Help with DOFD

[Anonymous]

My ed.gov page says this:

But my Equifax report (from annualcreditreport.com) says this:

If my loan defaulted on 10/31/12, wouldn't that mean I missed 270 days worth of payments at that point?  Which would bring my DOFD to the first month after my grace period.  This very recent delinquency is killing my scores and I'm looking for any avenue to attack it.  

I've tried calling the original lender, the school. No luck.  I tried good will to everyone with a snail mail address, no luck there either.  

i also can't help but think this shouldn't be listed as a collections account still (?).  The loan should also not be in default as I read on the ED web site that one of your options to get out of default is to pay the loan in full.  Is that right?

Thanks.

[RobertEG]

I dont see any reporting of a charge-off.

DOFD only applies under OC account reporting if there is a reported charge-off.

[Anonymous]

Well I'll be darned.  You're right. 

I thought that accounts had to be charged off after 180 days? This account had never been brought current until the day I paid it off in full.  Had I known then what I know now I would have rehabbed it first.  Is there anything that can be done about the late payments, and in particular the ones in 2015/2016?   The Perkins office fully admits that I was put into "special handling" (no info on this anywhere that I can find) but they said it implies that I had a payment agreement with them starting in May 2014.

Thoughts?  Thanks again.

[RobertEG]

The only purpose/use of DOFD in credit reporting is for use by the CRA in determining the exclusion date of a reported charge-off or collection.

If your report does not include a reported charge-off or collection, then there is no DOFD and no issue of its exclusion.

The monthly delinquencies each have their own exclusion dates of 7 years from their respective dates of delinquency.

[Anonymous]

Dec 2013 shows C for Collections and it was coded as a collections account at that time.  It looks like it was all in-house because there was no corresponding new account anywhere else in the same amount.  Maybe that's what threw me.  

I wish the student loan boards were a bit more active.  I can't find anything about this "special handling" that the Perkins office keeps referring to in their emails.  I know I entered into some sort of agreement, and this will totally destroy any faith you might have left in me, I just don't remember what it was nor can I find my notes on the matter.  :/

[RobertEG]

I would suspect that the "special handling" they are referring to is that federal Perkins loans are specifically exempted from the normal exclusion of reported charge-offs and collections set forth under FCRA 605(a)(4).  See section 463(c) of the Higher Education Act.

Thus, while they still report the DOFD to the CRA, the CRA handles Perkins loans under those special provisions, and does not exclude a collection or charge-off on an unpaid loan at the normal period after the DOFD.

Your loan is paid, so the normal exclusion of any reference to a collection or charge-off would now apply.

However, that would only require the CRA to discontinue the showing of a collection referral under your payment history profile.

It would not require removal of the entire OC account.

If the "C" designators refer to referral for collection, you can dispute any continued inclusion of that information in your credit report after a period of 7 years plus 180 days from the reported DOFD.

[Anonymous]

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@RobertEG wrote:

I would suspect that the "special handling" they are referring to is that federal Perkins loans are specifically exempted from the normal exclusion of reported charge-offs and collections set forth under FCRA 605(a)(4).  See section 463(c) of the Higher Education Act.

463(c)(5) : "Each institution of higher education shall notify the appropriate credit bureau organizations whenever a borrower of a loan that is made and held by the institution and that is in default makes 6 consecutive monthly payments on such loan, for the purpose of encouraging such organizations to update the status of information maintained with respect to that borrower."  

I made those consecutive payments and so I'm not sure what it means when it says it will encourage them to update their info -- does that mean they can choose not to?  How would I go about determining if the CRAs were "encouraged" to update their info?

Thus, while they still report the DOFD to the CRA, the CRA handles Perkins loans under those special provisions, and does not exclude a collection or charge-off on an unpaid loan at the normal period after the DOFD.

Your loan is paid, so the normal exclusion of any reference to a collection or charge-off would now apply.

However, that would only require the CRA to discontinue the showing of a collection referral under your payment history profile.

It would not require removal of the entire OC account.

I keep getting the distinct impression that I shot myself in the foot when I just paid the darn thing off -- not sure if that is really the intent here or just the message  I should takeaway from this experience.  The Perkins office listed it as a collections account as of yesterday.  Just today I got a notification from Equifax that it has been changed from Collections to Paid in full, was 120+ days late -- not really much of an improvement but baby steps.  Now to go after the late payments.  

If the "C" designators refer to referral for collection, you can dispute any continued inclusion of that information in your credit report after a period of 7 years plus 180 days from the reported DOFD.

---

This DOFD appears nowhere that I can see in my file -- so is it just calculated then based on my last payment?

Thanks again for your help. I hope you are having a glass of champagne somewhere.

[RobertEG]

The CRA never uses other information derived from payment history to determine the DOFD.

The process and requirements for obtaining the DOFD are set forth in detail under FCRA 623(a)(5), which requires the furnisher (i.e.,creditor or debt colllector, as the case may be) to separately and expressly report the DOFD to the CRA no later than 90 days after reporting of their collection or charge-off.  Once reported, that date is stored in a special code called the "FCRA Compliance Date/ Date of First Delinquency."

For numerous reasons, the CRA cannot and does not infer or calculate the DOFD from other reported information.

If you dont see the reported DOFD in a commercial report, you can usually get it from annualcreditreport.com or by way of a report obtained directly from the CRA.  If that is still unsuccessful, you can order that information from the CRA under the information request process set forth under FCRA609(a).

Again, unless a charge-off or collection is reported, then there is no DOFD and no requirement to report it to any CRA.

[Anonymous]

It turns out that they did in fact report it as a charge off but only right before I paid it off in full.  I'll have to go back and look at the timeline to be sure.

Well, I sent out an email to the one person in the financial aid office that seemed willing and interested enough to help.  

Here's what I sent:

"Hi Ms. XYZ, 

 I hope you had a great holiday.

 After doing some research and going through my emails and logs, I found an agreement with the school to make six consecutive monthly payments and in exchange the loan would no longer report as derogatory.  This is the special handling that we discussed.  It is mandated by the Higher Education Act 1998 that says in Section 463 Paragraph 5: 

"`(5) Each institution of higher education shall notify the appropriate credit bureau organizations whenever a borrower of a loan that is made and held by the institution and that is in default makes 6 consecutive monthly payments on such loan, for the purpose of encouraging such organizations to update the status of information maintained with respect to that borrower.'."

 From June 2014 to Dec 2014 I made at six consecutive monthly payments per the agreement.  

Also, I had in place forbearances and deferments.  FRCA Section 623(a)(1) and (2) clearly outline the responsibility of an institution to not only report accurate information but when subsequent information such as deferments or forbearances are put into place (even after the original reporting has occured, see: https://www.ftc.gov/policy/advisory-opinions/advisory-opinion-boynton-02-15-00) there is a duty to go back and correct errors in light of new information.

 I would greatly appreciate the removal of these late payments from my credit report.

Thank you again for your time.

I got a less than welcoming or inspiring response: (my comments in red)

"1.  I am not finding a scanned copy of the payment agreement that you refer to in your last e-mail in our records. 

2.  In regards to forbearances and deferments, these are tools to bring your loan current without paying the entire past due balance.  Please provide our office with a copy of this document to review, should you have one. Your loan then would report as up to date going forward (provided no further payments are missed), but this does not erase/forgive the previous past due reporting.  Wouldn't this amount to agreeing with me about FRCA 623(a)(1) and (2)?  If they can go back and erase things moving forward from a certain point than certainly they can go backwards.

3.  The 6 consecutive monthly payments that you refer to are for the purpose of regaining eligibility for federal student aid.  A Borrower may regain eligibility this way only once.  Once the borrower has successfully made the 6th consecutive payment on the defaulted Perkins Loan, the National Student Loan Data System will be updated to reflect the loan being out of default.  This in no way would erase/forgive the previous past due reporting to the Credit Bureaus.  While yes, you cannot qualify for additional federal student aid while in default on a loan, this section a) is titled "AGREEMENTS WITH CREDIT BUREAUS" and specifically states that they would be required to provide accurate information.  And my loan was never updated in NSLDS anyway -- it shows as in default all the way since 2012.  

4.  Corrections to past credit bureau reporting would only happen in the event the University had made an error.  Not so much an error as much as corrective hindsight - retroactive forebearances happen quite a bit and in fact I was granted one by this university as it applied to my Stafford Loan for the same time period.

5.  The payment agreement that spanned 2014 & 2015 calendar years is another tool to use to keep the borrower making regular payments, even though it does not bring the loan current payments.  This allows the reporting to the credit bureaus to be reported as "Special Handling".  This, like the other tools mentioned above does not erase/forgive that past months of being past due.  What is this special handling exactly because I cannot for the life of me find it on any site anywhere?  Someone?

I hope this helps you understand what has transpired over the past month/years with your Federal Perkins Loan."

As always any insight or suggestions are appreciated.

[Anonymous]

Looking at your payment history July 2013 is your DOFD. So July 2020 is when it will fall off your report. And 3 months before that you can EE from Experian. 6 months before that EE from Transunion. Good luck getting Equifax to take it off early. But rumors are one month early is possible from them. It should be listed now as paid in full was a collection.