First day of delinquency being reported as first day of default

[ΤexasGuy]

I think I got the title wrong but I don't know how to edit it, it should read:

 

First day of default being reported as first day of delinquency

 

I have 3 loans with Department of Education, originally they were Direct Loans in 2007, now they are called Direct Stafford Subsidized. I have consolidated them last year, they show "paid collection" as of now. Also, these 3 loans share the same first day of delinquency since I never paid for them once they got out of forbearance initially (other than through tax offset).

 

Now, the problem with the first day of delinquency. I am waiting for these loans to fall off this year and I found an error that will prolong them further than they must stay on. When I go to the nslds.ed.gov to view my loans, even the past paid ones, I can see detailed info of each loan. The details say REPAYMENT started on 7/2007 and then DEFAULTED 5/2008. However, on all credit reports it says that first day of delinquency is 5/2008. Correct me if I am wrong, but first day of delinquency is not equal to first day of default, right? Especially that non-educational institutions have 120 days before it becomes a default, I think. But here it is 270 days difference that pushed my hopes and dreams of having a clean report by another 9 months. Unbearable! I have already waited for a while...

 

I can see that the first day of default was calculated correctly (see image below):

Per Higher Education Act of 1965 Sec. 435(i) it says that the loan becomes in default after 270 days since non-payment, that is ~9 months. So, if the due date is on or about 07/2007 and the first day of delinquency would be 30 days late (I am reaching here), about on 08/2007, I'd say. Then add 9 months and you get about 05/2008. Sure, it is possible I fudge the numbers, let me know if I am, just my line of reasoning. If I am incorrect, please let me know.

 

This is a screen show for one of the 3 loans, others are the same date wise, just $$$ differs.

 

Point is, something is up and it might be affecting you too, do check! Instead of these negatives falling off this year, because of incorrect reporting it is being pushed up another 9 months for no good reason.

 

I called Dept. of Edu. today, people I spoke to have said that they have no idea who is reporting it internally, evidently Direct Loans were distributed to many different sub-departments within the Dept. of Edu (once Direct Loans ceased to exist). However, the people I spoke to did see that the first day of delinquency is set at 5/2008 in the system, they don't care why or who set it. They are unwilling to change, say they cannot do that even if they wanted. All they could advise me was to stop tying their phone lines and start disputing this info with the credit agencies.

 

So, I did with all 3 credit agencies, sent them all a fax with a letter, included my math (hope it is solid), and printouts from the website that show dates I am falling back to as my proof.

 

Well, what are your thoughts on the subject?

Edited March 6, 2014 by ΤexasGuy

[scvbd99]

If loans are defaulted, credit reporting works differently than for other debts. The creditor has 3 options for when to begin reporting defaulted student loans.

 

- from the date the defaulted loans are paid

- from the date they are first reported as a default

- from the date they default again

 

It looks like they're using the second option. So negative info will remain on your record until 7 years from the date they defaulted. In short, for the purposes of negative reporting on your defaulted loans, your de facto date of first delinquency is indeed in May of 2008.

 

Just be glad that they're not using the first bullet point, which would make it so that they could report the negative info for 7 years from the date your defaulted loans were paid, which was January 2014, when your consolidation went through.

[ΤexasGuy]

Sorry, it sounds unrealistic as you suggest there are no standards what so ever, as if they can just report any arbitrary number of their choosing. May I ask for a proof of your opinion?

[scvbd99]

Sorry, it sounds unrealistic as you suggest there are no standards what so ever, as if they can just report any arbitrary number of their choosing. May I ask for a proof of your opinion?

It's not an opinion.

 

http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1080a&num=0&edition=prelim

 

(f) Duration of authority

Notwithstanding paragraphs (4) and (5) of subsection (a) of section 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c(a)(4), (a)(5)), a consumer reporting agency may make a report containing information received from the Secretary or a guaranty agency, eligible lender, or subsequent holder regarding the status of a borrower's defaulted account on a loan guaranteed under this part until-

(1) 7 years from the date on which the Secretary or the agency paid a claim to the holder on the guaranty;

(2) 7 years from the date the Secretary, guaranty agency, eligible lender, or subsequent holder first reported the account to the consumer reporting agency; or

(3) in the case of a borrower who reenters repayment after defaulting on a loan and subsequently goes into default on such loan, 7 years from the date the loan entered default such subsequent time.

[ΤexasGuy]

You did not read that right. It means 7 years form the date the loan was made available - "paid ... to the holder (student)". Please don't spread incorrect information.

[hodap2001]

TexasGuy - You are confused! You are NOT the holder of the loan - the definition of the word 'holder' is Lender/Servicer of the account (the one you didn't pay which resulted you being in default!)

 

How in the world did you interpret holder as the student? Did the Secretary or agency pay a claim to you? No, they paid the Lender/Servicer.

[scvbd99]

TexasGuy, I don't blame you for not liking the facts that I posted. I'm just answering your question.

 

I truly hope that somehow you win your dispute.

 

Nothing else to say in this thread.

[hodap2001]

Don't worry TexasGuy - I'll still be around to assist you if need clarification.

[almostanonymous]

It always confuses me when people get so defensive when they get answers they don't like. Why even ask for help?

 

scvbd99's link is accurate and correct. Your derogatory information was first reported when the loan went into default, the date of which was May/08. They are legally entitled to report it in that manner. I had prior TLs on my CRs from the original / subsequent loan servicers from my default (which has since been addressed). The original account had the DoFD as the actual date that my monthly payment was first delinquent. The second account listed it as the month my loan went into default.

Edited March 7, 2014 by almostanonymous

[ncgirl84]

If loans are defaulted, credit reporting works differently than for other debts. The creditor has 3 options for when to begin reporting defaulted student loans.

 

- from the date the defaulted loans are paid

- from the date they are first reported as a default

- from the date they default again

 

It looks like they're using the second option. So negative info will remain on your record until 7 years from the date they defaulted. In short, for the purposes of negative reporting on your defaulted loans, your de facto date of first delinquency is indeed in May of 2008.

 

Just be glad that they're not using the first bullet point, which would make it so that they could report the negative info for 7 years from the date your defaulted loans were paid, which was January 2014, when your consolidation went through.

This is very helpful, i didn't know that and I'm still trying to make heads or tails out of my credit reports. damn you student loans.

[hodap2001]

Take it one day at a time and comeback to me if you have any questions or concerns