I have been reading alot of the posts here in the Student Loan Forum but just can't seem to find something that helps me understand what to do about a situation I find myself in.

I have been getting (over the years) bills from my Old University for a loan they gave me back in 1993. At one point, they had turned it over to a collection agency but I suppose they gave up and sent it back to the University. And about 5 years ago, they actually took my STATE tax refund (Never attempted to take my federal). But, i moved out of that state and that stopped.

Anyway, the bill is for $2,070.11 and $1,318.77 for a grand total of 3,388.88.

Okay, I am a little lost. If this was a federal loan, then wouldn't they have taken my federal tax returns all those years?

I understood it to be a loan from the University.

Either way, what is the best way to handle them? I have not spoken with them since 1995. But, I want to get this cleared up somehow ... and off of my credit report.

Can you make an offer to settle for $1,500 and get it all cleared up ... is there a way to just get this to come off my CR and be done with it?

How do formulate the plan is what I am after I suppose.

Any help would be appreciated as I have done a lot of work to get other stuff off of my CR and have made progress. But, this type of loan is different than all the others.

Thoughts?

Perkins loans are federally insured loans that originate from the school. Your state tax refund was the only refund taken because the school can only file with the state it is located in. However, if your loan is now that many years in default, your loan may well have been subrogated by the DOE. Subrogation will start the reporting cycle all over again.

Who is holding your loan now? If it is still at the school, there is no way that they will take $1500 to settle. With tight budgets nowadays, the loss is coming right out of their pocket. Plus if the account is assigned to a CA, they have to pay them as well. Regardless of who you end up paying, it will not come off your credit report until the reporting SOL is up.

What is the Statute of Limitations (SOL) of this type of loan? I thought these type of loans NEVER come off your report because they have no SOL?

Your other points are very much appreciated.

I am not sure about the Subrogation. I will have to research exactly what that entails. I do know that this has been on my report from at least 1997. Or, at least that is the first time I remember seeing it there. But, it could have been on there before that.

Thanks for your taking the time out of your day to help. It really is appreciated.

Okay, one slight twist to this story.

I had ordered a hard copy of my credit Report from TU last week and it was in the mail a little while ago when I checked it.

On the TU report, it says that the "Estimated date that this item will be removed: 12/2006"

First, I have been reading my rear end off and everything I have found (maybe looking in the wrong places or searching on the wrong terms) says that this should never come off my report. So, I am confused by what they sent.

Also, on the bill they sent me recently there was a message field which stated: " Your account has been accelerated. The Entire unpaid balance is now due and payable. Remit Immediatley." Accelerated? This has been in the works since 1993! I never read any of the other bills so many of them may have said that too but I do not know.

Okay ... could this be that they know that it is coming off the report and want to make a last ditch effort to collect. Or, maybe the reporting SOL is effective but not the collection SOL? UGGGGGHHHH. I hate not knowing what my rights are and it is my own fault.

I really wish this was a regular credit item as I would have a better idea of how to deal with this.

Credit reporting SOL starts from the date of last activity. For most student loan accounts, that is when you made the last payment. If you have never paid on this, it would be 7 years from the time that the loan became due. Due date is when the loan went into repayment, which is after your grace period and any period of deferment or forebarance.

When you default on a student loan, the balance is immediately accelerated. Collection costs are added on and the interest continues to accrue.

Is the loan still list by your school on your CR?? Again, if so you are risking the Feds stepping in and subrogating it. Subrogating is basically a hand slap to the lender...it happens with FFELP loans and Perkins loans. The Feds basically punish the lender for not collecting the debt by paying them off at a discount....i.e. you owe $4000, the school is only reimbused approximately 60%. The US Dept of Education collection division then takes over collection of the loan...and the 7 year reporting cycle starts again. You then become subject to wage garnishment, lawsuits and fed and state tax offset.

I do not remember ever paying on these two loans ... I did pay my other ones. These specific ones showed up a couple years (1993) after I got out of college. I don't recall ever paying on them other then when they took my taxes. Does that count for the date of last activity or is it when I actually paid? And how would one go about finding out when that date is?

If it is when I default on the loan that it is accelerated .. then why was not it accelerated years ago?

Yes, they are still listing it on my credit report. If the statute is really 7 years ... then it should NOT be on my report.

So, if I got it correct:

University A can hold my student loan since 1993 .... Be on my credit report since at least 1997 ... close the account in 11/2002 (according to the report I got today) and even though TransUnion says it will come off in Dec of this year. The Fed Government can come in pay the school off and it stays on my report for ANOTHER 7 years? Literally come in at any point? Or, just when it is on my report.

Do you get a notice BEFORE it is Subrogated?

I appreciate your paitence with me.

So, I guess I have these options:

Challange the entry on my report (which they will validate, cause I challenged it 3 years ago ... Credit repair company did it .. big mistake) and state it it outside the SOL and demand it be removed.

Pay them (Which will be almost impossible cause I just don't have the full amount right now).

Give up cause I do not see how to handle this.

Okay, last question cause I am sure I have worn on your nerves

If I work out a payment plan with them ... then the "date of last activity" would begin again ... even though according to TU it comes off my report in December. So, no matter what I do, it is going to be on my report for another 7 years ... is this correct? Or, can it be worked out that if I get this paid by Decemeber that they will let it fall off my report? I am just frustrated that it has been this many years and I can't get the stupid thing off my report. I do not mind paying them a payment plan as I am not a young stupid kid as I was back then and want to make it right. But, I see absolutley no value in paying anything if it is still going to be on my report as that makes future credit far more expensive in interest. And if it stays on my report, I would pay a higher percentage in interest irregardless of whether I pay them or not.

I just can't believe that if I pay them off over a several month time that this entry would still be on my report. Even if it has a balance of zero it still affects my credit score as well as the fact lenders see it and politley turn me down.

So, is that possible? Have you ever heard of it being done?

Perkins loans can be funky creatures and I have heard reports of schools restarting the clock with a payment plan. Regardless of what they do to your credit reporting line at this point in time, it will affect you a lot less than a judgement and a garnishment. A judgement garnishment is 25%. Admin wage garnishment is 15%...that one does not require a court order. Instead of focusing your energies on avoiding it, pay the damn thing!!

You can not be for real. This is not about getting something off your report, it's about avoiding things like Lynn has mentioned - administrative wage garnishment and/or judgment. If you think future credit will be expensive because you paid this off and it might reset the clock, you need to stop for a minute and consider how much a judgment is going to cost you. Or losing up to 25% of your paycheck to one form of garnishment or another.

You really need to get your head out of the sand and start paying attention to what you're being told. This board is not about ways to avoid paying your debt, and this forum in particular is about getting yourself right on the SLs and making sure they don't cause you anymore heartache and pain than they already are.

You should do a search and read about what avoiding your obligations when it comes to SLs does for you. It might open your eyes and make you understand that there is far more to credit and financial status than a decent interest rate.

I think you should go back up and read where I stated that I want to make this right. I realize that I am not the most prolific writer on these boards, but I did say that I wanted to make this right and will. However, I was hoping that there maybe a way of getting this off of my credit report because it has been on there and caused me enough damage over the last 9 years and now for most probably another 7 (Whether I pay them or they garnish ... either way it is another 7 according the logical conclusions of your statements).

Since my statement of wanting to make this right while at the same time trying to get this off my report somehow translate into me trying to avoid it; I have to surmise that I have either come to the wrong place to get others experiences and hopefully find a way of doing both (pay them AND get this off my report since it has been 12 years) or your not really an "EX Loan Collector" rather, quite possibly, a current one, your statement about "pay the damn thing" sure sounds very similar to a current one. Either way, your statement of "pay the damn thing!" was a rather inappropriate way of wording that statement. You could have simply said, " ...There really is no way to get out of the debt" (Which is not what I wanted to do ... my concern is the credit report and what options I had). Profainty wasn't necessary.


Thank you for what information you did provide.

Nothing could be further from the truth. Not that I have to justify anything to you but I havent collected a loan since 99. I am currently a special education kindergarden teacher and saponificator. If you had read the forum, the only thing that resolves student loans is paying them and time. You seem to come off as more concerned about your credit than the debt. You've obviously known about this for years and have chosen not to take care of it.

Yes, I was for real. For me, getting it off my report was of a great concern to me. It is no longer.

My apologies to this forum.

I did indeed find the information provided a little bit shocking. And, due to that shock I was venting a little bit of frustration and expressed some dismay. For my part, that was obviously inappropriate.

I did pay off both of my student loans when I got out of college. This one loan I have been talking about did not get paid. I will now. However, Since I had a little bit of time before I had to pay this, I was hoping to find a way of possibly paying it and getting this off my report. It is clear that this is not possible. I will simply find a way of pulling together the money and paying it.

A simple "There really is not way to get this off your report" would have shut me up.

Again, my apologies to this forum.

If you prefer to delete this thread or close it as it obviously does not belong here, I would have no objection.

Regards

netsuper, perhaps you haven't read the rules of this forum. I direct you to the post stickied at the top called The New Student Loan Forum World Order. You will find this particular section in those rules.



That means statements like this are not appropriate nor are they welcome.




I also told you to take care of this; would you like to tell ME that I sound like a collector? I will correct Lynn and anyone else I feel is out of line; I don't need you to do that. If you see something you feel is inappropriate, you can use the report button at the bottom of every post.

As for what you were saying in your last post, it sure sounded to me as if you were trying to beat the system, so to speak. If you bothered to do your homework here, you would have found many instances of the very same advice being given to many people. Seriously, stop worrying about future interest rates and take care of this problem. Or else you will suffer the consequences. And trust me, having been there myself, I can assure you the consequences are far more serious than an interest rate down the road.

I am not sure if I am answering your question or not but wanted to let you know that the last I checked, which was a while ago, if you are employed with a non profit organization, each year a certain portion of your perkins can be forgiven until eventually it has been forgiven 100%, and also teachers qualify.