fla-tan,

I'm sorry to bug you personally, but you're the only person I know of who's actually read the HEA. I'm working with the ombudsman's office to try to get my final negative SL tradeline removed. It's from the original lender. The ombudsman's office has told me that the HEA says that only guarantors are required to remove default notations, but original lenders are excluded.

In looking at the 1998 revision of the HEA, section 674.39, it says...



My interpretation of "the institution that made the loan" is that this directive isn't just limited to a guarantor. Actually, that phrase makes it sound like lenders are indeed bound by this statute. Is my interpretation off? Any other HEA sections or other documents that might help my argument?

Thanks for any help you can give me... Cheech

(edited to update title to be more general)

Well here's the update, just in case anybody else is going through this.

Apparently, section 674.39 of the HEA applies to Perkins loans only. Unfortunately, I had FFELP/Stafford loans. The law that applies to those loans is 42CFR682.405. Unfortunately, that regulation only addresses the duties of the guaranty agency and just doesn't mention the duties of lenders at all. Therefore, my original lender isn't required to remove the default notation (that sucks).

So, since the regulation and the HEA are up for renewal right now in Congress, I guess my next step is to start a letter writing campaign to get the regulations to include the duties of the lenders of FFELP/Stafford loans.

Does anyone know anything about these discussions? Where I might find the names of committee members who are discussing it? Anybody interested in joining my letter writing campaign?

Cheech --

Sorry for your predicament -- I guess this is one definite time when I can say that fortunately, all of my loans were held by the USDOE!

You can find a summary of the current status of the negotiations at the web page for the House Democrats at http://edworkforce.house.gov/democrats/hig...gheredinfo.html. I apologize if you are of a different "political persuasion," but I used to be a Democratic staffer, so that's where I know to look! You can also find a link to the Republican equivalent page from the above link, if you'd prefer.

In the Senate, the committee is the Senate Committee on Health, Education, Labor, and Pensions. They had a hearing quite a while ago (as in, last year!), but the Senate is almost always much slower than the House, anyway, although they call it "deliberative."

If you're looking for the members of those committees, try <<thomas.loc.gov>>. I'd also tell you to write your local congressman -- they really do read those letters and may be some additional help.

Just putting "reauthorization", "higher education act", "congress" and "committee" into a Google search will get you a ton of pages from agencies and groups that have their own take on this whole process.

Sorry for the geeky reply, but, as I said, I used to be a staffer and now I'm a legislative liaison for a state agency, so I spend my life doing this stuff! Enjoy!

Ziggy -

Thank you so much!!! That is exactly the kind of info I was looking for. I found a few sites, but not nearly as much info as you just gave me.

I also downloaded 34CFR and guess I'll use that to cure my insomnia for the next few days... lol. I just can't believe that the rules for FFELP loans are different from those for Perkins loans. That just has to be an oversight. It's not like the regulations prohibit or mandate lender reporting. It just isn't mentioned at all, so I guess they think that gives them a license to be buttheads.

In my opinion, that just is not in the spirit of the original legislation or the HEA. So my one little voice is about to be heard.

Thank you so very much again for the info. I'll keep ya updated.

Well, I finally have a happy update to my sob story. After the flat-out refusal of the original lender to remove my defaults (via a legal loophole discussed previously), and despite the efforts of the ombudsman's office, I was feeling pretty low.

Imagine my surprise - shock even - to receive a letter from them today in the mail. The original lender has agreed to delete these tradelines. OMG!!! It's a happy day at Cheech's house.

Now to get those stinking SM leftovers off.....

Oh, and I'm not giving up on my letter writing campaign to get the law changed. The entire original intent of the rehab program was to help people, not penalize them via legal loopholes after they stuck with the program and turned things around. Just because my lender finally took pity on me (or got tired of me... lol) doesn't mean this may not happen to someone else.

Good for you!!! Congrats!! I know there was a happy dance done in Cheech's house tonight!

As you're finding, intent of a law and what's actually written are not always (one could argue rarely!) the same thing. The sad thing is that they are oftentimes writing a law for one particular situation and not thinking of all of the other possible situations that may arise. Statutes are definitely often a clear example of the law of unintended consequences!

I've been thinking about your situation and you may also want to check transcripts of the floor debate from when this legislation was passed. It would probably be quite a feat, just because the HEA has been passed and reauthorized about 100 times and who knows exactly when these particular provisions would have been discussed, but it could possibly be fruitful. The reason is that when they were debating the bill, there's an off chance that the sponsor or someone else mentioned on the record that this particular provision of the bill (which, at the time, is what it was) was intended to apply to all defaulted loans. If it's there (and that might be a long shot), you could use that as ammo against the lender (something along the lines of "as you can see, the intent of this law was that it apply to you"). I'd first try your local library's reference desk. If they can't help you and you're anywhere near a university with a law school, you could try their library, although the librarians there aren't always as "user-oriented" for those not knowledgeable about the process. If you're by your state's capital, you could also try the state supreme court library. Again, not all have them and they might be even less helpful than the law librarians, but they may be willing to help. In any case, you're probably going to have to be willing to travel to the location. You could also just try a book on legal research (since you'd be at the library anyway!!).

Again, congrats!!

Dear Cheech,

I too have defaults STILL listed. Six of them. I did rehab, all my loans were bought out by SLM, and I even had more of them (cause I wasn't finished school yet.) Then when I finished I consolidated everything.

Three years later, I apply for a job. Wonder of wonders, it is denied because of my CREDIT REPORT. So, I apply to get copies of all three main ones on myFico.com and bought the Package that comes with dispute letters because of more things wrong on each report. At this time, only one company had the defaults listed, that was TU.

I send the letters, and now instead of only one company reporting them, now EX AND TU are reporting them (EQ hasn't yet responded). I'm confused.

I called the DOE, and SLM and USA Funds (who had the loans that were rehabed) and no one can tell me that I have any record of default. So what happened and how can I get them off my report?

Thanks,
I'm so confused.

Madie

Madie -

There's another of my threads floating around here where that same thing happened to me with SM/USA. USA was still reporting defaults 6 mths after rehab. I called up USA Funds and talked to the rehab department supervisor. She was able to get the defaults removed in less than a week.

I had some others that were reporting from SM (also rehabbed). Like you when I called SM, they had no record of the defaults in their system. I ended up having to send a letter to the corporate office with copies of what was on my reports to get those removed.

I'm guessing that once you've been done with rehab for a while, SM's system doesn't retain that info - it just shows that you are current on your loans.

So is it USA Funds that is still reporting the default notations? You didn't say in your post if it was DOE, SM, or USA reporting. Whoever it is, try to get transferred to the dept in charge of defaults, rehabs, and reporting to credit bureaus. They have the power to make things happen.

HTH -- Cheech

I had this problem and sent a letter to the president of my orginal lender with proof that I rehabbed and they deleted!!! try it.

Thank you all for your replies,

I will definitely send a letter to USA Funds and request (i.e beg) them to remove the tradelines from my CR.

Hey it's nothing but a try right?

Cheech, I will be sure to read your posts in further detail in an attempt to gain more knowledge about this issue.

Thanks again. I will keep you all updated regarding my progress.

Keep your fingers crossed!

Kaos

Cheech, Perkins and Stafford/Direct loans are funded differently by congress. The intent of a Carl D. Perkins loan was for individuals who were low income (having high need)and entering into a profession that served a population in need. Perkins loans are eligible for up to 100% cancellation if the student has graduated and serves in a capacity such as teaching in a teacher shortage area for at least 5 years.

Fwiw, Perkins loans may be on the chopping block by congress during reauthorization. There have been discussions to dismantle the loan program completely.

I KNOW THIS IS LATE, BUT I'M A NEWBIE. CONGRATS. I'M HAVING THE SAME PROBLEM. HOW DID YOU GET THIS RESULT? WAS IT SALLIE MAE? DID THE OMBUDSMAN HELP, OR DID YOU DO IT ON YOUR OWN?

i have done a lot to repair my credit since defaulting. in late 2003, i was at FICO 540. i am now up to 640-660 (depending on the cra). if i can get those dayum sallie mae tradelines deleted, i will have much better terms in the DC housing market....