Hummm...My favorite subject. There is NO SOL for student loans. They will collect the money and interest plus collection fees by any means necessary. It will stay on your credit report indefinitely. It may come off when paid or seven years later. Student loans are treated differently than other debts. If you owe a student loan, I suggest you call your lender or the dept of ed and work out some form of repayment before they garnish you. True Story: My former office manager's 1999 Income Tax Return was garnished for a student loan from 1978. This type of thing happens alot.
Roni is right there is no SOL for student loans... so settle with the Dept of ed fast before the acctn is sold to a collection agency. Good luck !
Jamie, There is no SOL. You *will* pay this back one way or the other eventually, since the DOE will garnish your wages and take your tax returns for as long as you are alive. Call your servicer and ask for a rehabilitation on every single loan you're in default on. The servicer has to grant you the chance to rehabilitate, based on DOE statutes. The servicer has to send you a rehabilitation agreement saying that they will rehabilitate if you pay for 12 months straight. When you rehabilitate, you'll pay 1.5% of your total loan amount for 12 months straight. You can't have a single late or missed payment or the deal is off. So, give them twelve check numbers to be deposited on a montly payday, and you should be fine. It is VERY important not to miss a payment or be late. After rehabilitation, the servicer will sell your loan to a new servicer, remove all negative info about that loan from your credit reports and you will not be in default and you will be able to get new federal loans if you choose to go back to school. If you can't afford a 12 month rehabilitation, you can consolidate after 3 months (do it with Direct Loans or the William D. Ford Foundation), which will take you out of default but will not remove negative info from your credit report. I just rehabilitated and got 8 loan entries removed from my credit reports. The final cost is higher (your interest and collection costs will become part of your new principal) but it's worth it to have it out of default and off your credit report. Marci
Thats the thing, this loan does not appear on my credit report. The only correspondance I have recieved is from the Dept. of Treasury saying that they applied my tax return to the debt. It appears that it is already in the Dept. of Eds hands. This loan is from the early '90's. I don't want it to appear on my report due to me opening a can of worms. See what I mean. It probably isn't any more than a couple of thousand, Last I knew, I owed about $1300 on it. The letter I got from the Treasury doesn't state how much is owed on the loan. I'd prefer to get a new bank loan to pay it off and be done with it.
Just because it is not on your credit report now doesnot mean that it will not show. If it shows later, it will be on there for 7 years. Why dont you do the smart thing, and get this taken care of before it affects your credit. The Deptof Ed will supply you with many options. CONSOLIDATE OR REHABILIATE. Check out the CarreonandAssociates.com guide to student loan to get some guidance. Good Luck! roni
Thanks for the advise, now I've just got to get up the nerve to call, I hope I'm not sorry. Its not reported now, I hope they don't start reporting it negatively after I set something up with them. Or will it start all over again as a new loan with a good record?
If you consolidate, the dept of ed will not report it negatively. They will report your current positive info. If the lender who has it now has not reported it negatively, it may not reach your credit report before you finish the consolidation process. If you rehabilitate the loan, it will not matter because they will put a special notation on the loan until the 12 month rehab period is over, and then all negative info is removed from your credit report concerning the student loan. The consolidation process takes approx 3 months. Get the paperwork and the info from the lender quickly and return the forms to save time. Also when you start 'waking up' the lender, depending on their nature they may start asking for payments. That is ok, consolidation actually is suppose to involve 3 ontime monthly payments. (But no one actually checks. shh!) Once consolidated you have 0 balances and no worries except to repay the loan. If you rehabilitate you may have to deal with negative credit for 12 months but then it is gone. That surely beats 7 years. You have many options- All good ones. Good Luck. roni
That's incredible information! I remember reading the same thing years ago, but I didn't know if it was still the same. Where can you find these policies from the source?
GO TO: http://www.ed.gov/offices/OSFAP/DSC/contact/index.html Happy Reading. roni Jason wrote: ------------------------------- That's incredible information! I remember reading the same thing years ago, but I didn't know if it was still the same. Where can you find these policies from the source?
Jamie, Depending on how much you owe, you may be able to take out a bank loan and pay it off. It is my understanding that paying it off in full in one payment will take you out of default and remove any entry from your credit report. BUT I'M NOT SURE. SO you need to call the 1-800-4fed-aid (1-800-433-3243) number to find out all the federal loans you have ever had and the servicer who is currently holding them. Then call Direct Loans (1-800-557-7392) for an information packet about consolidation and rehabilitation. Then, call the servicer who has your loan, ask for the balance, and - if you pay the total balance- ask if that will take you out of default and remove any possible entry from your credit report (current or future). If you can't pay the total balance, then set up a rehabilitation program with the servicer. Hope this helps, Marci
