Consolidation considered a rehab?

I don't believe so. Boy would that be nice. I paid my loans through consolidation now they show up on EX and TU as paid collections zero balance.

 

If you are talking about rehabilitation of fed loans, then you must make 12 on-time, monthly payments. It's sorta crazy, especially when you have the money to pay the entire thing off.

 

Re: Consolidation considered a reha

Once you consolidate, you can no longer rehabilitate the individual component loans. That's because those loans are now considered closed. The consolidation loan is a new loan with its own tradeline.

Doc

 

Re: Consolidation considered a reha

Doc,

You have a good point but I disagree. Their is nothing in the Higher Education Act about not being able to rehab a consolidated loan (unless I missed it). It just says 12 on time payments so technically if I make 12 on time payments on my consolidated loan the negatives could be removed from my previous loans. "Could" is the optimal word there. For instance part of my loan consolidation were two loans from my university. I called my university and talked to them about the Higher education Act and rehabbing my loans. They agreed to delete my negatives when I completed 12 on time payments even though my loan was already consolidated and their tradelines on my CR's showed up as paid collections.

Nice signature Doc. It's refreshing.

Ed

 

Re: Consolidation considered a reha

Here is the government website for student loans:

http://www.ed.gov

 

Re: Consolidation considered a reha

This site also seems to be a good source of information.

http://www.carreonandassociates.com/stuloanrehabact.htm

 

Re: Consolidation considered a reha

With that new tradeline comes new differment and forebarence options, I believe.

Anyone know how a differed status affects credit?

 

Re: Consolidation considered a reha

Wow, Ed, I hope you're right! Thanks for the comment regarding the signature, LOL.

Doc

 

Re: Consolidation considered a reha

That is what the lender will try to tell you, but it's not the law! No where in the HEA does it say you can not rehab a consolidated loan!

I DID IT!

 

Re: Consolidation considered a reha

Very good info, Bkev! So would you advise students reading this board to go ahead and consolidate and then deal with the individual original lenders afterward?

Doc

 

Re: Consolidation considered a reha

No, I wouldn't advise that. Consolidation only helps people who want to get back in school immediately and need more loans. Anyone else should rehab. I'm just saying that the lenders always tell you that you can not rehab a loan that they consolidated.... it's wrong.

 

Re: Consolidation considered a reha

Yikes, the Department of Education's student loan info line (1-877-557-2575) is giving out some terrible information then! It's unbelievable -- you should call them yourself to see the kind of garbage they're spewing. The lady I just spoke with was very friendly but said, to quote, "Once you consolidate, there's nothing to rehabilitate because you've started over with a new loan." I wish those people were better trained.

Doc

 

Re: Consolidation considered a reha

Ask her to PROVE that.... These collections agencies are saying constantly that the loan will be consolidated after 3 payments and rehabbed after 12.... HOLD THEM TO IT!


I got the same BS with mine, but I quoted the exact section of the HEA and listed all 12 payments.

 

Re: Consolidation considered a reha

Very good, Bkev!

Doc