Dept of Ed Said I Rehabbed Before But Ummmm, I DON'T REMEMBER DOING THAT!

[Anonymous]

Hi, new here!

Been trolling the school loan boards like crazy and learned about the rehab option.  My credit report is a damn mess and admittedly I've neglected it for years just because i felt like it was a monster that could not be tamed.

Anyhoo, I'm currently, unexpectedly, in need of a new vehicle (don't worry, I'll get to how my school loans fit in).  I contact my CU and they won't touch me.  So i decide to pull my credit report and see all kind of foolery on there involving my school loans.

My Dept of Ed loans are showing "Closed, Transferred" on my Experian report.  So I called Dept of Ed and they said that the loans are in default but were never transferred.  So why is that showing on my credit report that way?

Anyway, I inquire about the rehab option and they say I've already rehabbed them once and am not eligible again.  But um, I do not remember entering into a rehab agreement!!!  So I ask if they have anything in writing, they said no.  So then I ask the obvious, well how did I enter into the agreement???  They said I started paying on my loans again, which is true....but I did not knowingly understand that just by me paying on my loans again that I was entering into a rehab agreement!

This is wild!

So I started paying on my loans, probably bc at the time (October 2012, according to them) I may have been making more money.  I never discussed the reason I began paying on my loans again.  I had them already set up in billpay through my bank so I just started doing autopayments to them....and then I stopped about 7 months, probably bc I wasn't making a lot of money....and Dept of Ed decides, unilaterally, that I am using my one shot at REHABILITATION?

They have nothing in writing from me and I have nothing in writing from them...rehab occurred because they say so??

On the other hand, I also contact USA Funds who now have my Sallie Mae loans...I enter into a rehab with them today and um, the process is surely unforgettable.  They asked me about my expenses, made me listen to some recording where I had to press the # sign at the end, evidencing my agreement to the rehab terms and conditions, I mean, it was a lengthy to do.  I was on the phone with them for an hour and a half getting it set up.  Plus, I will get an agreement in the mail which will have to be signed and sent back.

But Dept of Ed is just like, yeah, you did it...a while ago, cuz we say so....we have nothing in writing evidencing that you did it, but we say so, therefore, it is.  They have no recording of a phone call from in October 2012; therefore, there's no proff that a discussion was had with me about the rehab option.

HUH?

Has anyone ever heard of this?  If so, do I have any options to contest?

[Anonymous]

Did they turn your defaulted loan over to USA Funds? When I was rehabbing my loans said closed, but the difference is the default status. If I'm not mistaken it may have said assigned to gov't or collection agancy or something like that. That status will be removed once you complete rehab. My loans were deleted when I finished rehab so I don't have anything to go back and look at. Also I didn't know you could set up a rehab agreement directly with DoE I thought it had to be through the agency handling your collection. It's possible you received the wrong info from the person you spoke with.

[Anonymous]

I was on the phone with them for a pretty long time. 

Did they turn your defaulted loan over to USA Funds? The DOE said they never transferred my loans out and that they do offer rehab option but not to me bc I've already taken advantage of it.

I was completely frustrated on the phone so I do plan to call back.  i was talking to someone who kept repeating the same thing as if the more she said, I will eventually accept it as true.  Frustrating circular talk.  I finally got off the phone bc I didn't have the mental wherewithall to deal anymore.

I'll call them back tomorrow.

[SCF]

Did you call the CA prior to resuming payments again and agree to some time of payment plan?  At this point, it's almost two years ago, and its possible that you dealt with someone who didn't clearly explain that your "payment plan" was a rehabilitation.  In the past, it was not unusual for rehab to be started without a signed agreement.  There have been several positive changes in the recent past, including requiring the signed paperwork that really help to clarify this type of situation.

If you can't get more information from a different rep, you could try contacting the Student Loan Ombudsman.  Their role is to help you interface with your servicer, and it seems like they would be a helpful advocate in a situation like this.