This is long but hang in thereâ?¦If you are like me and have several bad school loans (ie:FFEL) standing between you and the 700 club, then you probably are interested in the following information I dug up. However, keep in mind that I only researched information on loans that have been defaulted and rehabilitated, or paid late 120+days) Also, I cannot take credit for finding the link where this info is at. I canâ??t remember who (speak up if itâ??s you), but someone on this board has already provided a bit of information on this topic. The following information is from CFR 682.405 (pg 739-40) http://www.access.gpo.gov/nara/cfr/cfr-retrieve.html regarding loan rehabilitation agreements: 1)This statement alludes to the benefits of clearing your report of bad credit if you rehabilitate your loans. â??The statement must inform borrowers of the effects of having their loans rehabilitated (e.g. credit clearing, possibility of increased monthly payments).â? 2)OK, so the following addresses â??defaultedâ?? loans and requires that the default status be removed within 90 days. But it doesnâ??t say changed to what status. â??(2) The guaranty agency must report to all national credit bureaus within 90 days of the date the loan was rehabilitated that the loan is no longer in a default status and that the default is to be removed from the borrowerâ??s credit history.â? 3)Here is a little more detail about what must be reported to the CRA within 60 days after a defaulted loan is paid or rehabilitated: (Note my emphasis) The following information is from CFR 682.410 (pg 748-49) {section} â??(5) Credit bureau reports. (i) After the completion of the procedures in paragraph (b)(5)(ii) of this section, the guaranty agency shall, after it has paid a default claim, report promptly, but not less than sixty days after completion of the procedures in paragraph (b)(6)(v) of this section, and on a regular basis, to all national credit bureausâ?? (A) The total amount of loans made to the borrower and the remaining balance of those loans; (B) The date of default; (C) Information concerning collection of the loan, including the repayment status of the loan; (D) Any changes or corrections in the information reported by the agency that result from information received after the initial report; and (E) The date the loan is fully repaid by or on behalf of the borrower or discharged by reason of the borrowerâ??s death, bankruptcy, total and permanent disability, or closed school or false certification.â? 4)So here is the section that propels the argument: The following information is from CFR 682.410 (pg 749) (emphasis mine) â??(iv)(A) In response to a request submitted by a borrower, after the deadlines established under agency rules, for access to records, an administrative review, or for an opportunity to enter into a repayment agreement, the agency shall provide the requested relief but may continue reporting the debt to credit bureaus until it determines that the borrower has demonstrated that the loan obligation is not legally enforceable or that alternative repayment arrangements satisfactory to the agency have been made with the borrower.â? So here are the points of discussion: 1)It looks as though a guaranty agency has to remove any status of â??defaultâ?? on your report, but can leave any lates? 2)If lates are left, once the loan has been rehabilitated or SOL has kicked in, doesnâ??t the agency have to remove all negative statusâ??? 3)The law above strictly requires that the agencies report monthly (â??regular basisâ?). So if they donâ??t, is there cause for litigation? 4)If you have loans that have any 120+days but no 30 or 60 day lates, doesnâ??t that point out that the guaranty agency didnâ??t report on a regular basis, or that the default was just changed to a 120+day late? 5)If a loan is in default it is also in collections in most cases. So if the default has to be removed, doesnâ??t the â??collectionâ?? verbiage as well? 6)The guaranty agency MUST report to â??all national credit bureausâ?. Iâ??m glad they didnâ??t, but is there a loophole here? My personal take on all this is once a loan is paid or in rehabilitation, the guaranty agency by law has to remove all negative information on your credit reports, and report to all three bureaus. Anyone see it different? I am in the process of creating a letter in the genre of the â??Nutcaseâ? family tailored for the student loan guaranty agencies to test this theory.
CMA, my loans are no where near paid or rehabbed, however, I was reading your post and have to go over it a couple more times. I see your point and look forward to working with you on this. I think that Sal826 may also be someone that can help on this one. Let me do some more reading and thinking and get back to you. Bump, lets keep this one lively
Yes, let's keep this one up, there has to be more than a few of us interested in getting rid of those nasty school loans. I'm sure some of this applies to open and unpaid loans as well. Between my wife and I there are about 20 TL (mostly duplicates) on our reports that should come off. Can you tell me more about your situation and later tonight I'll see what I can dig up?
I have a couple of loans some directly with the Department of ED, and then there are the loans that show up as different names on each report. AMS Servicing Group (collection account) Iowa College Aid Commission (defaulted loan, claim filed) Student Marketing Association EFG Technologies. On EQ the ICAC loans do not show the date open adn on EX they say the date I open them was in 1997. I was not in school in 1997. I know that these tl are inaccurate, but have not yet figured out how to dispute them to the CRAs. I was planning on sending some validations due to the date opened, but on the EQ is it clearly not complete, any ideas on next steps. Like I said before, I have only made a couple of payments on all my loans. But they are all in default and claims have been filed against the guarantor.
I have some ideas of which I mentioned above that might apply to you (in the first post). I'll look a little more tonight and get back with you later. I'm still struggling to understand gov lingo anyhow. You may be able to send them a specific validation letter (something I'm now working on) and because they would have to jump through so many hoops in 30 days it might just get them to delete the TL. But right now that's just speculation.
At least we can all work together for a mutual cause and if even one of us gets what we want, it was worth it.
So here are the points of discussion: 1)It looks as though a guaranty agency has to remove any status of â??defaultâ?? on your report, but can leave any lates? That's how it reads to me, too. However, more than just lates, some holders are not deleting info because they were once a holder and not the "maker" of the loan that the HEA sect. 464 states must remove. Sad, but true. 2)If lates are left, once the loan has been rehabilitated or SOL has kicked in, doesnâ??t the agency have to remove all negative statusâ??? There is no SOL for student loans, however, if you mean DOLA ( or SOL for credit reporting as some call it) , then they are like any other derog: must not be on report after 7 years. Of course, they can still collect, and will just sell it, and re-age it (in some cases legally) 3)The law above strictly requires that the agencies report monthly (â??regular basisâ?). So if they donâ??t, is there cause for litigation? IMHO, not really, but worth raising a stink about. 4)If you have loans that have any 120+days but no 30 or 60 day lates, doesnâ??t that point out that the guaranty agency didnâ??t report on a regular basis, or that the default was just changed to a 120+day late? I don't see that it proves that a guaranty agency is not reporting. If you never paid on the loans. Then you will have (I should say "I did have") a 120 late, with no 30 or 60s. In other words, you are correct at the end of your question--it is changed to a 120 from a 90 days late 5)If a loan is in default it is also in collections in most cases. So if the default has to be removed, doesnâ??t the â??collectionâ?? verbiage as well? I would think that the collection would be removed. again something to raise a stink about. 6)The guaranty agency MUST report to â??all national credit bureausâ?. Iâ??m glad they didnâ??t, but is there a loophole here? I don't see a loophole. I think it is clear that the guarantor has to contact all CRAs and let them know that the loans are not in default. NOw, how do they do that? I've no idea. I suggest that they *should* delete all old listings and report new listings in good standing. That is why I am disputing all of my old accounts as "rehabbed." By law the CRA has to check on it and that way I can find out how they are reporting them. I would like to see a clarification of the HEA on reporting and how the default is removed. 30ft.
30--- Thanks for the angle on disputing as rehabbed. I am still a bit confused and as stated earlier continue reading. Lets keep this one lively. BUMP
Thanks 30ft. You've provided some good insight and info. Regarding your comment â??I suggest that they *should* delete all old listings and report new listings in good standing. That is why I am disputing all of my old accounts as "rehabbed." By law the CRA has to check on it and that way I can find out how they are reporting them.â? What if I have disputed several times and the CRA is not responding anymore to my dispute? My next step is to validate with the guaranty agency, but what I am looking for are specific laws that can be referred to in the OC/agency dispute/validation. Simply by changing the reason to dispute with the CRA because the loan has been rehabbed hasnâ??t netted me anything. Calling them hasnâ??t done anything either-I just play the transfer to another department game. So how else do you suggest disputing? What could be used to hold their feet to the fire?
Hi Kbanger and everyone else here, First of all in reference to your issue Kbanger, you need to check the Dept of Education website and check EXACTLY what loans our wonderful government says you owe. Second, you need to send validation demands to every collection agency/creditor on your reports which are reporting tradelines pertaining to these loans. At this point you can obviously see what they claim you owe and then start rehabbing PLEASE NOTE!!!!!! this will no doubt open a can of worms and cause a feeding frenzy between all these ahole collection agencies, so don't do this unless your in a position to rehab them right now. As for how the CRA will report BEFORE the 12 months are up, well I can only speak from my own experience (and others that have went before me)and the DO leave the tradelines as "WAS COLLECTION" the only difference they did was changed them to "paying as agreed, was a collection" (yes this will temporarily screw over your credit score because now it shows it as an open account) With that said, you need to realize the negative tradelines WILL be totally removed (this is spelled out in the HEA and must be abided by.) Here's my opinion for what it's worth - if you never had a gov funded school loan JUST DON'T DO IT!!! ...and if you do have one and it ended up in default, make sure you rehab them - rehabbing restores certain rights you lost when you allowed the loans to default. Good luck, Sal
With that said, you need to realize the negative tradelines WILL be totally removed (this is spelled out in the HEA and must be abided by.) Did you have to jump any hoops to get them deleted? If so what action did you take? 30ft
Can someone tell me the difference between rehabing and consolidating. I keep getting collection letters from ACS to consolidate, but somewhere i heard this just reages and does nothing for you. I don't even know where to start to get rehabilitation. Kara
In short, consolidation is like taking another loan to pay an old loan. Good idea, if the rates are lower and you have no derog info on the old ones. Rehabilitation is only an option if your loan is defaulted. If so, it generally gives you a clean slate. www.ed.gov is a good place to learn the difference. There are several things you will need to know before you start; such as, your rights. Read as much as you can. Search the postings for rehabilitation, and for consolidation. There are some good threads on these topics. 30ft.
Assume you have a terrible track record in paying on the loans - usually late, etc., but you have not defaulted. Are you saying this person cannot rehab until he actually defaults? If he consolidates to get the better terms, won't he be stuck with all the past negatives? Or, is there some way to get those off as part of the consolidation? This sounds to me like the person in this situation is better off defaulting, then rehabbing, as opposed to consolidating. Am I right or wrong?
