Needing Advice for Husband (default student loans)...

[Anonymous]

Husband and I are looking to purchase a home in the next 1-2 years.

Our biggest concern: his student loans. From what he reports they are in default.

I'm afraid that I have very little experience with what happens to student loans after you fail to pay (not sure if they work in the same way as CCs, where you're charged off after so many days late).

He gets letters in the mail from Navient (private lender I'm assuming?) asking for payment but if I recall correctly he states they might have recently been purchased or taken over by Navient? As in it wasn't Navient to begin with? Also, he states he's paying on a *couple* of them (assuming some of the ones listed under Navient), but definitely not all of them.

On his credit report he's showing the following verbage:

ACCOUNT NAME:

DPT ED/SLM

ADDRESS:

1100 USA PKWY FISHERS, IN 46037

ACCOUNT OPENED:

Ranges from 2011-2012

ACCOUNT STATUS:

CLOSED

PAYMENT STATUS:

Ranges from "Paid satisfactorally" to "Pays as agreed"

************

ACCOUNT NAME:

NAVIENT

ADDRESS:

(1) 123 S JUSTISON ST STE 30 WILMINGTON, DE 19801

(2) 11100 USA PKWY FISHERS, IN 46037

(3) PO BOX 9500 WILKES BARRE, PA 1877

ACCOUNT OPENED:

Ranges from 2006-2008

PAST DUE:

Ranges from $0-$9k

ACCOUNT STATUS:

Ranges from "OPEN" to "CLOSED"

PAYMENT STATUS:

Ranges from "CHARGE-OFF" to " Account transferred to another office"

TERMS:

Ranges from 120 MO-300 MO

How should we start tackling this? In order to get back on track, how do we even know who to contact? And is it common for Navient or other private lenders to offer payback options based on income?

Any and all help would be greatly appreciated.

[dragontears]

Navient services federal loans as well as private. If they are federal try to rehab them as that will remove the default status

[Anonymous]

Would we be able to find out if their federal or private loans if he signs in online through the Navient website?

[Anonymous]

I would suggest checking MyEdDebt.gov for defaulted federal student loans or call their customer service at 800-621-3115.

The best way to start tackling this could be to look into rehabilitating the loans to get them out of default. Once they are no longer in default, it is said that negative reporting resulting from the default will be removed from the credit report. It takes 9 to 10 on time payments of an agreed amount, that is determined based on income and expenses, to rehabilitate the loans.

I have recently made all of my payments and my loans should be rehabilitated in the next 10 days.

Hope this helps...

[Anonymous]

Thank you very much for that advice! We logged on and indeed, he has some loans that have been transferred elsewhere. We will be contacting them soon. 

[LindysMom]

The only other piece I would add is that for FEDERALLY defaulted student loans (not private) the Federal Loan Rehabiliation Program is a one time offering from the feds-after 9-10 on time payments the loans get out of default and you are able to continue debt service payments on them. 

you absolutely will need to get them current, especially if you are doing FHA (basically, why would the government loan their money again to a borrower in default). 

don't expect that all prior late reporting will also be removed. rather, hope that as part of the rehab, when the gov sells the account to a new servicer, they add new trade lines for an account and list the old account as closed in good standing. some of the posts im reading have folks upset/disappointed when their lates arent removed. 

finally, be diligent with your paperwork & keeping everything. i know this is common sense, however, these places are still a call center, handling 1000s of cases, but mistakes happen.  when i first enrolled they gave me a monthly payment estimate, i signed all paperwork based on that ammount and when the financials were finalized it ended up being less of a monthly payment but the call center never updated my paperwork.  as part of me being proactive in getting the DOE to turn over my account to a new servicer, i learned the call center never did that, and things were on hold.  i was not happy

i think youmare doing the right thing with the loans & your home buying timeline.  i am looking to buy in January and this loan thing is taking a lot of time.