we asked about a loan Rehab program and was sent papers on Consolidation Loan. The papers say once the balance is paid in full...all negative info will be removed from credit report.

obviously we would prefer to go the loan rehab route....but can one loan rehab with direct loan ?



Thanks !

Is your loan in default?? Doesnt sound like it as you wouldnt be working with Direct Loans.

According to the credit report...loans are in default. When primary lender was called they transfered the call to Direct Loans and they sent paper for a consolidation.

paperwork didn't mention an amount...so we are waiting to call back on Monday to inquire about a Rehab program. we just want to gather a little info prior to the call.

Any comments / Suggestions are appreciated..


Thanks !

Who is you loan holder right now?? You have to do the rehab thru them, not Direct Loans.

Daddy O

It sounds like you have a CA that is trying the quick route to getting paid. As Lynn stated, you have to rehabilitate through whomever currently holds your loans. What the CA is trying to do is have you consolidate while in default. The normal method for doing that is to get you to consolidate with Direct. The payments will be income contingent, Direct is the only servicer that is allowed to offer this particular repayment program. However, the only way your default notations would be removed would be because they are more than 7 years old. What I mean is that after you consolidate the 7 year clock would start. So while the CA is technically not lying to you, they are not being honest with you. The best and fastest way to have student loan defaults removed from your credit report is through rehabilitation. All CA's are required to offer it though they are not required to bring it up first. I would definitely recommend that you again contact the CA and speak with a supervisor and say that you are not interested in consolidation but only in rehabilitation. Once you have gotten that first step out of the way come back for further reinforcement and advise.


fla-tan

Thanks for the advice my friend !

What is different about student loans which causes this to happen? I had three student loans declared in default while I was in school. They became delinquent in August 1999. They are listed on my credit reports as "closed" and "collection account". I paid them off earlier this month, because I wasn't allowed to rehabilitate them. Any other debt placed for collection would report for 7 years from the last delinquency not brought current, and paying the collection wouldn't restart the reporting clock. I was assuming these would drop off next year. Why would a student loan be any different from a credit reporting standpoint?

What were the reasons for not allowing you to rehab ?