Negotiating to Get Rid of Late Payments on Student Loans?

[Anonymous]

Hi everyone, 

I need some advice. Long story short, my FICO scores are bad (see sig) because my parents took out two student loans in my name and without my knowledge about four years ago and then made several severely late payments (120 plus days) on them about two years ago. In total, they had 12 late payments, 6 on each one. Unfortunately I only found out about the loans and late payments when it was far too late, and I've been trying to rebuild my credit on my own terms without getting my parents into legal trouble, and I didn't know of a way to do that other than to build a strong credit history for myself.  My original plan was just to let the late payments fall of my credit report by themselves in 7 years time and keep an eye on my parents and make sure they keep track of the payments in the meantime. I have also acquired some credit cards and have been managing them extremely well to help boost my score during the rebuilding journey.

Nevertheless, I have heard of instances of lenders being lenient in removing negatives from your credit report for loans if you pay the loans off in full. The combined balances left on the student loans is about $8000, and I have more than enough to pay that in full and just have my parents pay me off over time. I would much prefer to get the baddies off my report early than wait another 5 years for them to fall off by themselves. Do you think I would be able to negotiate with MOHELA (the lender my parents used) to have the baddies removed if I paid the remaining balance in full? Do things like this happen with student loans? Is there a chance?

[scorewatcher7]

Student loans are unique in the fact that you can repair them directly and have them all go back to positive standing. The reason for this is because the government doesn't want student loan default as a basis of anyones credit file if they can help it. I mean, the whole point of school is to benefit you and society- its not standard credit. 

That being said, you need to speak with your student loan company and ask for the payment plan that brings it back to positive. I know that in New York there's a state-run agency that handles it. After 9 months of straight payments, your loans all go back to positive. Check into your state and with your company to see if they offer the same. Its a much better option than paying off the loans in bulk. You just need to suck it up on your report until they clear up. Hope this helped. 

[Anonymous]

Unfortunately I don't think there's anything like that per se, because my parents have made on time payments now for over a year and their previous late payments are still very much on my report...but then again, you're saying that there's a separate agency that handles removing delinquencies from student loans for a year of on time payments, right? I guess I should call and ask about that.

 Also, I'm not really interested in a payment plan unless they insist on it and it's a relatively short one. I have way more than enough money to pay off the $8000 balance, and I would much rather pay off the balance in full if it gets it off my report immediately rather than come up with something like a 3-5 year payment plan (at that point, I might as well let them keep paying it like they've been doing, since I assume the delinquencies would still be on my report until the payment plan terminates.)

[scorewatcher7]

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@Anonymous wrote:

Unfortunately I don't think there's anything like that per se, because my parents have made on time payments now for over a year and their previous late payments are still very much on my report...but then again, you're saying that there's a separate agency that handles removing delinquencies from student loans for a year of on time payments, right? I guess I should call and ask about that.

 Also, I'm not really interested in a payment plan unless they insist on it and it's a relatively short one. I have way more than enough money to pay off the $8000 balance, and I would much rather pay off the balance in full if it gets it off my report immediately rather than come up with something like a 3-5 year payment plan (at that point, I might as well let them keep paying it like they've been doing.)

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I don't think they're linked directly. From my understanding, you can make a payment to your student loans as you have been but they don't automatically go back into good standing. There's an agency in NYS that handles defaulted school loans and works out the arrangement. I can't speak for your personal situation though. 

[Anonymous]

Hmm. I guess I'll have to find out. I live in Alabama, and I don't know if that's a good or a bad thing for this kind of issue.

Does anyone else have any experience with late student loan payments and getting them removed from a credit report early?

[takeshi74]

You might want to look in the Rebuilding subforum as it is intended for topics like this.

[Broke_Triathlete]

OP if you come across something please let me know. I have two late payments that were supposed to be auto debited. And I found out when it was too late. Thanks. 

[Anonymous]

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@Broke_Triathlete wrote:

OP if you come across something please let me know. I have two late payments that were supposed to be auto debited. And I found out when it was too late. Thanks. 

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Definitely will. I'm hoping to get a few more replies from this wise community with their success at getting student loan late payments removed from one's credit report.

I did call MOHELA today and both the CSR and the supervisor were friendly but unhelpful in terms of trying to work something out (to be fair, it was probably a request that was out of their hands). On MOHELA's website, there is a part where you can give a review of MOHELA from 1-5 and also leave a comment. I blew them up on the survey, giving them a one and a long explanation about my experience with these fraudulent student loans and how MOHELA has just been shrugging its shoulders at me when I have been coming up with compromises try to fix the situation, even after I offered to pay the full amount of the balance of the loan off and recoup the money from my parents.

[Broke_Triathlete]

Awesome. I wish you all the luck. I dispatched a goodwill letter via email to consumer advocates at Navient. I hope it goes well. 

[Anonymous]

Hi JayLau. Just wondering if you've had any success negotiating with the student loan lender.  I am in the same boat.  I had a baby, missed a couple of payments and it's killed my credit.  I have the ability to pay the late payments and bring the account into good standing but tried to negotiate a removal of the late payments to do so. Instead they are offering me forberance or payment plans which I dont need beacuse I'm able to bring ot current. They have told me they are unable to remove lates, however I know that after receieving goodwilll letter requests they sometimes do. I'm just trying to recieve the goodwill gesture in exchange for bringing the account currrent now instead of over time.  So far they have been unwilling to negotiate. Have you had any better result?