Student Loans- HEA of '65/'98

Discussion in 'Credit Talk' started by roni, Aug 13, 2001.

  1. roni

    roni Well-Known Member

    I thought some people might could use the exact wording of the clause that REQUIRES deleting of negative information from credit reports for student loans that have been "rehabbed"..........

    Section 674.39 in 1965

    Section 465.h.1 in the admendment of 1998



    `(A) IN GENERAL- If the borrower of a loan made under this part who has defaulted on the loan makes 12 ontime, consecutive, monthly payments of amounts owed on the loan, as determined by the institution, or by the Secretary in the case of a loan held by the Secretary, the loan shall be considered rehabilitated, and the institution that made that loan (or the Secretary, in the case of a loan held by the Secretary) shall request that any credit bureau organization or credit reporting agency to which the default was reported remove the default from the borrower's credit history.

    `(B) COMPARABLE CONDITIONS- As long as the borrower continues to make scheduled repayments on a loan rehabilitated under this paragraph, the rehabilitated loan shall be subject to the same terms and conditions, and qualify for the same benefits and privileges, as other loans made under this part.

    `(C) ADDITIONAL ASSISTANCE- The borrower of a rehabilitated loan shall not be precluded by section 484 from receiving additional grant, loan, or work assistance under this title (for which the borrower is otherwise eligible) on the basis of defaulting on the loan prior to such rehabilitation.

    `(D) LIMITATIONS- A borrower only once may obtain the benefit of this paragraph with respect to rehabilitating a loan under this part.
  2. TCEast

    TCEast Well-Known Member

    Good info to know. I have a student loan currently in deferment and though never in default I do have one 30 day late from about a year ago. To make it worse my student loan has been split up in to five tradelines on my CR so it looks like I have five 30 day late notices. I would like to know if I can request that all my tradelines be condensed to one. And since I have never been in default, am I still eligible for a rehab program. I am planning on calling in a few days but would like a little info first so I know what I have a right to ask for. Thanks in advance.
  3. roni

    roni Well-Known Member

    When you get out of deferment period you can consolidate the loans. Student loans show up as a different trade line for every year despite you only make a single payment each month.

    As far as I know, you will have to challenge that each payment was 30 days late. In your case for 5 loans over 3 CRA that is 15 times.... Sorry!
  4. TCEast

    TCEast Well-Known Member

    Thanks Bkev. I guess I will start the verifying process and hope for the best. I know my student loan has been sold at least once so maybe that 30 day late is from a bank that no longer owns it. The reason I wanted to know about rehab is so that I would at least know that after a year the 30 day late would be deleted anyway.

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