I know this has been discussed in the past but recent research of mine prompted me to create this new post, questioning rehab requirements. After reading the HEA section titled: Section 674.39 Loan Rehabilitation I don't see anything that says all negative entries must be removed once a loan is rehabbed. It DOES say that the DEFAULT must be removed but that's all it says has to be removed. That doesn't mean ALL NEGATIVES must be removed. PHEAA has also given me the same info - just the default goes away, nothing else. I called the Dept. of Ed and they said if they were servicing the loan, they would delete everything so it would appear that the loan was never late - period. They did tell me that it seems like the HEA is interpreted differently by different guarantee agencies though. Can someone point me to a legal document/opinion that states unequivocally that ALL NEGATIVES must be deleted? I hope so.
I'd be interested in seeing that too since my DEFAULT from NYSHESC was removed from all 3 CRA's, but I still have all 8 Sallie Mae's sitting there charged-off. (hopefully to be outdated and come off by 11/02)
PHEAA seems to want to play by their own rules. You might have received a letter from them saying that "after 12-14 payments, the default listing will be removed". 12-14??? The DOEd says 12. I am working now to rehab my wifes loans held by PHEAA. We can't afford their $300 monthly payment now, so they told me I have to send an affidavit of income and expenses. The letter that they sent with that says "...if you are approved for rehabilitation..." What do they mean if??? Bunch of morons, them PHEAA folks...
They did tell me 12-14. They said it's really 12 but they only process rehab applications on even-numbered months (Feb, Apr, Jun, Aug, Oct, Dec) so if my last payment falls at the end of an even-numbered month, the application won't be processed until the next even-numbered month; hence, the 14 payments. I can live with that. I just have not read ANYTHING, ANYWHERE that says ALL NEGATIVES must be deleted. The HEA specifically references DEFAULT only. It appears to be open to interpretation.
Very good point and you read my mind. I have been ferociously seeking out that information myself and I have found nothing that says anything about deleting trade lines all together just about removing default status. Is this concept from Opinion letters from judges or what? I have seen it on a web site but I don't see it in actualy quotes from the SLRA, HEA or anywhere else. HELP!!!! I've got a bunch of entries of 120+ days late that are killing me and I'm not seeing any real proof that I can get these deleted. I'm going to try my hardest but so far all I have gotten from the original creditor is that they removed default status. This blows we need real tangible proof! Time to call in the big guns on this one!
Everything I have read so far goes back to Marci and her conversations with DOE's Pat Moran. It appears that the "Sprit" of the Loan Rehab act and the HEA was for all tradelines to be deleted and apparently if you are relentless with the CRA's and get the DOE Ombudsman and contact the FTC etc.. you can get them deleted. I just wonder if there are some official Opinion Letters or something we can latch on to.
So far, I haven't seen anything that mandates it. I think I'm really gonna need something in black and white to get PHEAA to budge on this.
The time is 12-14 months because the loan isnt 'rehabbed' until it is actually sold by the guarantee agency to a bank. They have to find a buyer of the loan first.
...and that's fine. I can deal with that. But my concern still remains. There is nothing in the law that states all negative entries must be deleted when a loan is rehabbed.
I consolidated my loans as soon as I rehabbed and they were bought immediately. We need to keep this one alive until we get some answers. Unfortunately the original post where Marci discusses her conversations with the DOE is no longer available. Oh well I'm going to start the onslaught of validations and get the Ombudsman in on this.
I will also be consolidating. between this loan and a pirvate student loan, I'm shelling out $300 a month. I'd prefer not to.
Here's an excerpt from the DOE Student Loan Rehab web site Loan Rehabilitation You may also be interested in participating in the loan rehabilitation program. After you have made 12 consecutive monthly payments that are both reasonable and affordable, we will agree to reinsure the loan. You will then be eligible to have the loan purchased by a lending institution. Once a loan is rehabilitated, it will be taken out of default, the credit bureau reports made by the servicing agency will be deleted, you will be able to repay the loan over a 9 year period, and you will again be eligible for additional Title IV student financial aid funds http://www.ed.gov/offices/OSFAP/DCS/consolidation/rehab.html
Not all loans are through DOEd though. That's what the lady meant when I asked her what the policy was. She said if THEY were servicing the loan, that's what would happen but there are different interpretations of it.
See? I just talked to PHEAA again and they have reconfirmed that only the I9 will be deleted - nothing else. This is not good.
The battle is on. http://www.aessuccess.org/Manage/DefaultLoanRehab.shtml# This link clearly indicates negatives will be deleted. Does it not? If I am wrong, can someone correct me? I am now on the phone with PHEAA doing hand-to-hand combat.
Well, I got SOME satisfaction. They agreed to delete anything THEY placed on the report BUT items that their other department put on there before it defaulted and was transferred to them will remain. Basically, only the current holder of the loan is required to delete anything once it's rehabbed. Past servicers are not required to do anything with their tradelines. I'll consider this a loss. Almost seems like rehab is pointless if you were already able to dispute the I9's off (which I've done for the most part). ....bummer
