This board has been very helpful to me. I haven't seen a lot of post about rehabbing defaulted student loans so I will share my story.

I got several student loans and dropped out after a year and a half in 98. Never paid on my loans and they didnt show up on my CR until 2002. I entered a rehab and finished paying the 12 month program in Feb 04. I have over $13K in student loans but they agreed to let me pay $100 per month. They tried to get me to go for $350 per month but I just kept saying that my budget would not allow me to be successful in the program. I faxed them a pay stub and my expenses... and finally they agreed to $100.

After the rehab was complete, I called the next week to see if it would be removed from my report. The CA told me to call US Dept of Ed because they now have the loan. I called USDoE and they gave me the run around for about 2 weeks. Finally, they told me to dispute it and it will be removed.

Last week I sent CMRR letters to the each CRA and USDoE explaining the situation. The letters I sent USDoE also included the regulation that states rehabbed loans should be removed from CR within 30 days of 12th payment.

Now I am waiting out the 30 days to see the results. Hopefully it will be removed as promised. I will keep you guys posted on the results.

Thank You! This could make a huge difference for me!

Glad to help. Just be sure to negotiate your payments at a level you can absolutely pay for 12 consecutive months. They talk tough but will bend if you can prove (which isnt hard) you can't pay more. One late payment and you wont get a second chance.

I am paying my PHEAA loan through NCO. I made arrangements to pay $125/month for 12 consecutive months. I am a little bit unclear, but I think this constitutes the rehab, doesn't it? The representative stated that when I am finished making the 12 consecutive payments, he would help me consolidate all of my loans and get them all into good shape. Are the 12 consecutive payments considered the rehab or does rehab take place after the 12 consecutive payments?

Also, if I just consolidate without rehabbing, will the negative marks fall off in 7.5 years?

Any replies will be appreciated.

I currently am in 2 different rehabs.

The first one is a 9 month period and then it will be resold it is due in AUG.
The second rehab is with DCS that I just started. My situation is the following. I have not signed any documentation with either group. If I falter on a payment would I restart the process or get kicked out.

Thanks,

-c

I signed and returned a rehabilitation agreement after I made my first payment. If you have not yet done so, call to inquire about documentation. You should have something in writing stating that your loans will be removed from default status and returned to the Original Lender upon completion of the program.

My loans are also in rehab...since December...oye this is gonna be a long year. I never got a rehab agreement but I have spoken with the DofE about my account and they see Im in rehab with the CA.

My question is after I make my last payment in November....it gets back to the DofE and sold to another lender....will I be making a payment in December? And would this be to the DofE or the new lender...they'd have to have it set up pretty quick for me to do that.

I don't think so. I made my last rehab payment in Feb. DofE sent me a letter saying my next payment is due May 5. Thats a two month gap and the payment is the same amount.

Ok so it took a while to do but I finally got every negative TL removed from report after rehabbing. EQ and EX dropped automatically. I had to dispute with TU. They removed all the TL's but one which now shows that it has never been late since 1996. That really helped my age of accounts.

My scores have increased quite a bit. TU was my worst at 543. It is now 625 after rehabbing.

My final words....

REHABBING YOUR STUDENT LOANS IS A GREAT THING TO DO!!

Nozcredit..

YOu were reading my mind with your post. I have been rehabbing since October, 03 and near completion. My loan did not report "default" however, reports as "current, pays as agreed"; however, I have over 10 (120 days past due) which is probably tanking my scores.

My question, if I dispute the late payments (since I am in Rehabbing) is it possible they may remove the late payments OR should I leave the TL alone until I am through with the Rehabbing process to potentially have the loan change status (deletion of the late payment notations) and report more positively.

Any suggestions??
B

My advice would be to let it ride until you are completely through rehabbing. Then immediately dispute and send a letter to your lender informing them of your dispute. It took the full 30 days but I'm very happy with the results. I just deffered my payments until my consolidation goes into effect. It all worked out wonderfully.

If you dispute now and they dont change it - you may have a difficult time getting the CRA's to open another case once you've completed rehab.

Just wanted to ad my .02...

My DH finished rehabbing in Jan. 04, we received a letter from PHEAA(PA) that the payemtns would stay the same $180/month as during rehab and they would start reporting as positive TLs...which they did automatically , all the negs from before rehab are gone and were replaced with 4 positive TL (one for each loan) that started reporting March 04 and paid current(never late). The open date is 1991 when he got the loans, so it helps in both ways.

I don't know if each state is different however in PA the loans were always heeld by PA Heigher Education Assistance Agency (PHEAA) just different departments, there was never a collection agency invloved.

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Hopefully I am out of student loan hell. When I graduated college I consolidate my loans, but I couldn't afford the payment. So I dodged then and dodged them. Thinking back on it, I was so stupid. But anyways, the loan went into default and they wanted their money. I was in contact with them agreed to a 100 dollars a month. Well 911 happened and I figured I would hold on to my 100 bucks just in case. By agreeing to the payments and be upfront about where I worked, after 3 months of non-payments they started garnishing my wages. They did this for two years. When I look at my credit report, it doesn't show that the payments where made for the last two month. Recently, I had the US government buy my loans and they will get their money directly from my checking account.

:?:
Can I get the lender to update their records to show that they were paid over the last 24 months?

By paying off that loan and opening an account with the government, will that help increase my credit score?

Lastly, there are duplicate student loans on my credit report, with different quantities, I contact the credit bureau and they insist the company is saying its valid. I contact the lender and they are saying they are not reporting that information to the credit bureau.. I'm not sure what to do.

What is the regulation? Can someone show this particular one to me? I have a student loan that was rehabbed that is showing Transferred/180 days late that I need to get removed from my CR.

YOu need to call or send the lender the info that your loan has been rehabbed. In case of Sallie Mae, the loan will go back to them when it is rehabbed and they will update it automatically.

i started this when i was getting a hard money real estate loan. the lender wanted me to do something about my back student loans. i had about three student loans and a 686 credit score. i think the student loan amounts were being reported screwy, because they only showed up as like 200$ total of debt, when in fact it was closer to 20k in back debt. the instant i started this stupid program, my credit score dropped from 686 which is respectable, down to 579, which is bad. i could have just left well enough alone and i'd have been fine, but instead i tried to do the right thing and i got screwed. i have yet to get any documentation from NCO, the people who put me on this payment plan to begin with. one time they sent me a form that demanded "references" but never said why or what type. i'm assuming they just want someone to go bug if you quit paying them again. every once in a while, i'll get a call from someone named "wendy" that says they sent me this information and it is crucial that i send it back to her as soon as possible. sounds like a crock to me. i don't know what the program is or what is going to happen, but my friend did it and his credit is still messed up, but at least now he can show that he's paid the loans for the past year, which helped in the mortgage process he is going through.

Just my 2 cents. Make sure once you the rehab and the loan has been sold and you are making those new payments that you check your credit report. On 1 of my CR's it showed that all of them were transferred and "paid or paying as agreed" except one TL that showed the entire balance in the negative (I had 5 loans). I had to dispute that as other and explain that loan was rehab and it came off my report, but it hurt my score before it was done. Make sure it's all transferred correctly.

I have recently completed REHAB, and have reconsolidated my student loans. The rehab was done through EDSI and the loan was sold to sallie mae after the 12 months.

Question is; Who do I write letters to, to remove negative TLs from my credit report. The TLs are still there from all the defaulted status.

Thanks for any help

I would wait a minute and then pull your CR. If it's showing transferred and the person who the loan was sold to is reporting it should report as Paid or paying as agreed (may even show a transfer which is fine). If that doesn't happen, then dispute with the CA as obsolete and go from there.

Anyone doing rehab should read this and use it:
Higher Education Act
Loan rehabilitation agreement.

http://a257.g.akamaitech.net/7/257/2422/08...4cfr682.405.htm