Hi, I'm very new to this board, but I thought my story might inspire others who are scared and confused!

I was many, many years in default. The first payment on my student loans had come due in late 1988. I wish I had the sense to call about this back then, I didn't remember that I could have qualified for deferment at the time!

It was 2003 before I ever made a payment, during my first failed attempt at rehabilitating my loan. I made one or two payments, then didn't have the money and I stopped.

I felt ashamed but knew getting out of default was the right thing to do.

I started by going to the Dept of Education website and requesting a PIN. Once I got that in the mail, I went back to the website and faced the reality. My $7500 in student loans from the late 80's had turned into over $18K.

I called the Dept of Education since that is where it showed my loan was now. The lady was nice, and arranged a payment of $150 for 12 months (at that time it was still 12, has gone down to 9 months now). At the time I didn't realize I had to sign paperwork. I started getting statements and made my payment RELIGIOUSLY! I knew I didn't want to mess up my chance.

I assumed the income tax refund garnishments would stop once I made 6 on-time payments, but they didn't. So I called up the Dept of Ed and found out I still needed to sign a rehab agreement. A different woman this time, but very nice to me also. I got the papers a few days later, and once my income tax payment showed up at the D of E, I sent in the rehab agreement. I also made my payment for March on time just in case.

A few days ago, I received a letter from the Dept of Ed congratulating me on completing my rehab and getting out of default (that was soooo nice!). I also got papers from the Connecticut Student Loan Foundation explaining they now have my student loan, and that my payment will be $129 a month (for 10 years minus one month). My interest rate remains 8%, and if I stay with their payment schedule my total amount will end up a little over $14K.

I was worried that collection fees would be added, but somewhere in the process they disappeared. The amount of my new rehabilitated loan is only $9.9K. I plan on paying the same $150 a month that I'm used to paying so I might shave a little bit of interest off.

I am so happy I faced my shameful past and can hold my head up again.

I am still scared to pull my credit reports so I don't know yet the effect it will/has had. I'm working on getting up the nerve to do that next!

Congrats!

Assuming you defaulted in 1989 or 1990, the collection tradeline should have aged off by now...I don't believe the failed rehab attempt started a new 7 years.

The loan being assigned to ED would have started a new negative tradeline, but since you rehabbed through them they have or will be changing it to never late/transferred.

I think all you'll see on your report is the closed ED account and your new account with Connecticut Student Loan Foundation... so you basically get to restart with a clean slate

Thanks, Cynic...I am looking forward to a positive TL for once! I will keep watching to see the difference once CSLF starts reporting...I assume it might take a few weeks to show up.

I got up the nerve to join myfico last night to see just how bad the damage is. I couldn't get my Experian info, but the other two didn't show anything at all related to my student loan history. I expected it to be a lot worse after not finishing the 2003 rehab attempt.

My scores from myfico were Equifax 521 and TU 556. I honestly expected them to be in the 300's. So I'm happy that I did the right thing and will continue down the same path! No excuses, no BS, I just kept sending in my $150 payment and it all came out so well. Wish I done this so many years ago.

Now I will start working on getting those scores up.

Congrats, newleaf! Feels great, doesn't it? I completed rehab of my loans in December after a similar time frame as yours. If only I had done it years ago, but, well, the past is past, right?

It's sooo nice to not have the continual phone calls and letters from Dept of Ed threatening to take my first born.

I've said it before, if you have the opportunity to rehab your SL, DO IT!! It's such a huge weight off your back, it really is. You can then move on with your life. After all, SL have the ability to outlive you. They don't go away.

BTW - Newleaf, your scores will increase from here. I had actually worked on repairing my credit before I started rehab. I had everything else taken care of and just had the SL to contend with. It really was a feeling of accomplishment once that was complete. You can only go up from here!

Thank you, Nan!