!

[IheartLoopHoles]

All great information, thanks you guys.

 

Yes, Direct Loans was the original lender, so it sounds like there may be some hope for me, yay!

 

I Hope they update to take everything off! The loans are from 2003-2005, so relatively recent.