Defaulted student loans and EX, EQ

Discussion in 'Credit Talk' started by Mark999, Oct 24, 2001.

  1. Mark999

    Mark999 New Member

    I defaulted my student loans in 1993. After reading the material at Dept of Ed website and the various posts here, I've decided to go through the rehabilitation route since it's the only way to really clean up my credit record and bring up my score. So I ordered my credit reports from the big 3 to see how bad it currently is. I received the 2 reports (from Equifax and Experian. I haven't received TU report) through the mail last week and SURPRISE:

    None of the defaulted loans are listed in the reports. I know for sure I had 20+ lines of bad notation regarding these loans in my Experian report a couple of years back. BTW, current Experian does report the 3 recent requests by my collection agencies: "Collection purpose".

    My questions are:
    1) I thought student loans are listed forever (or until they're paid off). How come they are off mine?
    2) I still want to pay off my loans (and get the CA off my back). However, I wonder if I should go the rehab route or negotiate reduced settlement? If settlement, I wonder if the partial paid off will be a negative notation on my report? I am assuming once I resume payment, this new activity will restart the clock on my credit reports. I am considering settlement because I assume I can reach a reduced payment amount with the CA.

    Any comments/suggestions?
  2. roni

    roni Well-Known Member

    Wait.. you're only 2/3 of the way there... not every creditor reports to all the cras.... it could still be on the third.

    Let's say that it is... obvious then you will want to rehab the account... 12 on-time or early payments will wipe of FEDERAL guaranteed student loans negative imformation. If it's a personal guarantee, you SOL...

    Let's say that it's not.... You said you want to settle... if it is a Fed loan, they will not settle for less than 100%. You can consolidate all the years into a single tradeline/loan to begin payments or rehab still rehab the existing loans...

    BTW, if it's not listed now and you contact them to correct you error and make payment, DON'T be surprised if they add the entire history to your credit report....
  3. Mark999

    Mark999 New Member

    Regarding settlement, since my balance now include Original loan + Interest + Collection fee, with the Interest & Collection fee portion > 60% of the total debt, I thought the Fed will definitely want 100% of the principle, but is willing to wheel & deal with the interest & fee portion. I could be wrong. (They're Stafford loans, BTW).

    Regarding TU may still report these loans, you could be right. However, they were in my Experian report a few years back and now they're not.

    I suspect once I start paying, all loans will be reported back on file. I'm curious if anyone has been in this situation before?

    Someone may suggest NOT to pay. I want to pay, if for nothing else, I don't want the CA to go after me for the next 100 years. Life is too short to worry about collection calls during dinner time :)

  4. roni

    roni Well-Known Member

    Problem is your thinking like a normal credit line... The Higher Education Act allows for all of that interest and collection fees.

    Don't pay? Bad idea... They will block your income tax refunds and THEY NEVER GO AWAY. There is no statue of limitations on government backed loan (including mortgages) and they can not be discharged in a bankruptcy... You're SOL....


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