Direct Loan Rehabilitation Question

[Anonymous]

Hi - I did not make any payments on the Direct Student Loans and they went into collection a year ago. At that point, I was able to qualify for loan rehabilitation; which is 9 months of on time payments. Since February 2011 I have been making monthly, on time payments. The terms of my rehabilitation were fulfilled when I made my last payment in December 2011. Or so I thought. So I pulled up my Equifax and Transunion credit reports today, and it shows that the loan is still in collections and that I have never made a payment on it. Is there anyway I can get credit for my on time payments while my loans were in collections? Also, once I fulfilled the terms of Rehabilitation, Direct Loans should have changed the status of my loans from in collection, correct? Should I dispute this with the credit reporting agencies or Direct Loans? Thanks in advance to anyone who can help me with this. It's so frustrating, but my own fault.

[gijoe4500]

i'm in the same boat as you.  From my understanding, your tradelines won't get cleared up until direct loans picks your loan back up from the collections agency.  And at this time, direct loans isn't picking them back up, so I was instructed to continue making payments to the CA for the time being.

[ferriol]

Call them and ask to to rehab the loans and/or consolidate depending on the length of time the loans where in collection. You don't have to take all your answer from the collection agency, you can call 18006213115 and speak with them directly. After 9 on time payments they should start the rehab process when it is done all references to late pays and default should be removed.

[currentlywinning]

+1- I agree totally. I would call DL and ask them what the next steps from here would be. I will make my last payment next month towards my rehab and from my understanding, the loan will no longer reflect on my CR as defaulted.

[Anonymous]

I just called the DOE. I have made 10 payments on the rehab and am waiting for them to buy it back.  When i called the guy removed my federal tax offset, and told me about a program they just started its called the " Loan Borrower Realease Process"  he said if i tell the CA that i want to do this program than they have to lower the payment amount if i have to keep making more monthly payments until my loan is bought back.

[pointform]

I'm having the same problem with my Rehab but the CA told me that for 9 months I was $5.00 short(per month) and that my rehab would not qualify for the buy back from Direct. I thought this was kind of odd since for 9 months I was not alerted that I was short $5.00(per payment). The CA was debiting my account so I had records to show all was paid. I called Direct to clarify and have been paying straight to Direct since

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@Anonymous wrote:

I just called the DOE. I have made 10 payments on the rehab and am waiting for them to buy it back.  When i called the guy removed my federal tax offset, and told me about a program they just started its called the " Loan Borrower Realease Process"  he said if i tell the CA that i want to do this program than they have to lower the payment amount if i have to keep making more monthly payments until my loan is bought back.

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. Some CA's are really just crooks. Premier was the CA. This non rehab thing is not good. Direct could have alerted everyone that there was a buy back issue coming out of rehab. Is there anyone that has been bought back out here. Its a big hit on my score!

[Anonymous]

my loan was suppose to rehab in sept of 11 but since they did some kinda of system update none of the loans have been rehab im still waiting and i am currently making my payments.. am i the only one they are telling this to becuase i can not find anything on this topic

[FicoTron]

i finished my rehab in june 2011, it took until september for my tradelines to update correctly on Equifax, but TU and EX show only one tradeline with the status of transferred/sold. 

It just doesn't make sense because EQ updates correctly every month, showing all 6 of my seperate loans as "pays as agreed, never late", needless to say, my scores are about 100 points apart because of this on TU and EX.

I'm going to start a new thread about this, to see if and when other people who have rehabbed got their TU and EX reporting correctly...and YES, I have spoken with DOE/DL numerous times, and they say that they updated to all three bureaus, while the bureaus say they haven't gotten any updates.

[boonelb]

I am trying to get teh dafault status removed from my credit.  My loans were bought in june and still shows current status as 120 days late.  0 balance

AES is claiming they never received the rehab notification.  The brazos agency told me I needed to contact tg and get them to fax it to AES and it will get updated.  I am not even trying to get the lates removed just the status brought to current.

[Anonymous]

Thanks for the advice everyone! I called the Debt Collection office of the US Dept of Education at (800) 621-3115 (thanks poster for listing this number). I explained my situation detailed in the original post.

The representative explained to me that their system went through some changes and they are unable to process payments for certain months. He confirmed that I made payments for the months of October, November and December because the system shows no payments. I confirmed this. He then said if this is true then you have met the terms of your rehabilitation.

He went on to say that it is the Dept of Education's fault and not ours that our payments can't be processed. Therefore, since I verbally confirmed I made the payments, he said I was eligible for the Borrower Relief Process. Which essentially grants us all of the benefits of rehabilitation (default status removed from credit report, payment history updated), except for the loans will not be transferred to Direct Loans, the original loan holder.

He suggested that I go to my bank and find proof that I made the October, November and December payments. Send a copy of those checks along with a cover letter with your name, address and an explanation of the situation to The US Department of Education, Collections, PO Box 5609, Greenville Village, TX 75403-5609. This will make it easier for them to match payments with your account and get the loans transferred to Direct Loans faster.

He also noted it takes 30 days for credit bureaus to updated their records. So all in all I'm satisfied. One poster noted they will start a separate thread to monitor how long it takes for the credit reports to be updated after rehabilitation has been met, so I will probably post any updates there.