AES/PHEAA, US Dept of Education and a private college

[LordAthens1]

My fiance and I have been together for three years now and it's time to buy a house.  I knew my credit wasn't very good, but it turns out hers is much worse.  This is a problem since I only work 6 months out of the year, the other I am a stay at home Dad to our two little girls.  While I could get a FHA loan, my income doesn't support the cost of a home that we would be looking at.

I already have the basic building blocks to repair mine and some of hers.  A close friend of mine was is in the high 400's in October 2010, researched on here, followed advice and closed on his own home in December 2011.  He gave me a few hour long credit class the other evening, how to dispute the OC's, DV the CA's, Good will letters, etc etc.

The one thing that he was unfamiliar with was how to deal with school loans.  Further confusing is that she doesn't know which loan is what.  All she knows is that originally she had 4 Sallie Mae loans, a Stafford loan and a Perkins loan.

Right now she has 8 TL's regarding school loans (via Experian.  Still working on getting her TU and EF reports, couldn't do it online), which breaks out to;

(4) Sallie Mae TL's, all in good standing

AES/FRN SLT - It was paid good, then it was late, then she started paying good, then it bad, then it went for government claim.  As far as we can tell, the entire amount of this loan was removed from part of her tax refund this year. Original amount $2250

AMERICAN EDUCATION SERVICE/PHEAA - Not really sure what this is.  It says opened 10/2012, started reporting in 01/2013, has reported as collections for the past 4 months. $3075 due as of 04/2013.  It says the original creditor is PHEAA and also shows a recent payment of $150.  She says she is paying on a AES loan, coming directly out of her account twice a month, so this should be it, but they seem to be reporting otherwise?

U.S. DEPARTMENT OF EDUCATION - Reporting since 09/2012, has shown "collections" since it started reporting.  Creditors statement says it was permenantly assigned to government.  Original amount was $1709, showing $2009 past due as of 02/2013 (which was the last report)

WESTMINSTER COLLEGE- Opened 10/2005, reporting since 02/2009, last reported 06/2012.  It also says claim assigned to government.  It was only paid on time 3 times, then late 120 days, then collections.    Original amount was also $1709.

So right now, I don't know who took over who's loan and what loans are either paid off, being paid on, or not being paid at all.  She didn't do a very good job of keeping track of her bills during college, nor paying them after college.  In her defense, that is also because a lot of her mail was still going to her parents house after she moved in with me and they weren't telling her about it.

Does anyone have any tips on dealing with bad histories / negative reports on school loans?  I know the first step is working through to see who's loan needs paid, setup a payment schedule with them, etc, but past that should be just be doing Good will's?  Dispute payment history, then good will?

Any help is greatly appreciated!

[kjel]

Welcome to the forums! MyFico.com has a specific forum dedicated to Student Loans here --> http://ficoforums.myfico.com/t5/Student-Loans/bd-p/studentloans

First, start with the National Student Loan Data System (NSLDS) to locate the loans and find out what status they are in as well as who is servicing them. Your fiance will need to enter the PIN she used for filling out her FAFSA documentation online. If she doesn't remember the PIN or never had one she can obtain one here http://www.pin.ed.gov/PINWebApp/pinindex.jsp. On the NSLDS site you will want to select "Financial Aid Review" to get to the login screen to access the loan data. Once logged in a numbered list of loans will appear. You can click on the box with the number to find more detailed information on each loan. If her tax refund is being offset it is likely that she is in default status on some or all of her loans-this will show on the loan detail. 

Secondly, visit www.myeddebt.com which is the debt resolution website for federal loans. No Dept. of Ed PIN is required, only need to enter personal info to access the website. This will definitively tell you which collection agency and their contact information is handling the defaulted loans, there may be more than one since she has different lenders involved.

Essentially there are two options: loan consolidation or loan rehabilitation. For a good overview of each approach and how to determine if it is right for you see http://www.studentloanborrowerassistance.org/default-and-delinquency/repayment-get-out-of-default/

[LordAthens1]

kjel,

Thank you for the info.  I feel like a dolt for posting this in the wrong forum, I'll repost in the Student Loan forum so this thread can be locked.

The NSLDS sounds like our starting point to get this sorted. 

As far as we know at this point, aside from her Sallie Mae loans that we pay regularly on, there should only be one more outstanding loan (that she is positive that she is currently paying on, but I'm not so sure).  So I guess we would be looking at loan rehabilitation.  I think we're just more likely to use some of our tax refund to pay that one off to just simply make it go away.  She has a number of medical bills that she is delinquent on and I might be able to get a PFD or two for her for some past charge offs, so we'll likely take out a small installment loan to get those all paid off and removed from her history.

Thank you.

[bahbahd]

From what you have posted it does look like one or more student loan accounts have defaulted. While paying off the defaulted loan completely is a "quick" option, the account will remain with all of the negative payment history. Rehabilitation takes 9 consecutive monthly payments to the collector to bring your loans out of default and additional monthly payment until the loans are picked up by a new lender. When her loans are "picked up" she will have a new positive loan account on her CR. This is a very good thing. (You can make a few payments before you pay it off completely to have a good account payment history.)  The old loan accounts should be updated to remove the default status. Even better could happen. There are a few servicers which will even update the old loan accounts to remove all negative payment information. Rehab takes longer but it is much better in the long run.

[LordAthens1]

bahbad,

Yes, two of her loans have defaulted as far as I can tell at this point.  One was paid via tax seizure by the government, there is still one open, AES we believe, that she is paing $50 every two weeks since February of 2013.  Interestingly though, the TL for AES is still reporting Collections, even though she has been paying on it as agreed. 

I understand paying it will help rebuild, but I think we would rather just pay that one off and be done with it right now.

Are there any steps, either via dispute or good will, that we can take to plead with AES, AES/PHEAA, US Dept of Edu or Westminster College to remove some of the bad ratings?

[bahbahd]

While you might be making collection payments you may not be in an actually rehabilitation program for the loan. I'm not an expert in this area and those in the SL forum will have better answers. If you are in rehab, then there is a chance that the loan status won't change until you have completed rehab. 

The only thing you can do is GW AES or whoever is reporting the negative payment history. I would think that you will have much higher chance of GW acceptance after you jump through all of their hoops by completing rehab. Ask someone with experience with defaulted AES loans.