Tackling Student Loan Debt

[04PJ]

So when I was 18, I decided I wanted to attend school and all that good jazz. Five years later, I've got three defaulted loans for 6k and I've recently been garnished(taxes). So I contacted the US Department of Education to inquire more information about these loans and my options.

 

They told me I could make nine consecutive payments of $65 to get the loan out of default status. 30 days after the ninth payment, the defaulted loan would be completely erased from my credit history.

 

I currently have a score of 580ish, would having that account in good standing improve my credit score? I've also recently taken out a secured CC, would this help me raise my credit also.

 

Would paying the $65 a month be my best option? I don't have 6k to pay off the student loan, but I'd really like to get this smoothed out as I'm looking to purchasing a home for the first time later this year.

 

Sorry I've got so many questions and this topic is all over the place. I'd just like to get a kick in the right direction.

 

Thanks.

[zoomerpsu]

I definitely recommend you do this. I started my student loan rehab program March 2012, and completed mine this past December (9 payments + 1 "freebie" month). The loans were picked up by a new lender relatively quickly (SallieMae). Then, DOE deleted all negative payment history and showed the TL as Current/Closed. My payment was slightly higher ($605).. it was painful, but necessary. They're not going to go away/improve on their own. The sooner you start, the better.

 

In my case, they waived $18,000 worth of collection fees. My loan servicer was Action Financial.

Edited April 24, 2013 by zoomerpsu

[04PJ]

Thanks for the input, zoomerpsu.

 

I went ahead and started the program. After my 9th payment, filling out the rehabilitation program paperwork, and a lendor acquiring my loans. The DOE said they'll competely erase the accounts from my credit report.

 

Is there anyway to get collection accounts removed? I've got one that is paid/closed, but the company(Merchants Credit Guide) said they won't delete it from my account. It's years from falling off, so is there anyway I could possibly get that removed?