student loan

Discussion in 'Credit Talk' started by james, Oct 31, 2000.

  1. james

    james Guest

    I settled with a credit agency for the dept of education on my ndsl for almost the amount I owed,but now my credit report is bad. What can I say to get this paid collection statement of my report?
  2. roni

    roni Well-Known Member

    Nothing. It stays for 7 years after the date you defaulted. You can dispute the collection with the credit bureau(s) and hope that the collection agency does not respond to the investigation. If that happens, by law the credit bureau must delete the item from your credit file. What do you say in the letter to the credit bureau? Simple say, "the account is not yours". Dont say too much. Wait 30 days for the credit bureau to investigate and give you a response. If this does not work the first go around, do it again in about 4-6 months. This time dispute the item as having an incorrect default date. Wait again and see what happens. Get the idea? In other words, beat the system and don't let the system beat you. Your only other option is to wait out the 7 years. But you can try these methods while you wait. Good luck.
  3. james

    james Guest

    The student loan was taken out in 1982,and I didn't hear from anybody until the collection agency for dept. of education called up. Is there a sol for them reporting the default not until last year? Thanks.
  4. Doris K.

    Doris K. Well-Known Member

    Actually, getting a defaulted student loan off your credit reports is not impossible IF you've rehabilitated the loan, or you've paid off the loan.

    After you've made a certain number of timely payments (usually six months) on a rehabilitated student loan, the loan goes out of default, so it is no longer a collection-type account, and as long as you make the agreed-upon monthly payments, the account is then in good standing and should actually become a positive credit line on your credit reports.

    If you've rehabilitated a once-defaulted student loan, and your credit report information has not been changed to a positive status after the loan has gone out of default status, you should dispute the information with the CRAs. You shouldn't have any problem either having the information updated to a positive status or removed entirely from your credit reports. The same applies after you've paid off the loan.

    My daughter's best friend defaulted on both a state guaranteed student loan and an NDSL/Perkins loan years ago. She repaid the state guaranteed loan involuntarily through wage garnishment, and she rehabilitated the NDSL/Perkins loan and paid it off. The state loan, which made for a nasty blight on two of her credit reports was changed to a positive status on her Experian report and an I-1 on her Equifax report. No late payments were reported.

    The university she attended reported the NDSL/Perkins loan on all three of her credit reports. Once the default status was removed after six months of on-time payments, the university student loan office removed the derogatory information from her credit reports automatically.

    Even if the student loan office hadn't removed the negative information, this probably would have made for an easy dispute. The negative information was reported in the name of the university; however, once the default status was removed, the loan was assigned to a different agency. Therefore, because the loan was now out of the university's hands, at the very least, it probably wouldn't have been verified.

    When it comes to defaulted student loans, the condition of your credit reports is the least of your worries. All the hell you'll have to go through during the collections process will drive you crazy enough. As long as you're taking care of your part of the bargain, the credit reports are repairable.
  5. Doris K.

    Doris K. Well-Known Member

    There is NO statute of limitations when it comes to student loans. This is the case when it comes to credit reporting and collections.

    It ain't going away, and they WILL collect. While they can't take blood from a turnip, they'll somehow manage to take the turnip!

    Arrange the rehabilitation of this loan at ONCE! If a collection agency has it, it can still be rehabilitated. Once the agency turns it over to the Department of Education, you can't rehabilitate it, and you WILL repay the loan through involuntary measures.

    Go to the Department of Education's website at and read up on what you can still do to straighten out this mess BEFORE it gets UGLY. You might just find that you still have a chance to handle this debt much less painfully than you might imagine. However, you'll have to contact immediately them to do this. Time is NOT on your side right now.
  6. Doris K.

    Doris K. Well-Known Member

    Yo! Roni, read this, sweetie!

    I just read one of your earlier posts after I wrote this one. See if any of this information applies to you.

    While either you've not specified how much you owe in student loans, or I failed to catch it in another post, you MIGHT consider using some of your new credit lines to help rehabilitate your student loans and get them out of default. THEN, you can go for that mortgage for your new dream home!

    While the credit card interest rates will be pretty rough for such a purpose, it just might be worth it to pave the way for your mortgage, and most of all to get your ass out of a crack with the Department of Education and their nasty collection procedures.

    Think about this one carefully....

    If you haven't already, read up on the rehabilitation process of the Department of Education's website. It should tell you everything you need to know, and you can download and print most all the forms you need.

    Girl! Get this monkey off your back and start picking out your curtains and wallpaper! Hell, you need that mortgage!
  7. roni

    roni Well-Known Member

    That is true for perkins loans Doris. I was able to get deferment of those not problem. However, for GSL or FFEL loans it is much harder and most of us are left with the 7 years reporting unless we rehabiliate or dispute the neg and get lucky after its paid. I did not rehabilitate the loans because I needed the defualt removed immediately from my record as I was being commissioned into the army reserves medical corp. This was a stipulation.
  8. roni

    roni Well-Known Member

    RE: Yo! Roni, read this, sweet

    Sorry Doris.
    I think I clearly stated in all of my postings that I consolidated my loans. Therefore I am not eligible for rehabilitation. My lender, the same assholes who defaulted me by error, told me that they would not cooperate with rehab. programs. Actually the secretary at the office gave me a little warning because she felt sorry for how they were treating me already. She said that once the borrowers had completed the rehab. program they usually did not remove the debt from their credit file. She told me after all those payments I would still be in for a fight. No one ever told me about the rehab program until several months and when I was just 1 month away from consolidating. But the bottom line is this Doris: Since I consolidated which put my loans OUT of Default and Zero balances, I can not then turn around and rehabilitate. BUT, that is the deal that the Dept of Ed ombudsman's office was trying to work with this damn lender in NC who defaulted ALL of my undergraduate college loans. Since I have been paying these loans for over a year now, they are asking them to consider this rehab and remove the loans , especially since there is so much proof showing that I did apply for deferment probably adn they goofed up. But we all know that sometimes life just isnot fair, and this may not work out in my favor. I just wanted to set it straight that I am not in collections now. I make my payments every month to the Dept of Ed. I no longer have defaults on my record and I am eligible for more student loans. NOt like I am going back to school anytime soon though. Ok that's it. and Thanks for your concern.

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