Consolidated instead of rehabbed - help!

[clueles1]

Hi Folks,

I defaulted on my loans and then Edfund contacted me for payment. I was paying an outrageous amount per month to them for a period of time (I think it was 12 mos) because they tacked on collection fees. After the 12 months, I was eligible for Consolidation though DirectLoans (William D.Ford). That made my monthly payments much lower.

 

I called Edfund today to verify that my loans had been rehabbed and they told me that they only see record of me consolidating, which also takes the loan out of default status. They are reporting the loan as a Paid Collection Account.

 

Please forgive the newbie question - does this look really bad on my report? What can I do to make this better?

 

Thanks!

Wendy

[ffemtreed]

there need not be a formal agreement to rehab the loans.

 

if you can prove that you sent 12 on time VOLUNTARY payments that where of a satisfactory amount (they told you how much to send) then your student loans where rehabbed.

 

I would get a copy of the Higher education act, outline the rehab laws and photocopy your 12 checks and send that to them.

[ffemtreed]

here is the link to the 1998 version, not sure if there is an update, still searching.

 

 

http://www.ed.gov/policy/highered/leg/hea9...a98/sec464.html

[dd135]

`(A) IN GENERAL- If the borrower of a loan made under this part who has defaulted on the loan makes 12 ontime, consecutive, monthly payments of amounts owed on the loan, as determined by the institution, or by the Secretary in the case of a loan held by the Secretary, the loan shall be considered rehabilitated, and the institution that made that loan (or the Secretary, in the case of a loan held by the Secretary) shall request that any credit bureau organization or credit reporting agency to which the default was reported remove the default from the borrower's credit history.

 

My student loans are in Ch 13 now - from reading this paragraph it sounds like 12 consecutive payments through a Ch 13 plan would also qualify?