I joined the William D Ford Direct loan prgram http://www.ed.gov/offices/OPE/DCS/ I've been in this program for 2 + years making my payments as agreed. When I enrolled one of the selling points was that my previous defaulted Student loan would be removed from my credit profile after 12 months of payments. When I completed the 12 months I called the US Dept of Ed and ask when this would happen, THey told me to call the creditor ( Citibank) Citibank said that they have to right to continue to report the negitive info on this debt. But if you read the link below it clearly states that the info will be removed http://www.ed.gov/offices/OPE/DCS/consolidation/rehab.html Please advise what I can do, Has anyone else had this problem? Steve
Citibank is refusing to do wha BTW: I called the Dept of Ed and told them what CITIBANK said, They said they could not force them.
RE: Help with Student loan reh I have had the same problem. I rehabilitated my student loans but the original creditor, Fleet Bank, refuses to delete the negative entries. It seems so darn ridiculous - why bother to rehabilitate in the first place if the negative will still remain on your report? I have disputed this with the CRA's and nothing - my next step is to contact the Dept of Ed ombudsmens office to see what they can do.
RE: Help with Student loan reh I've contacted the Dept of Ed, They responded by saying that they can not force the removal of the entry.
RE: Help with Student loan reh I'm in the student loan rehab process now and if what you say is a common practice (which it appears to be), I am wondering why I am bothering with these huge payments. Consolidation offered more manageable payments, but a negative would have remained in my credit file. The purpose of the rehab program was to give an incentive and some hope. Congress passed this law and it might be a good idea to contact our representatives and find out why the provisions aren't being enforced.
RE: Help with Student loan reh Sorry if this is long but I want to be clear and provide direction. The higher education Act of 1965 and the 1998 ammendments clearly states the required Statutes of this Act. If the dept of education or the lender involved do not expunge the prior delinquent history after you have succesfully rehabilitated the loan then they have violated the HEA and the FCRA and can be sued. It will probably take one student who is sick and tired of being told that the dept of edu cannot enforce it and finding a fiesty attorney who will file a suit,possibly a large class action. It is absolutely stated in the Act that the previous delinquency will be removed. Not doing so violates the Act and your constitutional rights! There is no wording in the Act of "maybe" or "qualify for possible deletion". It is clear and consise and must be followed. Below is a portion of the importance to this statute. I recommend those affected print that portion out and send a demand letter to both the previous lender who refuses to remove it and the dept. of education along with a copy to Gail McLarnon, Program Specialist, Program Development Division, Office of Student Financial Assistance, 400 Maryland Avenue, SW, ROB-3, Room 3045, Washington, D.C. 20202-5449. Citibank clearly does not understand the Act and looks upon it like a credit card debt. They must remove it period per section 674.39> Section 674.39 Loan Rehabilitation the statute. We believe it is helpful to review the aspects of loan rehabilitation that relate to borrower benefits and institutional responsibilities that are required by law, and therefore cannot be changed. Under the 1998 Amendments, a defaulted loan is considered rehabilitated if ``the borrower of a loan made under this part who has defaulted on the loan'' makes the required 12 payments. Accordingly, loan rehabilitation is available to all defaulted borrowers with a loan. If a borrower requests loan rehabilitation, the institution or its servicer must allow the borrower to rehabilitate his or her loan. This also applies to defaulted loans that an institution has placed with a collection agency. However, the borrower may only rehabilitate a defaulted loan once. Because the statute specifically refers to a stream of 12 payments as determined by the institution, the institution must work with the borrower to determine a payment amount that is appropriate. The statute does not require a signed rehabilitation agreement. In accordance with the 1998 Amendments, once the loan is rehabilitated (after the 12th payment has been made), the institution or its servicer must request that any credit bureau to which the defaulted loan was reported remove the default from the borrower's credit history. The borrower is brought current and is no longer considered to be delinquent or in default. Removing the default is consistent with the requirements of the Fair Credit Reporting Act (FCRA), which requires that an institution correct and update the information it furnishes to a credit reporting agency. In this case, the institution would be updating the borrower's credit history to reflect the rehabilitation of the loan. The FCRA also requires credit reporting agencies to have reasonable procedures in place to accept updated or corrected information. Once the loan is rehabilitated, the borrower is subject to the terms, conditions, benefits and privileges of the borrower's original promissory note. This includes eligibility for deferments, forbearance, cancellations, and flexible repayment options. The borrower is also subject to the same responsibilities under the note, which include, but are not limited to, making regular payments and informing the school or servicer of an address change or the need for flexible repayment arrangements. We sum up this status by saying the borrower is returned to regular repayment status in Sec. 674.39(b)(1) of the regulations. Finally, in accordance with the 1998 Amendments, a borrower who has rehabilitated his or her loan re-establishes eligibility for Title IV student financial assistance, as long as the borrower is otherwise eligible. I hope this has helped some of you. Kristi Steve1040 wrote: ------------------------------- I joined the William D Ford Direct loan prgram http://www.ed.gov/offices/OPE/DCS/ I've been in this program for 2 + years making my payments as agreed. When I enrolled one of the selling points was that my previous defaulted Student loan would be removed from my credit profile after 12 months of payments. When I completed the 12 months I called the US Dept of Ed and ask when this would happen, THey told me to call the creditor ( Citibank) Citibank said that they have to right to continue to report the negitive info on this debt. But if you read the link below it clearly states that the info will be removed http://www.ed.gov/offices/OPE/DCS/consolidation/rehab.html Please advise what I can do, Has anyone else had this problem? Steve
RE: Help with Student loan reh Student loans are win-win money makers for banks. The loans are insured by the government (Stafford, Perkins etc.). At the very least you should consider consolidating your loans through another lender, then sue for damages for violation of your rights. Debt consolidations can offer you a much lower obligatory payment with extended terms. You can always pay more each month, but at least you would have smaller payments to fall back on in lean times. I finish graduate school in two years and will have $$$$ to pay off, I'm already shopping consolidation loan lenders.
RE: Help with Student loan reh That's right! There's no room for interpretation and cleaning up your credit is the whole point of the law. Without that incentive, the intent of congress is completely lost. Congress should be made aware of this.
RE: Help with Student loan reh CarreonandAssociates: Please provide a link to this statue, I'd like to refer to it in my letter.
RE: Help with Student loan reh 1040, I think your problem may be that the loan had reverted to the guarantor, and it is they who offer rehab. The original lender apparently takes the position that the whole matter is no longer their concern, and so they continue to report the derogatory. I have great respect for the info Carreon has been providing to this board, but let me share my little tidbit with you which seems to contradict Kristi. When I was contemplating rehab I called the guarantor, TGSLC, the young man explained the familiar story, that after rehab the derogatory would be removed from my file. For some reason, maybe because if something sounds too good to be true....., anyway I asked him if anyone ELSE would be reporting the derogatory. And lo and behold, after a slight hesitation, he said, "yes"! The original creditor would continue to report the loan. The young man implied that the original lender was not implicated in the rehab agreement. A direct contradiction of Kristi's interpretation. Well, I hope Kristi is correct, because I am over 6 months into my rehab- which I thought worthwhile even if the original lender continued to report- I owed em the money.
RE: Help with Student loan reh Michael: This CAN BE a successful argument with the dept. of Education. Law is law and I believe a good attorney would beat this. I myself have challenged this before and after many arguments, letters and bringing forth the statute, the clients history was removed. It is a tedious tiring process because you have to go through it several times simply because no one seems to understand the exact purpose of the rehab Act. Whether the original creditor agrees or not is moot. Let me explain why. The HEA and the amendments clearly states that if your loans are rehabilitated that the loan will be re-insured and the previous credit history will be removed. That sentence alone applies directly to the original creditor (the one reporting the delinquency prior to rehab.) The statute does not rule out any one creditor and is very ambiguous. This is fortunate for students because this means that the promise to remove is set in writing! No student even has to bother getting a written agreement because it is a statute and cannot be argued or denied. When you argue it just cite the The higher education Act of 1965 and the 1998 amendments section 674. How can they argue that? Now, if there are exceptions then let the DOE state exactly why, ie, stafford loans don't count, FFEl has a higher statute etc, but for no one to argue why it does not apply is sad. I would want to know specifically what law overules my particular loan rehab scenario and the statute of it. If they can't give you an answer that is legally traceable,then they are wrong! God, I just love it when you guys get my dander up on a thursday! Don't you know I'm mentally preparing for the Delahoya fight!!! Go GoldenBoy! MichaelOH wrote: ------------------------------- 1040, I think your problem may be that the loan had reverted to the guarantor, and it is they who offer rehab. The original lender apparently takes the position that the whole matter is no longer their concern, and so they continue to report the derogatory. I have great respect for the info Carreon has been providing to this board, but let me share my little tidbit with you which seems to contradict Kristi. When I was contemplating rehab I called the guarantor, TGSLC, the young man explained the familiar story, that after rehab the derogatory would be removed from my file. For some reason, maybe because if something sounds too good to be true....., anyway I asked him if anyone ELSE would be reporting the derogatory. And lo and behold, after a slight hesitation, he said, "yes"! The original creditor would continue to report the loan. The young man implied that the original lender was not implicated in the rehab agreement. A direct contradiction of Kristi's interpretation. Well, I hope K....
RE: Help with Student loan reh Tricky wording seems to be the key to every evil in the student loan program. Student loan servicers always seem to think they can outwit the language of the law by deeming that it doesn't apply to them for some reason. And, in fact, it doesn't apply because oversight by the Dept of Education is a total joke. Someone in an earlier thread mentioned that some upset student loan default is eventually going to snap (I'm paraphrasing) and begin a class actions suit against the Dept of Education. Well, that person is me. I already filed suit against them in court. Let me give some examples of tricky wording conceits loan servicers use. 1) Often after a defaulted loan is satisfied, the guarantor will report a zero balance but 120+ days past due status in the status column (email me direct if this happened to you, I want to talk with you about it) on the Equifax report. However, they note in the description that you are paid in full. So, the credit score is pulled down because the status column is where the scoring occurs, not the description area. Here, they want to think they meet the legal obligation to update status. But they don't. 2) After my loans were paid off through reconsolidation, I noticed I was being reported past due to credit bureaus. So, I went and got a letter from them stating my loans were paid in full. However, they continued to report me past due and owing. So, what does "paid in full" mean to them? Well, apparently only the principal balance was paid in full, not the collection fees. Can you believe that? 3) The back of my promissory note states the collection fee will not exceed 25%. However, there are also vague references in the Code of federal Regulations to other charges. The Guarantor interprets that (apparently) to mean the other charges are in addition to the 25%. So, when the loan reconsolidated, they included the 25% collection fees. However, they later began billing me via credit report (yes, that is how they bill--not on a regular bill sent to your house) for extra fees of 33% more. However, a clearer inspection of "the code" explains that all fees are not to exceed the amount the dept of ed would have charged under the same circumstances. Of course, the dept of ed does not charge more than 25% by statute when collection occurs in house. There are other "tricky wording" issues which I'll skip because this is going too long. The point here is, though, that the Dept of Ed must perform oversight over these loan servicers, but refuses too. In fact, on of my complaints to them was signed by thier representative "business partners." This obviously meant that the DE considers itself business partners with the loan servicers (not the borrowers). This is a real offense. My 40 page fax to them clearly showed numerous contradictions, deceptions, and violations of law. However, the guarantor was defended by them in spades. Anyway, I snapped a long time ago. Anyone who wants to join me in my suit can email me with their name, street address, phone number, and full story. I'll get back to you. Thanks. Steve Anderson stephen_m_anderson@msn.com
RE: Help with Student loan reh When my turn comes, in about 5 mos., to remove the derogatory I hope you are just as feisty, because I don't think I am going to do it myself. DeLaHoya rules!
RE: Help with Student loan reh Steve, I was thinking, since we get a lot of visitors to our site looking for student loan information, I can request that a little message be added on the page http://www.carreonandassociates.com/stuloanrehabact.htm with your email address and name for those who want to contact you about this. If you want me to ask, just let me know here or at kf@carreonandassociates.com. I will recommend that we ad your name on the page and students can contact you. Thanks, Kristi MichaelOH wrote: ------------------------------- Good luck!
RE: Help with Student loan reh Please add me to your web page in any form you think may be helpful including my email address. Thanks.
RE: Help with Student loan reh I'm in the process of filling out loan aps for a student loan in default. I've been making payments for a few months to the collection agency. Again, my incentive to "re-locate" the loan is to have the negative marks taken off my credit report, however, after reading all of this, it seems as though the effort would be futile. Are there other benefits to relocating the loan other than the credit report? My payments would be only $6/mo lower than what I'm making now.
RE: Help with Student loan reh Steve, I got it o.kâ??d so please give me a brief description of what your trying to achieve. Make it brief but concise and I will have it added. Steve wrote: ------------------------------- Please add me to your web page in any form you think may be helpful including my email address. Thanks.
