In a couple of weeks, I'll be making my last rehab payment. My loans are all Direct Loans with US DOE. The payments are already going to them (I think -- the checks are made out to them anyway), but the penalties are all supposed to go away, my credit cleaned up, etc.

Who should I contact about this? Clearly, the CA will be useless on this front, and I doubt it will happen automatically.

I believe you will need to call whoever holds the loans and ask about consolidation. DO NOT stop paying the current holder of the loans, though, until your paperwork comes through and you are informed to start making payments to another entity.

Congratulations on finishing up your rehab!!

DOE holds the loans. And I don't want to consolidate (my interest rate is guaranteed at 4% already, so it would just go up). I guess I just want my credit cleared up and the penalties removed.

I guess I'll have to call DOE.

Actually you should be contacting the CA to get the timeline for the rehab. They are the ones who will initiate it.

See, obviously I'm confused. So I do have to contact the CA? What should I be telling them to do?

Last May I paid my 12th rehab payment to the CA. After about 2 weeks, I called to see what the status was and they said that they had sent the paper work to the new lender about the completion of rehab and will wait their approval. Until that happens, you must continue to pay the CA.

I paid the CA my 13th payment the next month and then about a few weeks later, I got the letter from the new lender stating they had purchased it.

In the meantime I disputed on my CRs the default notation from the guarantor and got all default notations removed because I am impatient by nature and could not wait for 30 - 90 for these defaults to be deleted. I am not sure if this will work for everyone, but for me it did. I just wanted to get the SL defaults removed.

Now my CR is stating that my student loans are paying as agreed.

Well, I won't have a new lender, since, as I mentioned I have Direct Loans. I'll just keep sending my payments to the same address. I make my payments to DOE, not the CA already, though the CA is connected somehow.

After I made my final rehab payment, I just wrote a letter to the main contact address for DOE Direct Loans that's on their website. The CA is not reporting, it's the DOE. So DOE is the one that needs to clean up my reports. I outlined the payments I made and the dates and included some documentation from my BillPay site that showed this (I don't get cancelled checks). I also told them what I expected and by when I expected it done (reports cleaned up and confirmation to me within 30 days, etc.)

Several days later I got a letter in the mail saying, you've made eleven payments after the next one, you're rehabbed, call us. We're on the same schedule, it just took them so long to send out the letter, I didn't get it until after #12.

We'll see what happens in the next couple of weeks.

I Just finished mine on Aug 1 and I received the letter that they recieved my 12th payment. The CA told me just to wait for the letter from Direct Loans. Do you think I should wait for them to contact me or should I keep sending the CA payments?

A call never hurts. Staying in touch with them is always a good idea in case of glitches!

And keep sending payments till you KNOW your loan has been transferred.

Congratulations!!

Thanx LynnInMN and TxQuiltGirl!!! How many points have u heard been raised after a loan rehab??

It's TOTALLY a YMMV thing. There's no way to predict. It really depends so many factors (how old the default was, how many other "baddies" you have, how many other accounts you have, the age of your other accounts, the types of your other accounts, etc.) that it's completely different for every person. Some people's have gone up quite a bit (50 points or more) while others have seen very little change.

Hope this helps (such that it is!!). Good luck and congrats for finishing rehab!