Applied for and received a student loan of 15k a few years back.
I then dropped out of college to pursue my lifelong dream of painting nude women on the beaches of Tahiti.
I differed my loans for about a year.
It has been about 1 1/2 years since my defferment stopped. My credit report shows a year of non payment.
If you have been in a simliar situation, please advise on what to do?
I was thinking of contacting the loan lady (who keeps sending me bills that I use for birdcage liner every few weeks) and asking her if she will take off the "no pays" off my credit report, I will start giving her whatever she is requesting I pay per month.
I read somewhere on here that it is impossible to do the 1-2 punch on a student loan, as those types of loans are exempt?
I do not want to weasel out of this debt....but at the same time, I think it is really affecting my credit score alot worse than the paid settlements or CO on my credit report.
Full Version: Best way to attack Student Loans in default
Are you in default? Defaulted student loans will tank your score.
There is no SOL on student loans. 1-2 Punch is not an option.
If they are in default, you need to rehab them. Whatever you do, do NOT consolidate before rehab.
There is no SOL on student loans. 1-2 Punch is not an option.
If they are in default, you need to rehab them. Whatever you do, do NOT consolidate before rehab.
QUOTE(darth_fico @ Jan 21 2007, 01:52 PM) 
Are you in default? Defaulted student loans will tank your score.
There is no SOL on student loans. 1-2 Punch is not an option.
If they are in default, you need to rehab them. Whatever you do, do NOT consolidate before rehab.
There is no SOL on student loans. 1-2 Punch is not an option.
If they are in default, you need to rehab them. Whatever you do, do NOT consolidate before rehab.
Yes, I am in default.
Can you elaborate on "rehabbing" student loans? What exactly does that involve?
I just have one loan out. 15k. I have not paid one cent on the money I owe.
From what I am reading on CB....my only option is to contact the loan company and tell them I am going to start paying them however much they want me to pay monthly?
And if I start paying this month.....will my credit score rise? Or will it take 1-2 years of steady realiable payments on my student loan to make my credit score rise?
That is unfortunately correct.
Student loans are a unique beast.
They are not subject to SOLs and also are not dichargeable in bankruptcy.
So they know they'll get their money eventually when you want to buy a house or a car or something, and thus they have absolutely NO incentive to work anything out with you, except of course a payment plan.
You need to call and arrange to start making payments again. Hate to say it, but it really is your only option.
Student loans are a unique beast.
They are not subject to SOLs and also are not dichargeable in bankruptcy.
So they know they'll get their money eventually when you want to buy a house or a car or something, and thus they have absolutely NO incentive to work anything out with you, except of course a payment plan.
You need to call and arrange to start making payments again. Hate to say it, but it really is your only option.
"Rehabbing" just refers to restarting payments, when it comes to student loans.
It's not like a card or something, where you're 'rehabbing' a charged off account.
SLs just sit and sit and sit. You pay them or you don't, but they'll always be there waiting for you. They don't go away.
It's not like a card or something, where you're 'rehabbing' a charged off account.
SLs just sit and sit and sit. You pay them or you don't, but they'll always be there waiting for you. They don't go away.
QUOTE(chriswufgator @ Jan 21 2007, 02:02 PM)
That is unfortunately correct.
Student loans are a unique beast.
They are not subject to SOLs and also are not dichargeable in bankruptcy.
So they know they'll get their money eventually when you want to buy a house or a car or something, and thus they have absolutely NO incentive to work anything out with you, except of course a payment plan.
You need to call and arrange to start making payments again. Hate to say it, but it really is your only option.
Student loans are a unique beast.
They are not subject to SOLs and also are not dichargeable in bankruptcy.
So they know they'll get their money eventually when you want to buy a house or a car or something, and thus they have absolutely NO incentive to work anything out with you, except of course a payment plan.
You need to call and arrange to start making payments again. Hate to say it, but it really is your only option.
Will my FICO scores instantly jump in a few weeks after I start making my first payments? How long can I expect to wait until my FICO scores go higher from making payments on my student loan?
It is only $200 a month that they want, so I can afford it.
Do you think they will agree to deleting the months of "no pay" off my credit report if I tell her I want to start making payments?
To rehab your loans, you will enter into an agreement (usually with the CA that is hounding you). You will make payments for a yesr (maybe less, depends on agreement). The payments can be fairly small, you negotiate that up-front. Paying off the loan immediately will NOT rehab the loan. You MUST make payments for the duration.
Then, the loan will be sold to another lender. Your loan will show current/paid as agreed, and all of your lates will be gone. It will show perfect history since the day you took out the original loan. Only when this has been done will your credit report cease to show the default.
Then, the loan will be sold to another lender. Your loan will show current/paid as agreed, and all of your lates will be gone. It will show perfect history since the day you took out the original loan. Only when this has been done will your credit report cease to show the default.
We worked out that after one year of good payments they would show my husband's account as never late.
You just have to see what you can work out. The good thing is that they keep their promises.
You just have to see what you can work out. The good thing is that they keep their promises.
Ouch....my paychecks are going to be considerably smaller for the next year or so.
Trust me, rehabbing your student loans will do amazing things for your credit.
It will also keep you from having your income tax refunds withheld, wages garnished, and keep you off the blacklist for government jobs.
And the sense of relief and accomplishment is beyond words.
It will also keep you from having your income tax refunds withheld, wages garnished, and keep you off the blacklist for government jobs.
And the sense of relief and accomplishment is beyond words.
QUOTE(darth_fico @ Jan 21 2007, 02:20 PM)
Trust me, rehabbing your student loans will do amazing things for your credit.
It will also keep you from having your income tax refunds withheld, wages garnished, and keep you off the blacklist for government jobs.
And the sense of relief and accomplishment is beyond words.
It will also keep you from having your income tax refunds withheld, wages garnished, and keep you off the blacklist for government jobs.
And the sense of relief and accomplishment is beyond words.
Well....all fine and dandy, but I need a car loan ASAP. My current car is on it's last legs, so I gotta figure out the quickest fix I can.....Even if that means offering several hundreds of dollars per month for a few months?
I wonder if they will accept an offer like that...
FICO's are in the low 500's.
So this is my motivation.
QUOTE(premed428 @ Jan 21 2007, 02:23 PM)
QUOTE(darth_fico @ Jan 21 2007, 02:20 PM)
Trust me, rehabbing your student loans will do amazing things for your credit.
It will also keep you from having your income tax refunds withheld, wages garnished, and keep you off the blacklist for government jobs.
And the sense of relief and accomplishment is beyond words.
Well....all fine and dandy, but I need a car loan ASAP. My current car is on it's last legs, so I gotta figure out the quickest fix I can.....Even if that means offering several hundreds of dollars per month for a few months.
FICO's are in the low 500's.
So this is my motivation.
Your interest rates my not be great, but most dealers will still finance you with default student loans as long as you don't have a repo.
Rehabilitation for student loans is regulated by the federal govt and is currently nine months of agreed upon payments, never late. Never late is within 15 dys of the pmt due date; you can't pay off ahead of schedule or make late pays. You don't have to give yr bank info. You can send money orders if you want. They have to rehab the loan if you specifically ask for rehabilitation but they often try to say your loan is not eligible - hogwash. If you had a govt guaranteed loan, it's eligible.
The derog info on the collection TL should disappear - deletion of the complete TL - but if the original lender is on the report, you may have to live with their negative TL until the seven year reporting period runs out. A guaranty agency TL should disappear. They are not the original lender.
Negotiate for yr best deal. They have to give you a reasonable and affordable payment, they have to give you the nine months pmt plan, and they have to delete the collection/guaranty agency TL, per federal regs. Anything more than that is negotiated (like forgiven collection fees, etc).
Do not consolidate before rehabbing or the collection/guaranty agency TL will remain. It only deletes with a rehab. The TL will not go away before the rehab is completed no matter what, so you're living with it that long at a minimum.
The derog info on the collection TL should disappear - deletion of the complete TL - but if the original lender is on the report, you may have to live with their negative TL until the seven year reporting period runs out. A guaranty agency TL should disappear. They are not the original lender.
Negotiate for yr best deal. They have to give you a reasonable and affordable payment, they have to give you the nine months pmt plan, and they have to delete the collection/guaranty agency TL, per federal regs. Anything more than that is negotiated (like forgiven collection fees, etc).
Do not consolidate before rehabbing or the collection/guaranty agency TL will remain. It only deletes with a rehab. The TL will not go away before the rehab is completed no matter what, so you're living with it that long at a minimum.
QUOTE(macuser @ Jan 21 2007, 02:26 PM)
Rehabilitation for student loans is regulated by the federal govt and is currently nine months of agreed upon payments, never late. Never late is within 15 dys of the pmt due date; you can't pay off ahead of schedule or make late pays. You don't have to give yr bank info. You can send money orders if you want. They have to rehab the loan if you specifically ask for rehabilitation but they often try to say your loan is not eligible - hogwash. If you had a govt guaranteed loan, it's eligible.
The derog info on the collection TL should disappear - deletion of the complete TL - but if the original lender is on the report, you may have to live with their negative TL until the seven year reporting period runs out. A guaranty agency TL should disappear. They are not the original lender.
Negotiate for yr best deal. They have to give you a reasonable and affordable payment, they have to give you the nine months pmt plan, and they have to delete the collection/guaranty agency TL, per federal regs. Anything more than that is negotiated (like forgiven collection fees, etc).
Do not consolidate before rehabbing or the collection/guaranty agency TL will remain. It only deletes with a rehab. The TL will not go away before the rehab is completed no matter what, so you're living with it that long at a minimum.
The derog info on the collection TL should disappear - deletion of the complete TL - but if the original lender is on the report, you may have to live with their negative TL until the seven year reporting period runs out. A guaranty agency TL should disappear. They are not the original lender.
Negotiate for yr best deal. They have to give you a reasonable and affordable payment, they have to give you the nine months pmt plan, and they have to delete the collection/guaranty agency TL, per federal regs. Anything more than that is negotiated (like forgiven collection fees, etc).
Do not consolidate before rehabbing or the collection/guaranty agency TL will remain. It only deletes with a rehab. The TL will not go away before the rehab is completed no matter what, so you're living with it that long at a minimum.
I'm going to run out to the .99 cents store and buy a bunch of duct tape and tape my little Nissan up so tight that it will last me until October of this year.
I will call the lady this week and ask her for a "rehab"
thanks to all who replied in this thread.
Higher Education Act states at least 12 months of payments on time to be considered a rehab. Don't know where the 9 months is coming from, unless the Act was amended. I would google this to be sure (i got 12 months). On about $70k, my agreement ending 7/2005 was 12 months in $750/month payments and all derogs where removed from the three CRA's. Collection fees were removed as well. I consolidated with Citi right after rehab was complete. As others have posted, DO NOT consolidate out of default, it will not be removed from CRA's. Check out the student forum.
When I defaulted my FICO's were high 400's low 500's. My friend filed BK7 and had higher scores than me, WTF?
Extremely difficult to finance a car when mine died. Auto loans could run you like 25% plus a huge down payment. Luckily, I live in a state with an interest rate cap of 18% on auto loans (in my siggy). Get that SL default fixed before you need a car! Good luck.
When I defaulted my FICO's were high 400's low 500's. My friend filed BK7 and had higher scores than me, WTF?
Extremely difficult to finance a car when mine died. Auto loans could run you like 25% plus a huge down payment. Luckily, I live in a state with an interest rate cap of 18% on auto loans (in my siggy). Get that SL default fixed before you need a car! Good luck.
QUOTE(sarg @ Jan 21 2007, 02:56 PM)
Higher Education Act states at least 12 months of payments on time to be considered a rehab. Don't know where the 9 months is coming from, unless the Act was amended. I would google this to be sure (i got 12 months). On about $70k, my agreement ending 7/2005 was 12 months in $750/month payments and all derogs where removed from the three CRA's. Collection fees were removed as well. I consolidated with Citi right after rehab was complete. As others have posted, DO NOT consolidate out of default, it will not be removed from CRA's. Check out the student forum.
When I defaulted my FICO's were high 400's low 500's. My friend filed BK7 and had higher scores than me, WTF? Extremely difficult to finance a car when mine died. Auto loans could run you like 25% plus a huge down payment. Luckily, I live in a state with an interest rate cap of 18% on auto loans (in my siggy). Get that SL default fixed before you need a car! Good luck.
When I defaulted my FICO's were high 400's low 500's. My friend filed BK7 and had higher scores than me, WTF?
Extremely difficult to finance a car when mine died. Auto loans could run you like 25% plus a huge down payment. Luckily, I live in a state with an interest rate cap of 18% on auto loans (in my siggy). Get that SL default fixed before you need a car! Good luck.Yes, it did change to nine. Recently. My rehab was for nine months. Google rehabilitation "nine consecutive" payments and you will see it now requires nine months.
- Rehabilitation is another option to get your student loan out of default. ... Make nine consecutive, on-time, voluntary, full monthly payments. ...
- Eligibility Requirements
- Make nine consecutive, on-time, voluntary, full monthly payments.
- Payments must be approved by TG.
- You cannot pay ahead or remit double payments.
- The account balance at the time of the rehabilitation must be at least $1,000.
QUOTE
Then, the loan will be sold to another lender. Your loan will show current/paid as agreed, and all of your lates will be gone. It will show perfect history since the day you took out the original loan.
.
With rehab, the default notation will be removed, but NOT the original lates, etc. by the original servicer, lender. The guarantor will remove the default after you complete rehab. Many people think it all goes away after rehab, it doesn't. But, with the default notation gone you're in a much better situation and usually the original lates, etc. (depending on how long you've been in rehab) will be ready to drop due to age or really aren't too much of a "negative" in terms of score. Rehab IS the way to go though!! I wish I had done it sooner. I made my last rehab payment in October and loan was sold in November. The defaults dropped off at the beginning of this month FINALLY!! A couple of old Sallie Mae lates from way back when, but I can deal with that - they're almost dead now anyway.
Good luck.
QUOTE(NAN101 @ Jan 21 2007, 08:31 PM)
QUOTE
Then, the loan will be sold to another lender. Your loan will show current/paid as agreed, and all of your lates will be gone. It will show perfect history since the day you took out the original loan.
.
With rehab, the default notation will be removed, but NOT the original lates, etc. by the original servicer, lender. The guarantor will remove the default after you complete rehab. Many people think it all goes away after rehab, it doesn't. But, with the default notation gone you're in a much better situation and usually the original lates, etc. (depending on how long you've been in rehab) will be ready to drop due to age or really aren't too much of a "negative" in terms of score. Rehab IS the way to go though!! I wish I had done it sooner. I made my last rehab payment in October and loan was sold in November. The defaults dropped off at the beginning of this month FINALLY!! A couple of old Sallie Mae lates from way back when, but I can deal with that - they're almost dead now anyway.
Good luck.
I rehabbed my student loans, and it did all go away.
I have no lates or delinquencies showing in any way whatsoever.
Just perfect payment history since the very first day of my original loans.
Information for Financial Aid Professionals
www.ifap.ed.gov
Found great information in this section and even used some of these laws/regulations to have Ombudsman assist in removal of defaulted student loans.
www.ifap.ed.gov
Found great information in this section and even used some of these laws/regulations to have Ombudsman assist in removal of defaulted student loans.
So what if I won the lottery or my Grandma gave me a big Christmas present, and I have enough money to pay off what I owe completely?
I have a defaulted loan of about $3000. I have had about $250/month garnished from my wages for the past few years.
Is there a good option if I were able to completely pay off my loan, or is it still best to go through a rehab first?
Thanks, good info in this thread.
I have a defaulted loan of about $3000. I have had about $250/month garnished from my wages for the past few years.
Is there a good option if I were able to completely pay off my loan, or is it still best to go through a rehab first?
Thanks, good info in this thread.
QUOTE(Gordo @ Jan 23 2007, 09:46 AM)
So what if I won the lottery or my Grandma gave me a big Christmas present, and I have enough money to pay off what I owe completely?
Well if you the won the lottery, the student loan would grab onto the money before you even saw it.
I have a defaulted loan of about $3000. I have had about $250/month garnished from my wages for the past few years.
Few years on a $3k loan?? About 15 months would have you paid off. How much do you still owe??
Is there a good option if I were able to completely pay off my loan, or is it still best to go through a rehab first?
It really depends on the age of the default and how much you actually owe. You have to have a minimum of $1000 remaining on the loan after the voluntary payments.
Thanks, good info in this thread.
Well if you the won the lottery, the student loan would grab onto the money before you even saw it.
I have a defaulted loan of about $3000. I have had about $250/month garnished from my wages for the past few years.
Few years on a $3k loan?? About 15 months would have you paid off. How much do you still owe??
Is there a good option if I were able to completely pay off my loan, or is it still best to go through a rehab first?
It really depends on the age of the default and how much you actually owe. You have to have a minimum of $1000 remaining on the loan after the voluntary payments.
Thanks, good info in this thread.
QUOTE(LynnInMN @ Jan 23 2007, 09:56 AM)
QUOTE(Gordo @ Jan 23 2007, 09:46 AM)
So what if I won the lottery or my Grandma gave me a big Christmas present, and I have enough money to pay off what I owe completely?
Well if you the won the lottery, the student loan would grab onto the money before you even saw it.
I have a defaulted loan of about $3000. I have had about $250/month garnished from my wages for the past few years.
Few years on a $3k loan?? About 15 months would have you paid off. How much do you still owe??
Is there a good option if I were able to completely pay off my loan, or is it still best to go through a rehab first?
It really depends on the age of the default and how much you actually owe. You have to have a minimum of $1000 remaining on the loan after the voluntary payments.
Thanks, good info in this thread.
$3000 is the amount that I still owe. It was originally an $8000 loan, and I think was maybe close to $10,000 after all of the fees, penalties,...
Thanks again.
Just to clarify something:
Rehab removes the most recent default.
It does *not* guarantee removal of all previous delinquencies.
Number of payments needed to successfully rehab is determined by loan type.
Rehab removes the most recent default.
It does *not* guarantee removal of all previous delinquencies.
Number of payments needed to successfully rehab is determined by loan type.
Ok update:
I contacted the student loan company and here is what they told me:
At this point, my student loan is not eligable for "rehab" because it has not gone into collections.
I have not made payments in over a year since it was due....now it is only showing as seriously late.
They told me the best thing I could do, is start making payments then 6 months to a year after steady payments, I could call them and ask them if they could look into it.
Then I was told that the student loan company (who is affiliated with the U.S. Government btw) could not do anything to change the negative remarks on the credit report.
I countered with the fact that it makes no financial sense for me to start paying the student loan at this point, if they cannot guarantee me in writing that after 6 months to a year of steady payments, they will erase the negative remark off my credit report.
The CSR did make mention that after an account goes into collections, THEN rehab can occur.
Am I getting the runaround here? The guy I spoke with told me that he would "look into if there are any programs like that out there."
Anyone suggest my next step?
Is it ok to talk freely with the CSR reps on a student loan? I know you are supposed to play dumb when talking to CRA's or OC's or CA's over the phone (not supposed to talk to them in the first place).
thanks
I contacted the student loan company and here is what they told me:
At this point, my student loan is not eligable for "rehab" because it has not gone into collections.
I have not made payments in over a year since it was due....now it is only showing as seriously late.
They told me the best thing I could do, is start making payments then 6 months to a year after steady payments, I could call them and ask them if they could look into it.
Then I was told that the student loan company (who is affiliated with the U.S. Government btw) could not do anything to change the negative remarks on the credit report.
I countered with the fact that it makes no financial sense for me to start paying the student loan at this point, if they cannot guarantee me in writing that after 6 months to a year of steady payments, they will erase the negative remark off my credit report.
The CSR did make mention that after an account goes into collections, THEN rehab can occur.
Am I getting the runaround here? The guy I spoke with told me that he would "look into if there are any programs like that out there."
Anyone suggest my next step?
Is it ok to talk freely with the CSR reps on a student loan? I know you are supposed to play dumb when talking to CRA's or OC's or CA's over the phone (not supposed to talk to them in the first place).
thanks
Oh, and I also told the CSR that I had a job....
Was that a no-no?
Was that a no-no?
QUOTE(premed428 @ Jan 23 2007, 02:49 PM)
Ok update:
I contacted the student loan company and here is what they told me:
At this point, my student loan is not eligable for "rehab" because it has not gone into collections.
I have not made payments in over a year since it was due....now it is only showing as seriously late.
They told me the best thing I could do, is start making payments then 6 months to a year after steady payments, I could call them and ask them if they could look into it.
You are stuck with the lates...there is nothing they can do.
Then I was told that the student loan company (who is affiliated with the U.S. Government btw) could not do anything to change the negative remarks on the credit report.
I countered with the fact that it makes no financial sense for me to start paying the student loan at this point, if they cannot guarantee me in writing that after 6 months to a year of steady payments, they will erase the negative remark off my credit report.
You are playing with fire. Your comments show intent of non payment and could force you into default IMMEDIATELY. With default comes 2 negatgive tradelines. Rehab only takes care of ONE tradeline. Plus default means 18.5% in collection fees being added to your account. So does making payments NOW make financial sense???
The CSR did make mention that after an account goes into collections, THEN rehab can occur.
Am I getting the runaround here? The guy I spoke with told me that he would "look into if there are any programs like that out there."
Anyone suggest my next step?
Is it ok to talk freely with the CSR reps on a student loan? I know you are supposed to play dumb when talking to CRA's or OC's or CA's over the phone (not supposed to talk to them in the first place).
thanks
I contacted the student loan company and here is what they told me:
At this point, my student loan is not eligable for "rehab" because it has not gone into collections.
I have not made payments in over a year since it was due....now it is only showing as seriously late.
They told me the best thing I could do, is start making payments then 6 months to a year after steady payments, I could call them and ask them if they could look into it.
You are stuck with the lates...there is nothing they can do.
Then I was told that the student loan company (who is affiliated with the U.S. Government btw) could not do anything to change the negative remarks on the credit report.
I countered with the fact that it makes no financial sense for me to start paying the student loan at this point, if they cannot guarantee me in writing that after 6 months to a year of steady payments, they will erase the negative remark off my credit report.
You are playing with fire. Your comments show intent of non payment and could force you into default IMMEDIATELY. With default comes 2 negatgive tradelines. Rehab only takes care of ONE tradeline. Plus default means 18.5% in collection fees being added to your account. So does making payments NOW make financial sense???
The CSR did make mention that after an account goes into collections, THEN rehab can occur.
Am I getting the runaround here? The guy I spoke with told me that he would "look into if there are any programs like that out there."
Anyone suggest my next step?
Is it ok to talk freely with the CSR reps on a student loan? I know you are supposed to play dumb when talking to CRA's or OC's or CA's over the phone (not supposed to talk to them in the first place).
thanks
QUOTE(LynnInMN @ Jan 23 2007, 07:59 PM)
QUOTE(premed428 @ Jan 23 2007, 02:49 PM)
Ok update:
I contacted the student loan company and here is what they told me:
At this point, my student loan is not eligable for "rehab" because it has not gone into collections.
I have not made payments in over a year since it was due....now it is only showing as seriously late.
They told me the best thing I could do, is start making payments then 6 months to a year after steady payments, I could call them and ask them if they could look into it.
You are stuck with the lates...there is nothing they can do.
Then I was told that the student loan company (who is affiliated with the U.S. Government btw) could not do anything to change the negative remarks on the credit report.
I countered with the fact that it makes no financial sense for me to start paying the student loan at this point, if they cannot guarantee me in writing that after 6 months to a year of steady payments, they will erase the negative remark off my credit report.
You are playing with fire. Your comments show intent of non payment and could force you into default IMMEDIATELY. With default comes 2 negatgive tradelines. Rehab only takes care of ONE tradeline. Plus default means 18.5% in collection fees being added to your account. So does making payments NOW make financial sense???
The CSR did make mention that after an account goes into collections, THEN rehab can occur.
Am I getting the runaround here? The guy I spoke with told me that he would "look into if there are any programs like that out there."
Anyone suggest my next step?
Is it ok to talk freely with the CSR reps on a student loan? I know you are supposed to play dumb when talking to CRA's or OC's or CA's over the phone (not supposed to talk to them in the first place).
thanks
Yes, it is clear.
So this "rehab" is only through the government? What is the point of going through rehab if it wont take the negative comments off my credit report?
Why shouldnt I just pay the student loan company directly and screw rehab?
Can anyone help on this one? I have limited knowledge of this kind of stuff and am getting the feeling that my fat uneducated mouth on this particular topic is going to get me into hot water with this loan company.
QUOTE(premed428 @ Jan 23 2007, 08:42 PM)
QUOTE(LynnInMN @ Jan 23 2007, 07:59 PM)
QUOTE(premed428 @ Jan 23 2007, 02:49 PM)
Ok update:
I contacted the student loan company and here is what they told me:
At this point, my student loan is not eligable for "rehab" because it has not gone into collections.
I have not made payments in over a year since it was due....now it is only showing as seriously late.
They told me the best thing I could do, is start making payments then 6 months to a year after steady payments, I could call them and ask them if they could look into it.
You are stuck with the lates...there is nothing they can do.
Then I was told that the student loan company (who is affiliated with the U.S. Government btw) could not do anything to change the negative remarks on the credit report.
I countered with the fact that it makes no financial sense for me to start paying the student loan at this point, if they cannot guarantee me in writing that after 6 months to a year of steady payments, they will erase the negative remark off my credit report.
You are playing with fire. Your comments show intent of non payment and could force you into default IMMEDIATELY. With default comes 2 negatgive tradelines. Rehab only takes care of ONE tradeline. Plus default means 18.5% in collection fees being added to your account. So does making payments NOW make financial sense???
The CSR did make mention that after an account goes into collections, THEN rehab can occur.
Am I getting the runaround here? The guy I spoke with told me that he would "look into if there are any programs like that out there."
Anyone suggest my next step?
Is it ok to talk freely with the CSR reps on a student loan? I know you are supposed to play dumb when talking to CRA's or OC's or CA's over the phone (not supposed to talk to them in the first place).
thanks
Yes, it is clear.
So this "rehab" is only through the government? What is the point of going through rehab if it wont take the negative comments off my credit report?
No, it is not only thru the government. Rehab is only available to borrowers who HAVE DEFAULTED....i.e. the claim has been paid and they have been declared defaulted. Since you are NOT in default, you do not qualify for rehab. Rehab is a second chance programs for borrowers who have defaulted. It brings there loan current with the guarantor. It does nothing for the lenders tradeline.
Why shouldnt I just pay the student loan company directly and screw rehab? Duh.....yes!!
Can anyone help on this one? I have limited knowledge of this kind of stuff and am getting the feeling that my fat uneducated mouth on this particular topic is going to get me into hot water with this loan company.
QUOTE(Gordo @ Jan 23 2007, 10:46 AM)
So what if I won the lottery or my Grandma gave me a big Christmas present, and I have enough money to pay off what I owe completely?
I have a defaulted loan of about $3000. I have had about $250/month garnished from my wages for the past few years.
Is there a good option if I were able to completely pay off my loan, or is it still best to go through a rehab first?
Thanks, good info in this thread.
I have a defaulted loan of about $3000. I have had about $250/month garnished from my wages for the past few years.
Is there a good option if I were able to completely pay off my loan, or is it still best to go through a rehab first?
Thanks, good info in this thread.
If there has been a judgment against you then you are not eligible for rehabilitation.
QUOTE(premed428 @ Jan 23 2007, 03:49 PM)
Ok update:
I contacted the student loan company and here is what they told me:
At this point, my student loan is not eligable for "rehab" because it has not gone into collections.
I have not made payments in over a year since it was due....now it is only showing as seriously late.
They told me the best thing I could do, is start making payments then 6 months to a year after steady payments, I could call them and ask them if they could look into it.
Then I was told that the student loan company (who is affiliated with the U.S. Government btw) could not do anything to change the negative remarks on the credit report.
I countered with the fact that it makes no financial sense for me to start paying the student loan at this point, if they cannot guarantee me in writing that after 6 months to a year of steady payments, they will erase the negative remark off my credit report.
The CSR did make mention that after an account goes into collections, THEN rehab can occur.
Am I getting the runaround here? The guy I spoke with told me that he would "look into if there are any programs like that out there."
Anyone suggest my next step?
Is it ok to talk freely with the CSR reps on a student loan? I know you are supposed to play dumb when talking to CRA's or OC's or CA's over the phone (not supposed to talk to them in the first place).
thanks
I contacted the student loan company and here is what they told me:
At this point, my student loan is not eligable for "rehab" because it has not gone into collections.
I have not made payments in over a year since it was due....now it is only showing as seriously late.
They told me the best thing I could do, is start making payments then 6 months to a year after steady payments, I could call them and ask them if they could look into it.
Then I was told that the student loan company (who is affiliated with the U.S. Government btw) could not do anything to change the negative remarks on the credit report.
I countered with the fact that it makes no financial sense for me to start paying the student loan at this point, if they cannot guarantee me in writing that after 6 months to a year of steady payments, they will erase the negative remark off my credit report.
The CSR did make mention that after an account goes into collections, THEN rehab can occur.
Am I getting the runaround here? The guy I spoke with told me that he would "look into if there are any programs like that out there."
Anyone suggest my next step?
Is it ok to talk freely with the CSR reps on a student loan? I know you are supposed to play dumb when talking to CRA's or OC's or CA's over the phone (not supposed to talk to them in the first place).
thanks
Tell them to send it to collections?
QUOTE(jcs0527 @ Jan 23 2007, 09:49 PM)
QUOTE(Gordo @ Jan 23 2007, 10:46 AM)
So what if I won the lottery or my Grandma gave me a big Christmas present, and I have enough money to pay off what I owe completely?
I have a defaulted loan of about $3000. I have had about $250/month garnished from my wages for the past few years.
Is there a good option if I were able to completely pay off my loan, or is it still best to go through a rehab first?
Thanks, good info in this thread.
If there has been a judgment against you then you are not eligible for rehabilitation.
This is not completely true. If you complete a set of rehab payments and the judgement holder agrees to release the judgement, a rehab CAN be done. I did a few when I was collecting. However there was no such thing as "reasonable and affordable payments". They paid the 1% payment or higher...and often a down payment. With judgements, anything goes!
Ok, so the general consensus is that:
1. I cannot enter into rehab at this current state.
2. The loan company cannot erase the negatives on my report, no matter how much I bully them over the phone.
3. Just start paying the loan company back, becuase I probably pissed off two very important decision makers today when I called and tried to negotiate, wheel and deal and push them around over the phone.
4. Learn my lesson.
?
1. I cannot enter into rehab at this current state.
2. The loan company cannot erase the negatives on my report, no matter how much I bully them over the phone.
3. Just start paying the loan company back, becuase I probably pissed off two very important decision makers today when I called and tried to negotiate, wheel and deal and push them around over the phone.
4. Learn my lesson.
?
QUOTE(premed428 @ Jan 23 2007, 10:10 PM)
Ok, so the general consensus is that:
1. I cannot enter into rehab at this current state.
2. The loan company cannot erase the negatives on my report, no matter how much I bully them over the phone.
3. Just start paying the loan company back, becuase I probably pissed off two very important decision makers today when I called and tried to negotiate, wheel and deal and push them around over the phone.
4. Learn my lesson.
?
1. I cannot enter into rehab at this current state.
2. The loan company cannot erase the negatives on my report, no matter how much I bully them over the phone.
3. Just start paying the loan company back, becuase I probably pissed off two very important decision makers today when I called and tried to negotiate, wheel and deal and push them around over the phone.
4. Learn my lesson.
?
Exactly.
Piss them off anymore and they will either want you to paydown all your missing payments or they default you. Act humble and suck it up!
It takes care of all entries on the credit report. EVEN if it goes to collections you can rehab and it does take care of both tradelines.
QUOTE(jcs0527 @ Jan 23 2007, 10:15 PM)
It takes care of all entries on the credit report. EVEN if it goes to collections you can rehab and it does take care of both tradelines.
NO IT DOES NOT! Have you ever read the Higher Education Act or this forum??? Only the guarantor is OBLIGATED to remove the negative tradeline. In very rare cases the loan gets deleted from the lender....this is more or less a fluke. \
The goal of this forum is to PREVENT default...not endorse i!!
QUOTE(LynnInMN @ Jan 23 2007, 11:15 PM)
QUOTE(premed428 @ Jan 23 2007, 10:10 PM)
Ok, so the general consensus is that:
1. I cannot enter into rehab at this current state.
2. The loan company cannot erase the negatives on my report, no matter how much I bully them over the phone.
3. Just start paying the loan company back, becuase I probably pissed off two very important decision makers today when I called and tried to negotiate, wheel and deal and push them around over the phone.
4. Learn my lesson.
?
Exactly.
Piss them off anymore and they will either want you to paydown all your missing payments or they default you. Act humble and suck it up!
Ok, I'm scared straight.
When I get to work tomorrow, I will send a "suck up" email to this person, apologizing for my "assertive demeanor" over the telephone yesterday.
Then promptly ask for their mailing address so I can send out the first check.
QUOTE(premed428 @ Jan 23 2007, 10:35 PM)
QUOTE(LynnInMN @ Jan 23 2007, 11:15 PM)
QUOTE(premed428 @ Jan 23 2007, 10:10 PM)
Ok, so the general consensus is that:
1. I cannot enter into rehab at this current state.
2. The loan company cannot erase the negatives on my report, no matter how much I bully them over the phone.
3. Just start paying the loan company back, becuase I probably pissed off two very important decision makers today when I called and tried to negotiate, wheel and deal and push them around over the phone.
4. Learn my lesson.
?
Exactly.
Piss them off anymore and they will either want you to paydown all your missing payments or they default you. Act humble and suck it up!
Ok, I'm scared straight.
When I get to work tomorrow, I will send a "suck up" email to this person, apologizing for my "assertive demeanor" over the telephone yesterday.
Then promptly ask for their mailing address so I can send out the first check.
I would not be emailing them, I would be calling them.
QUOTE(LynnInMN @ Jan 23 2007, 11:25 PM)
QUOTE(jcs0527 @ Jan 23 2007, 10:15 PM)
It takes care of all entries on the credit report. EVEN if it goes to collections you can rehab and it does take care of both tradelines.
NO IT DOES NOT! Have you ever read the Higher Education Act or this forum??? Only the guarantor is OBLIGATED to remove the negative tradeline. In very rare cases the loan gets deleted from the lender....this is more or less a fluke. \
The goal of this forum is to PREVENT default...not endorse i!!
But if you are cleaning up your credit and you are already there you can fix it. I talked to the dept of education today because we had an issue with the loan showing up under their name and the OC. They said Today they were both supposed to be taken care of. I didn't make it up.
Do not default, but you have to start where you are. You can't undefault a loan.
I have a lot of stuff on my credit from my divorce. Some I don't think I did. If you owe a bill you should pay it. Especially a student loan. IF you don't pay it, all that will happen is they will add fees to your amount and they will get their money anyway.
eta: there is no reason to be nasty. We all have the same goal here, which is to clean up our credit and be more financially responsible.
QUOTE(jcs0527 @ Jan 23 2007, 11:53 PM)
But if you are cleaning up your credit and you are already there you can fix it. I talked to the dept of education today because we had an issue with the loan showing up under their name and the OC. They said Today they were both supposed to be taken care of. I didn't make it up.
The DE cannot force a lender to remove valid reporting.
To everyone that wants to argue that rehab guarantees removal of all previous delinquencies, can you please cite something?
Not "they told me" or "they did it for me", but rather an authoritative document. How about part of HEA, a "Dear Partner" letter, or the Common Manual?
PS: No one was being nasty.
I read this thread and it made me think about my own situation. I had a student loan in default but I repaid it all right away. I was so scared when this occurred. I never thought about rehab. I just paid it all at once but now I have a mark from 2years ago showing a paid/charge off- $2000.
How much of an effect will this have on my credit score? In addition, if I paid it off right away- should this help to increase my score if at all?
Is there anyway to remove it, I mean, it is paid off already and right away. You think I can beg the financial aid office at my old university to remove it?
As for the thread starter, good luck with your situation!
How much of an effect will this have on my credit score? In addition, if I paid it off right away- should this help to increase my score if at all?
Is there anyway to remove it, I mean, it is paid off already and right away. You think I can beg the financial aid office at my old university to remove it?
As for the thread starter, good luck with your situation!
Hi---
Assoc. Director of Fin. Aid for a university here. The only way to repair your situation if it is a federal loan (Stafford Loan, Perkins Loan, PLUS Loan) is to rehab it. It takes six (6) consecutive months of payments to complete the rehab. It will NOT remove the past-30 and past-60 marks from your score--those will just have to pass out of the 2 year window.
Was this a graduate loan? The amoung ($15,000) is a little too large to be an undergrad loan if it is not consolidated including loans from several terms. The most you can get per academic year as an undergrad is $10500. IF you are talking about a non-federal (i.e. not part of Title IV of the Higher Education Act of 1965 and relevant re-authorizations and Title 34 of the Federal Code) then there may be different rules.
The best thing to do is contact the lender and rehab. The normal strategies do not apply with federal student loans.
Best,
Matt
Assoc. Director of Fin. Aid for a university here. The only way to repair your situation if it is a federal loan (Stafford Loan, Perkins Loan, PLUS Loan) is to rehab it. It takes six (6) consecutive months of payments to complete the rehab. It will NOT remove the past-30 and past-60 marks from your score--those will just have to pass out of the 2 year window.
Was this a graduate loan? The amoung ($15,000) is a little too large to be an undergrad loan if it is not consolidated including loans from several terms. The most you can get per academic year as an undergrad is $10500. IF you are talking about a non-federal (i.e. not part of Title IV of the Higher Education Act of 1965 and relevant re-authorizations and Title 34 of the Federal Code) then there may be different rules.
The best thing to do is contact the lender and rehab. The normal strategies do not apply with federal student loans.
Best,
Matt
QUOTE(tesseract314 @ Jan 30 2007, 06:13 PM)
Hi---
Assoc. Director of Fin. Aid for a university here. The only way to repair your situation if it is a federal loan (Stafford Loan, Perkins Loan, PLUS Loan) is to rehab it. It takes six (6) consecutive months of payments to complete the rehab. It will NOT remove the past-30 and past-60 marks from your score--those will just have to pass out of the 2 year window.
You badly need to go back and study your HEA. It requires 12 payments for Perkins and 9 for staffords. 6 pays makes you qualified for more title IV funds, but it sure does NOT complete a rehab. The HEA requires that the holder of the loan (guarantor) remove negative trade lines....they do not have to wait 2 years. The lender/servicer is NOT required to update negative tradelines.
Was this a graduate loan? The amoung ($15,000) is a little too large to be an undergrad loan if it is not consolidated including loans from several terms. The most you can get per academic year as an undergrad is $10500. IF you are talking about a non-federal (i.e. not part of Title IV of the Higher Education Act of 1965 and relevant re-authorizations and Title 34 of the Federal Code) then there may be different rules.
The best thing to do is contact the lender and rehab. The normal strategies do not apply with federal student loans.
Actually you contract your guarantor...the lender is already paid off.
Best,
Matt
Assoc. Director of Fin. Aid for a university here. The only way to repair your situation if it is a federal loan (Stafford Loan, Perkins Loan, PLUS Loan) is to rehab it. It takes six (6) consecutive months of payments to complete the rehab. It will NOT remove the past-30 and past-60 marks from your score--those will just have to pass out of the 2 year window.
You badly need to go back and study your HEA. It requires 12 payments for Perkins and 9 for staffords. 6 pays makes you qualified for more title IV funds, but it sure does NOT complete a rehab. The HEA requires that the holder of the loan (guarantor) remove negative trade lines....they do not have to wait 2 years. The lender/servicer is NOT required to update negative tradelines.
Was this a graduate loan? The amoung ($15,000) is a little too large to be an undergrad loan if it is not consolidated including loans from several terms. The most you can get per academic year as an undergrad is $10500. IF you are talking about a non-federal (i.e. not part of Title IV of the Higher Education Act of 1965 and relevant re-authorizations and Title 34 of the Federal Code) then there may be different rules.
The best thing to do is contact the lender and rehab. The normal strategies do not apply with federal student loans.
Actually you contract your guarantor...the lender is already paid off.
Best,
Matt
Lynn is correct.
I am not the least bit surprised that a director of financial aid for a university would know the basic idea but not actually understand the details. I deal with borrowers who have been given semi-correct information by people from their school's financial aid office all the time.
I am not the least bit surprised that a director of financial aid for a university would know the basic idea but not actually understand the details. I deal with borrowers who have been given semi-correct information by people from their school's financial aid office all the time.
QUOTE(Cynic @ Jan 30 2007, 10:54 PM)
Lynn is correct.
I am not the least bit surprised that a director of financial aid for a university would know the basic idea but not actually understand the details. I deal with borrowers who have been given semi-correct information by people from their school's financial aid office all the time.
I am not the least bit surprised that a director of financial aid for a university would know the basic idea but not actually understand the details. I deal with borrowers who have been given semi-correct information by people from their school's financial aid office all the time.
So true. When I transitioned from collections to financial aid at the U, I went thru training with the new director for our school. (Orientation, computer training, policies...all that crap.) Jim had a working knowledge of rehab but in no way felt comfortable advising. There is just too much information for the normal FA advisor to learn about processing, qualifying and dispersing FA...the defaulting aspect is really not something they deal with. On top of all my other duties, they gave me the title of Default Prevention Officer....I dealt with students in default and those teetering into default. My officemate picked up on it over the years of hearing me advise and talk about it and she now holds the postion. She moved into the collection department handling defaulted Perkins that the U handles in house. When the number of payments on staffords changed last year, I sent her the info....she did not actually get a bulletin until almost October!
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