I made my 9th payment 12/29. I was worried that I would have to make a 10th payment.

I called Direct Loans yesterday and was told that my information was reported to them on the 8th and that I would be receiving my papers within 2 weeks.

For the past 2 weeks, the DL Servicing website had a notation that my account was in default and that I needed to call the collection agency. I checked the DL Servicing website today and it has been updated to reflect that I am in repayment status. The penalty fees/collection fees are also gone and it shows that my next payment is not due until 2/28.

Now I have to wait until my credit reports are updated to reflect that I am out of default.

Good Job! Keep us updated.

I have 4 more payments myself until i'm done.



K.

Also, call the CA and Direct Loans, just to be 100% sure there isn't a payment due this month.

I received a letter today from the US Dept of Education stating that my loan had been transferred back to Direct Loan Servicing and that they have notified the National Credit Bureaus to delete the record of default from my credit record.

I called DL and confirmed that my next payment is not due until 2/28.

Now I have to determine if I should consolidate or not.

Thanks!

Good luck on your rehab.

How did you get into the rehab program while in default. I was told that I have to speak with the collection agency assigned to my loan and that the dep of Educ can't help me. I have 2 consolidated loans. I know that they are not sallie Mae. I have to call the collection agency this month but I am afraid that they will want more than the $280 that I can pay a month.

Can you explain how you got your rehab set up while in default? thanks.

You have to call the collection agency that has your account, who has to accept reasonable and affordable payments... generally, "reasonable" monthly payments are considered to be one percent of the balance monthly. Just call the CA and inform them that you want to rehab.

A couple of things to remember. The CA might try to get you to pay more and might ask you for financial info. In my case, I was assigned to a CA, to whom I wrote a letter. Unbeknownst to me, the DOE had already recalled my loan from the CA to reassign it to another. The letter I wrote to the CA was forwarded to the DOE, and I received a letter from the DOE accepting the payment amount I proposed (which was 1% of the balance) and informing me that they had set me up for repayment. After that, in error, they reassigned my loan to another CA and when I called them, they demanded a down payment (which is not required under the rehab program). They also wanted a higher payment than what the DOE had already set up. When I educated myself a little more, I called the DOE to complain and upon reviewing what had happened, the guy at DOE determined that the account had been reassigned to the second CA in error. They recalled the account and waived about $1500 in collection costs.

Each CA that collects for the DOE has a liaison that anyone can contact to try to resolve issues. If you call the DOE, they will give you the name and direct dial number of that person. It might be a good idea to get the info from the DOE before placing your first call to set up rehab.

Don't let them bully you into a down payment (if they ask, just tell them that the DOE does not require a down payment). If the amount you can afford monthly is 1% or more of the balance, you should be fine, but they may press you for financial info. If you don't like the rep you're speaking to, just say that you're going to hang up and call [insert name of the liaison]. That may get you a little better treatment. If at any time the liaison cannot resolve your issues, you can contact the DOE, but they basically won't work with you unless the liaison doesn't help you.

Under rehab, you will need to make at least nine monthly payments, within a certain number of days of the due date (I think it's 20). DON'T EVER BE LATE. If you fail to make timely payments, you are booted out of rehab and you have to start over. Once you make the 9th payment, the DOE will resell your loan. Sometimes that takes time and you may need to make a 10th payment during the process. When you are finally out of rehab, the default notation and late payments are removed from your credit report and the positive payments will begin to show up.

Best of luck to you.

How did you manage to get the collection fees disappear? Did you have a prior agreement with the collection agency before starting the rehab?

Collection fees are waived for those who who are assigned to the DOE and complete the 9 payments and are rehabbed. If you have a FFELP loan, they are not waived

Congratulations!!! I just turned in payment #2. Nine months seems so long...

It'll be here before ya know it

Thanks and good luck with your rehab!

I pulled my EX report a few days ago and my SL is showing as open/never late.

Well...i am glad someone's loan is being bought back...i have 6 or so loans totaling 14,000+ (thats with added collection and fees and what not) and i started my rehab March of 2008...it's now February 2009 and getting ready to make my 12th payment (the contract i signed stated making 9 monthly ontime payments) on the 26th and still no one to buy back my loan... i called them yesterday, ACT, and talked with Candy and she said due to the economy there are no lenders buying back the loans...she showed i had 6 loans from various lenders...EdSouth, JP Morgan and so on...TSAC told me the same thing...the economy and no one was buying back my loans...so i have no idea what type loan i have and evidently it does make a difference...(Direct or FFLAP) im beginning to wander if my loan will ever be rehabilitated, and what if any it will make on my credit report...Candy told me ALL negative reporting on my credit report will be gone...like i never had the loan at all...so is this true? and what the heck do i do now...my tax refunds taken and i was hopeing this would be rehabed before April so i can get my refund back...this is with Tennessee Student Assistant Corporation (TSAC) guarantor and Account Control Technology (ACT) collection agency

A lot of lenders are going thru this right now and there doesnt seem to be any end i sight. Only other option is consolidate it to get it out of default. Plus with that many payments, you should be off the tax offset list....TSAC was always good about removing people who were in repayment. Have you asked them if they had a lien on your taxes?

I'm in the same boat as you. I've now made 15 on time payments of 500 bucks a month. The only thing I've heard from the CA is that nobody is buying rehabbed loans and I'll still have to keep paying the CA. 15 months ago they made it sound like I'd be in the clear after 9 months.

If I was able to pay the CA the remaining balance would the loan be counted as being rehabilitated? I wonder this because I was told after somebody else bought the debt it would be like I never defaulted. Though these folks don't seem like the most trustworthy people as the girl told me her name was Kristen when she called me and then the next day when I called her back she answered her phone as Ericka. She also tried to change the condition. Claiming I had to pay 5 grand up front, until I told her that 500 dollars a month was what she originally offered me.

They also took my "Economic Stimulus Check" this summer. Oh well.

15 months ago there was no problem getting rehabs. The problems have gotten worse over the post 90 days or so.

You paying the debt off wont rehab it. Rehabbing is governed by the Higher Education Act.

Consolidation is always an option, although it wont do anything for your credit. However it will get you out of default.

Yeah, that's what I figured. Thanks for the info though.

I was afraid of this. I make my 9th payment this month to ACT for TSAC, originally EdSouth/EdFinancial and whatever other names they have had.

Hope things loosen up. I want my credit clear.

Lynn, are any rehabbed loans getting purchased now, or are some taking longer than others? Mine is fairly uncomplicated, one single loan with a balance of ~$5,500. I'm hoping that with a relatively low balance and not having multiple loans, my process in June will go fairly easily. I can really use that 23 years of history that should show up on my CRs.

Who is you guarantor? It all comes down to whether your guarantor has a lender...doesnt really matter if it is a $5000 loan or a $50k loan....no lender is no lend.

My original lender? It was something like EdFund. It ended up being taken over by Sallie Mae many years ago. Now I'm doing the rehab through the DOE, not a CA. sixth payment goes out next week.

What's amazing to me is that all of these big banks have billions in stimulous money, yet they won't take on loans that are guaranteed by the federal government.

Edfund is a guarantor, Sallie Mae was your lender servicer. If the DOE is now involved, that sounds like your loan in default for several years, correct?

More than several years... many many years.

I just remembered as I was walking up from the subwy that the original load was through EducAid (I think that was it.. I remember seeing papers from the school and a packet from them).