Full Version: consolidating loan in default made by NYHESC
Last week I applied like crazy trying to consolidate my defaulted loan made by new york state higher educational services corporation, a guarantee agency. I was told that it is against federal law for a loan in default to be consolidated. Is this true?
QUOTE(ctonjes @ May 29 2006, 05:59 AM) 
Last week I applied like crazy trying to consolidate my defaulted loan made by new york state higher educational services corporation, a guarantee agency. I was told that it is against federal law for a loan in default to be consolidated. Is this true?
WQho were you apply to and who told you this garbage?? If has never been against the law!
Here is what I was told
-----Original Message----- From: Consolidations To: Sent: 5/25/2006 2:20 PM Subject: Response to Your Request Thanks for contacting Student Assistance Foundation. We are happy to be of assistance. We researched your loans on the NSLDS federal website and have determined that your loans are in a default status. Since federal regulations do not allow the consolidation of defaulted loans, we are unable to proceed with a consolidation for you. In order to include defaulted loans in your consolidation, those loans must be rehabilitated and the guarantor must agree to release them. You will need to contact the guarantor of the defaulted loans, complete any required rehabilitation payments, and then request a consolidation. If you have loans that are not in default, we can consolidate those immediately if they are eligible. Then we can either add the defaulted loans if they are rehabilitated within 180 days of the consolidation, or do a new consolidation when the defaulted loans can be purchased. If you have any additional questions, please do not hesitate to email or call us at 800-852-2761, ext 9750. We look forward to working with you. Sincerely, Geoff Jackson Loan Consolidation Counselor
-----Original Message----- From: Consolidations To: Sent: 5/25/2006 2:20 PM Subject: Response to Your Request Thanks for contacting Student Assistance Foundation. We are happy to be of assistance. We researched your loans on the NSLDS federal website and have determined that your loans are in a default status. Since federal regulations do not allow the consolidation of defaulted loans, we are unable to proceed with a consolidation for you. In order to include defaulted loans in your consolidation, those loans must be rehabilitated and the guarantor must agree to release them. You will need to contact the guarantor of the defaulted loans, complete any required rehabilitation payments, and then request a consolidation. If you have loans that are not in default, we can consolidate those immediately if they are eligible. Then we can either add the defaulted loans if they are rehabilitated within 180 days of the consolidation, or do a new consolidation when the defaulted loans can be purchased. If you have any additional questions, please do not hesitate to email or call us at 800-852-2761, ext 9750. We look forward to working with you. Sincerely, Geoff Jackson Loan Consolidation Counselor
They are full of shit!! You do not have to rehab first.
From the Federal Student Aid site.
My credit record is tarnished because of my defaulted student loan. Is there anything that I can do to improve my credit record?"
Failure to repay your defaulted student loan can be damaging to your credit record. In fact, consumer reporting agencies may continue to report an account for 7 years from the opening date. However, there are several things that you can do to at least partially, and in some cases, fully restore your credit record. Your options for bettering your credit report include: repay or satisfy the loan in full; consolidate your loan through the FFEL loan consolidation program or the William D. Ford Direct Loan Program; or rehabilitate your loan through our loan rehabilitation program.
Who was your lender(s) prior to defaulting? If you had a single lender such as Sallie Mae you must use them. The only other option you would have would be consolidating with Direct Loans.
From the Federal Student Aid site.
My credit record is tarnished because of my defaulted student loan. Is there anything that I can do to improve my credit record?"
Failure to repay your defaulted student loan can be damaging to your credit record. In fact, consumer reporting agencies may continue to report an account for 7 years from the opening date. However, there are several things that you can do to at least partially, and in some cases, fully restore your credit record. Your options for bettering your credit report include: repay or satisfy the loan in full; consolidate your loan through the FFEL loan consolidation program or the William D. Ford Direct Loan Program; or rehabilitate your loan through our loan rehabilitation program.
Who was your lender(s) prior to defaulting? If you had a single lender such as Sallie Mae you must use them. The only other option you would have would be consolidating with Direct Loans.
new york state higher educational services corp
QUOTE(ctonjes @ May 29 2006, 10:47 AM)
new york state higher educational services corp
No, NYSHESC is your guarantor, not your lender. Somebody or some lender defaulted you back to them.
Did you ever look on NYSHESC website??? There is a whole page on consolidation of defaulted student loans.
(Google is a wonderful thing.......)
QUOTE(LynnInMN @ May 29 2006, 01:42 PM)
QUOTE(ctonjes @ May 29 2006, 10:47 AM)
new york state higher educational services corp
No, NYSHESC is your guarantor, not your lender. Somebody or some lender defaulted you back to them.
Did you ever look on NYSHESC website??? There is a whole page on consolidation of defaulted student loans.
(Google is a wonderful thing.......)
Yes, I looked at it today, and also looked at my loans. I will call them in the morning. The bank they were originally with merged with another a long time ago.
I started the william d ford consolidation app, but had to pause since I don't have a DOE pin number. will resume once I get it
QUOTE(LynnInMN @ May 29 2006, 07:23 AM)
QUOTE(ctonjes @ May 29 2006, 05:59 AM)
Last week I applied like crazy trying to consolidate my defaulted loan made by new york state higher educational services corporation, a guarantee agency. I was told that it is against federal law for a loan in default to be consolidated. Is this true?
WQho were you apply to and who told you this garbage?? If has never been against the law!
Lynn, for the FFEL lender that I work for. We are not allowed to consolidate defaulted student loans. We can consolidate them while they are deliquent. But once they hit default, they have to rehab the loans in order to get consolidated. by FFEL. Direct loans may play by different rules tho.
EDIT: looks after some web research, it looks like FFEL companies can pick and choose if they wish to consolidate defaulted fed loans. All I know, is that my company chooses not to consolidate defaulted loans.
QUOTE(ignoranceIsn'tBliss @ May 30 2006, 04:23 PM)
QUOTE(LynnInMN @ May 29 2006, 07:23 AM)
QUOTE(ctonjes @ May 29 2006, 05:59 AM)
Last week I applied like crazy trying to consolidate my defaulted loan made by new york state higher educational services corporation, a guarantee agency. I was told that it is against federal law for a loan in default to be consolidated. Is this true?
WQho were you apply to and who told you this garbage?? If has never been against the law!
Lynn, for the FFEL lender that I work for. We are not allowed to consolidate defaulted student loans. We can consolidate them while they are deliquent. But once they hit default, they have to rehab the loans in order to get consolidated. by FFEL. Direct loans may play by different rules tho.
That again is a lender, not a guarantor. Federal law permits FFELP defaults to be consolidated. The company you work for is choosing not to consolidate to defaulters, probably to keep the cohort default rate lower.
An update to this: My loans were with hesc but are now with DOE. I filled out the online consolidation app yesterday, so will wait a week to see what happens.
What could stop this from occuring? I would much rather do this then rehab first.
What could stop this from occuring? I would much rather do this then rehab first.
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