Forebearance

[Sanitizer]

Does anyone know the answer to this?

[Cheech]

Link to duplicate post - http://creditboards.com/forums/index.php?showtopic=86411

 

In my personal experience, as long as a student loan is reporting as a positive tradeline (whether that be paid as agreed, deferred, or in forbearance), changes in that status (from one positive category to another) generally does not have a major impact on your FICO score. YMMV.

[Sanitizer]

1. So, how do you know you're in default?

2. I know what it means to default, but w/ respect to SL's, does default mean that the GOV steps in, wages are garnished, lawsuits are threatened?

3.I have a spotty history with several lates, as late as 180, but none beyond that. Did I "officially default"?

4. And do I need to consider rehab? What would that do for me? (Most of my problems TL's for SL's are nearing (or at) the 7 yr mark. The newest TL's have some negatives, but the others are falling off.)

[Cheech]

Bless your heart, Sanitizer!!! I know this forum is nowhere near as active as the credit forum, but I think it's an awesome resource of info about student loans - sure don't know of anything else like it. We have so many awesome regular posters here who really have a ton of knowledge. We're very lucky that they've stuck around and help so many people.

 

OK, as promised - answers to your questions, with the caveat that I'm not the end-all be-all expert. I have gone through the student loan wringer and I just read and research a lot... but I'm sure others here will chime in with contributions.

 

1. So, how do you know you're in default?

I think you are in default once you are 270 - 330 days late on your loan. Somebody correct me if that's wrong. Oops OK, that's right - here's a link with full details about it - http://www.ed.gov/offices/OSFAP/DCS/default.html

 

2. I know what it means to default, but w/ respect to SL's, does default mean that the GOV steps in, wages are garnished, lawsuits are threatened?

Yes, that is a possibility. Your loans could be turned over to a CA to collect too.

 

3.I have a spotty history with several lates, as late as 180, but none beyond that. Did I "officially default"?

 

Hahaha - you'd know if you did - trust me on that one. 180 days is bad, but it's not yet fully defaulted. Plus you can't get a forbearance if you are in default, and you do have a forbearance, ergo you aren't in default.

 

4. And do I need to consider rehab? What would that do for me? (Most of my problems TL's for SL's are nearing (or at) the 7 yr mark. The newest TL's have some negatives, but the others are falling off.)

 

Rehab is only for loans that are currently in a default status (as in - with a CA, or your wages are already being garnished). Since you are in forbearance, then you have permission to not be paying right now. They know you aren't, so they aren't sending a CA after your butt. So you aren't eligible for rehab.

 

(Note to newbies - don't default on purpose just to get in rehab. It is a God-send, but it is a year or more of purgatory. It is not an easy road to follow, for sure.)

 

As for your negs nearing the 7 yr mark, they'll be gone soon so be happy!! As for any recent negs... well, some have had mixed success with tradeline disputes or goodwill requests. I think generally, you'll have more success with a goodwill request if you are keeping in touch with the lender/guarantor and paying and trying to meet your obligations. There's no guarantees there (well are there any in life really?), but it's worth a shot.

 

Well gosh you sure had a laundry list... lol. I hope I answered your questions, or at least gave you food for thought.

 

Here's another good link about default and rehab - http://www.ed.gov/offices/OSFAP/DCS/repaying.html

[ziggypop]

I have NO idea why they do this, but as an FYI, when I was still technically in repayment (as in, before I defaulted, but after I'd really kind of stopped paying!!) with my Direct Loans and was dealing with them as my lender, I found out that they use the term "default" in two different ways. I was "only" about 90 or 120 days late, so not late enough yet to REALLY have defaulted, and when I went to my online account page, it had my loans marked as "in default." When I called the DOE, they said "oh, that's just what we call it; that's not really the same as actual default."

 

Bizarre, I know, but wanted to give you a heads up that apparently, at least with Direct Loans (and this was a few years ago, so maybe, hopefully, they've changed), there's default and then there's default!

[Sanitizer]

Bless your heart, Sanitizer!!! I know this forum is nowhere near as active as the credit forum, but I think it's an awesome resource of info about student loans - sure don't know of anything else like it. We have so many awesome regular posters here who really have a ton of knowledge. We're very lucky that they've stuck around and help so many people.

 

OK, as promised - answers to your questions, with the caveat that I'm not the end-all be-all expert. I have gone through the student loan wringer and I just read and research a lot... but I'm sure others here will chime in with contributions.

 

1. So, how do you know you're in default?

I think you are in default once you are 270 - 330 days late on your loan. Somebody correct me if that's wrong. Oops OK, that's right - here's a link with full details about it - http://www.ed.gov/offices/OSFAP/DCS/default.html

 

2. I know what it means to default, but w/ respect to SL's, does default mean that the GOV steps in, wages are garnished, lawsuits are threatened?

Yes, that is a possibility. Your loans could be turned over to a CA to collect too.

 

3.I have a spotty history with several lates, as late as 180, but none beyond that. Did I "officially default"?

 

Hahaha - you'd know if you did - trust me on that one. 180 days is bad, but it's not yet fully defaulted. Plus you can't get a forbearance if you are in default, and you do have a forbearance, ergo you aren't in default.

 

4. And do I need to consider rehab? What would that do for me? (Most of my problems TL's for SL's are nearing (or at) the 7 yr mark. The newest TL's have some negatives, but the others are falling off.)

 

Rehab is only for loans that are currently in a default status (as in - with a CA, or your wages are already being garnished). Since you are in forbearance, then you have permission to not be paying right now. They know you aren't, so they aren't sending a CA after your butt. So you aren't eligible for rehab.

 

(Note to newbies - don't default on purpose just to get in rehab. It is a God-send, but it is a year or more of purgatory. It is not an easy road to follow, for sure.)

 

As for your negs nearing the 7 yr mark, they'll be gone soon so be happy!! As for any recent negs... well, some have had mixed success with tradeline disputes or goodwill requests. I think generally, you'll have more success with a goodwill request if you are keeping in touch with the lender/guarantor and paying and trying to meet your obligations. There's no guarantees there (well are there any in life really?), but it's worth a shot.

 

Well gosh you sure had a laundry list... lol. I hope I answered your questions, or at least gave you food for thought.

 

Here's another good link about default and rehab - http://www.ed.gov/offices/OSFAP/DCS/repaying.html

<{POST_SNAPBACK}>

 

Thanks Cheech! Sorry for the long delay in expressing my gratitude--you're awesome!

[Tequilarose]

Hi Everyone -

I'm new to the SL forum, but it's helpful so far

Let me get this straight though, if you are in forebearance, you just have to wait it out until the lates drop off? (Aside from trying the goodwill letters).

I have a SL w/ WF and I just made a payment to keep it from going into default. They granted a 6 mo. forebearance, but I will keep making payments to get the "past due" amount corrected.

What type of impact will this have on my credit scores? Will it continue to report as late until I get that past due paid down, or because I'm in forebearance, will it report as "OK"

Thanks for the help!