Someone please help me understand bureacracy? I don't understand this at all.... I graduate from college this December (no, really, I'm going to graduate this time). After losing a disagreement with Nelnet about whether or not correspondence courses count as 1/2 time enrollment, I had 6 months of lates reported on a handful of accounts with Nelnet. I requested a forbearance in the end, and they granted the request, covering all missed payments back to the original missed payment date. But they won't remove the lates reported for that period. In their (now) posted forbearance terms, they state that "Forbearance will not eliminate any prior derogatory credit history." Not even if the forbearance is granted back to the original date of delinquency. I have attempted to point out that a forbearance back to the original delinquency means they didn't expect my money and therefore I ask, how can this money that was not epected be late? They do not follow this logic. I have spoken with customer service via phone calls, email and a Goodwill letter, and they refuse to remove the late reporting. Then they told me to dispute my account with the CRAs if I have a complaint. Why would I do this when they've already told me they'll verify?????? I mean, I could get lucky, but what a pain in the butt. Their Forbearances policy is posted at http://www.nelnet.net/repayment/forebearance.asp?type=B Which brings me to my current dilemma. They offer a strange second option. If I actually choose to default on my student after graduation, on purpose, then I magically become eligible to make all the credit problems caused by my student loans disappear by requesting rehabilitation. They are required to provide rehabilitation. Once your 12 months are up, they have to remove ALL derogatory entries. from Nelnet: http://www.nelnet.net/faq.asp#4 If you do default, start immediately to repair the damage before it gets worse! Contact your guaranty agency and work with them to establish a workable repayment schedule. By making twelve (12) consecutive, on-time, full payments, you could obtain rehabilitation. That will restore your status (and benefits) as a good borrower. What's my incentive not to default on my loans again? If I'm willing to avoid applying for 'big credit' for 21 months (9 months to default + 12 on time payments), I can force them to fix my credit report. And it costs them more money in the end. Or they could just remove the !@$# lates in the first place since they granted me the forbearance.... any ideas on who I should talk to about what's obviously an arbitrary policy with regard to forbearances and what kind of request I should make? If I have to spend 21 months with additional dings to my credit for the federally guaranteed payoff of all dings removed, so be it, but does anyone else see these two policies as dumb when compared side x side? Any ideas on how to approach this besides choosing to default?
The link doesn't say they will fix old late payments on your credit report. It simply says that they will restore your record as a good borrower. What does that mean? Most likely, they will restore your record with THEM (on their internal records)...not with the credit bureaus. They will still trash your credit if you default...make no mistake about that. Also, they will take your tax refund, and possibly garnish your wages. Don't defualt on a student loan. You don't want that kind of trouble...unless you're planning on leaving the country.
When I was signing up for my student loans I read all of the paperwork. It's the same as selling your soul to the devil. There is no way out of it except the rare circumstance. Kind of like that one episode of Paradise Island.
Re: Re: Student Loan Forbearance VS Default from the feds: http://www.ed.gov/offices/OSFAP/DCS/repaying.html My credit record is tarnished because of my defaulted student loan. Is there anything that I can do to improve my credit record?" Failure to repay your defaulted student loan can be damaging to your credit record. In fact, consumer reporting agencies may continue to report an account for 7 years from the opening date. However, there are several things that you can do to at least partially, and in some cases, fully restore your credit record. Your options for bettering your credit report include: repay or satisfy the loan in full; consolidate your loan through the FFEL loan consolidation program or the William D. Ford Direct Loan Program; or rehabilitate your loan through our loan rehabilitation program. If you want all negative credit reports made by the Department to your credit record, you must successfully complete our loan rehabilitation program.
Re: Re: Re: Student Loan Forbearance VS Default Nowhere in there does it say that they will remove or change accurate information. It's the same line you'll get from Citi or Capital One if you have late payments on your report. "Sure, we'll make better if you pay." They're dangling a caarrot in front of borrowers who are late on payments. Defaulting on a student loan is a really bad move. Be careful.
Re: Re: Re: Student Loan Forbearance VS Default The only thing that will be changed on your credit report if you rehabilitate is the default. The late payments prior to the default stay the same.. they do not change. It is suppose to show the student loan as current but it will not erase any late marks previous to it.. so that will stay on there for 7 years.
