How does it apply to student loans and how is it done? Can negative student loan info be deleted afterwards? I have 4 Paid collections listed for my student loans. Direct Loans is servicing them now, and they are in a "deferred" status. Sorry for the multiple questions.
1. What is rehabilitation? It is a program allowable by the Higher Education act that allows people to pay a currently defaulted loan on time for 12 months to the lender servicing that loan in exchange for non-defaulted status and deletion of all negative info pertaining to the loan from the credit reports. 2.How does it apply to student loans and how is it done? Stafford and Perkins loans are eligible for rehabilitation now. There may be more types of eligible loans, but you'd need to call The Dept. of Education to find out. You should call 1-800-4FEDAID to fiind out which lender(s) is serving your loans, and whether they are in default. If the loans are in default, you need to call the servicer and ask them to send you a rehabilitation agreement form in the mail. Sign the form, make 12 ON TIME monthly payments (don't miss or you will disqualify yourself), and then ask the lender to "rehabilitate" your loan by selling it to a new lender and bringing it out of default. 3. Can negative student loan info be deleted afterwards? I have 4 Paid collections listed for my student loans. Direct Loans is servicing them now, and they are in a "deferred" status. Paid collection student loans are not eligible for rehabilitation, since the lender with whom they defaulted has been paid in full already (via a consolidation) and cannot rehabilitate the loan. The upside is that the loans are not in default, but the downside is that the negative listings remain on your credit reports for 7 years. Hope this helps, Marci
okay what if you had a perkin's loan that is in default but the lender sold it to a collection agency? How can that be rehabitlitated?
thanks Marci I wish I had this information a couple of years ago. Oh well, I hope and pray Junum can take care of these.
Re: thanks Marci Melissa, For a Perkins' loan, the government still owns it. The gov. has just sent it to a guarantor agency, who in turn hired a collection agency to collect on it. Call the guarantor and ask that a rehab agreement be sent. The guarantor may refer you back to the collection agency to get the rehab set up, but that's okay. By law, the collection agency has to accept rehab terms. If they don't, you may have to call the DOE Ombudsman's office to force them to do it. But a currently defaulted Stafford/Perkins is always eligible for rehab (unless it has been previously rehabilitated and is in default again). Marci
Re: thanks Marci Mother2, If it's been a while, I would think that the guarantor agency may have purged it's files or may not care to verify with a CRA. So its possible they may come off with Junum.
Re: thanks Marci no it wasn't rehabilitated officially but was in payment and I missed payments here and there of course. It was originally 2400 now it is 1100 left, this is the only loan that didn't have forbearance time or let me put it on disability when I was on bedrest for 9 months
Re: thanks Marci I have a long article on this issue of Rehabilitation and how it works http://www.carreonandassociates.com/htms/sl.htm andhttp://www.carreonandassociates.com/htms/stuloanrehabact.htm
