I took out loan (FFEL)when I was in university and now I am still paying Guaranty Agency every month since 1991. Recently, I pulled credit report from all 3 CRAs and found 2 inquiries from the same collection agency (Conserv) which I didn't recall authorizing then I sent them letter asking them. They reply me that I owe them for Perkins Loan since I was in commnunity college. I thought the loan I am paying now to Guaranty Agency included this loan also. And Perkins Loan is about 10 years ago. No one contact me. No letter, No call from Collection Agency. Suddenly after I sent them letter about inqury they just surprise me that I owe them.
I also called 1-800-4-FED-AID and they told me that it's default since 16-06-1991 with Commnunity College.
What should I do now?
RE: Perkins Loan--Surprise!!
Hi, this happens alot. It also happened to me recently, if you look at my old post. You must contact the holder of the student loan. They will more than likely ask for payments. Perkins loans are still held by the community college instead of the guarantor. In other words when you start making payments you can make your checks out to the college. This being said you should also contact the community college, financial aid administrator at this time and set up a rehabilitation program. In 12 months the default will be removed from your credit report and records. That is what is truly important at this point. If it is not on your credit report now, chances are it will be put on your report as soon as you start making any payments. Now it is laying dormant. But the inquiries to your credit report wasn't for nothing. It was a little warning. Rehabiliation is your best option. Your loan officer should be able to supply you will all the info you need to rehabilitate your student loan. Good Luck.
Thank you so much--Roni---
Roni, Thank you so so much for your quick reply.
I just called the community college. My original loan is about $600.00 and I have to pay interest and end up with $1,300. Also, I didn't see any records about this default or collection on my 3 CRAs report yet. But as you said it might be there soon. As the original default date on 12-06-1991, I was wondering If I would like to pay in full now, Will those records be gone? or not show up on my 3 CRAs. As I read a lot of your posts, you mentioned that the record will drop off after 7 years from the original default date. Is it too late to pay in full now? Or I'd better rehabiliate my student loan. How can I deal with the collection agency which I just received the letter from them?
Thanks again I really appreciate your help.
RE: Thank you so much--Roni---
Student loans are not subject to the 7 year rule while unpaid. That is why it can appear now even though 7 years has past. There is a chance that if you pay the whole $1,300 that it may not reach your report. But this must be established with the community college. They can set up any kind of plan. If they dont tell you in writing that they will not report the delinquency, I would rehabilitate. You see even though it defaulted in 1991, you were delinquent on the account until the present time and they can report the delinquency from 1994-on. Be careful. That has been my experience with perkin loans. I know you are eager but paying any amount now may put it on your report. Once paid in full you have no leverage. However, you could alway dispute the account after paying. You have some decisions to make.
Thanks again Roni. I will call community college tomorrow and will asking in writing if they don't apply I will have to rehabilitate. And I will let you know tomorrow.
Thanks again for your help.
I just called community college. They refuse to guarantee in writing. So I just decided to rehab for 12 months at $70.00 a month. And they will send me the agreement to sign and send back.
Thanks Roni for all your help.
Can you rehab such a small loa
I also have a defaulted student loan (not perkins) which has been placed for collection. When I contacted the collection agency, the person I spoke with said that they can't put the loan in rehab if you owe less than 1,500 at the end of the 12 months. I'm not sure if this would apply to your perkins loan, but you may wish to check on it before wasting a year on payments if it won't help you.
RE: Can you rehab such a small
I've never heard of that minimum cap before from either the Dept. of Education website, the Direct Loans consolidation package for defaulted loans, or the DOE Ombudsman office.
Collection agencies lie all the time, as one told me I could not rehab my student loan and that they would "sub-brugate" it. Both statements were flat-out lies and the agency got into deep trouble when I call the guarantor about the conversation. I wonder if your collection agency was lying to you. Sometimes they don't want to rehab, so they can clear accounts faster.
If they send him a rehab agreement, and he signs it and sends it back, then they *have* to rehab. If they mess with him, I'd call Pamela Moran with the Department of Education to follow up.
RE: Can you rehab such a small
I got the letter from Collection Agency also but I called my school to find out about this loan first. I wasn't aware of this debt. The financial aid officer told me that I can rehab and will send out rehab agreement for me. They also told me that they will call collection agency to stop contacting me. I will only have to deal with my school not Collection Agency.
RE: Can you rehab such a small
The collection agency I am dealing with is apparently operating under contract with the DCS (government collection office).
Unfortunately, my calls to the Dept. of Ed. for information about rehab keep getting passed down the line to these people, so the only info I have to go on is from them and from here. They are trying to convince me to 'consolidate' my loan, and have told me that would clear up the entry on my CR the same way. Some posts on here have said otherwise.
Currently I am assuming that they are trying to set up repayment in the way that is most profitable for them, but I don't know where to go for unbiased info (except here, of course).