I had 6 loans from Nelnet that went into default in January 2007, ranging from $1,200 as the smallest and $3,500 as the largest. Starting in December 2007, I began making payments to GC Services as part of a 10 month Rehabilitation Loan. I was told that once this was completed, my original loans would be "rehabilitated" and show "current" as the status. I paid $500 as adown payment at the beginning of the loan and made 10 payments of $240 monthly, on time every month. That's a total of $2,900.
Then, my loans were "returned" to Sallie Mae, who I guess bought the defaulted loans from Nelnet and then contracted GC Services to do the Rehabilitation Loan. Anyway, I now make payments of $303 every month to Sallie Mae so that my loans will be paid off in 5 years instead of 10, saving me about $1,800 in interest. My first payment was 12/28/08, and I have since made a second payment on 1/28/09.
In mid January, I received a notice from the DOE that my loans were going to be taken over by the Federal Government and consolidated. Even though the consolidated loan had a fixed APR, the program would not allow me to plan to pay everything off in 5 years like Sallie Mae had (I would just have to send in extra money each month), so I decided to opt out of the consolidation and stick with Sallie Mae, which has an APR of 4.21% right now.
In December 2008, my credit report updated and all my Nelnet loans switched to "current" and my Sallie Mae loans appeared (only 5 loans though instead of 6 like Nelnet had, I assumed this was because my Rehab loan had paid off one of the Nelnet loans...more on this in a minute), and my score shot up about 60 points on TU and EQ, while EX did not update Nelnet, but did add Sallie Mae loans (see scores below in sig). I called Sallie Mae about this in late January, and they said EX is notorious for taking their sweet time with stuff like this, and to wait until after Feb 1st before disputing. I disputed Feb 5th, specifically stating that I was only disputing the STATUS of the loan, that it need to be switched to "current" instead of "120 days late." It only took two days to get a response. EX claimed the loans were not only late, but they switched the satus to "Claim filed with government/Collection account" on all 6 loans!
Here is what it says:
Account History:
Claim filed with the government as of Feb 2009
Collection as of Nov 2007
180 days as of Sep 2007, Jun 2007
90 days as of Mar 2007
I have paid these **bleep**ers over $3,500 in about a year, and this is what happens???
I have truecredit.com, which I update every day. Keep in mind that up to this point, only EX showed the accounts as derogatory, both EQ and TU showed "current." Today, my TU report updayed, and I have 5 NEW DEROGATORY ACCOUNTS AND 1 NEW DELINQUENT ACCOUNT!!! All six are my original NelNet loans.
Here is how the forst 5 loans "changed":
Condition 2/10/09 "Closed" to 2/11/09 "Derogatory"
Type 2/10/09 "Note Loan" to 2/11/09 "Educational"
Status 2/10/09 "Current" to 2/11/09 "Late 120 Days"
Remarks 2/10/09 "Government Secured Guarantee" to 2/11/09 "Student Loan permanently assigned to government"
The sixth loan has all the same changes, except under remarks it says:
Remarks 2/10/09 "Government Secured Guarantee" to 2/11/09 "Payroll Deduction"
This is the one that does not have a matching Sallie Mae loan, the one I assumed was paid off during the Rehab loan.
I found all this out at 9pm tonight EST, so I just missed being able to call Nelnet or Sallie Mae to figure this out. I will call FIRST thing in the morning and update after work tomorrow night, but I figured I'd post here to see if anyway has any advice or has been through something like this before?
Thanks,
Matt (frustrated FSU graduate)
Starting Score: 540 EQ 517 TU on 11/17/08Thanks for the response, I'm still a little confused though. I keep hearing from everyone that a rehab loan will help the status of my original loans. How does "late 120 days", "5 loans derogatory, 1 loan delinquent" help anything?
I spoke to Nelnet this morning, and they agree that this is not being reported correctly. According to them, my loans should not show a current status of "late 120 days."
In Dec 2008, the Nelnet loans updated after the completion of my Rehab loan to show "closed" and "current" on each account. According to the rep I spoke to this morning, Nelnet has no plans to "assign loans(s) to the government" or do a "payroll deduction." The "payroll deduction" loan really confuses me. Why would the status of ONE of the SIX loans switch to that status 4 months after I complete a Rehab loan?
@LynnInMN wrote:Under the terms of the rehab agreement, your GUARANTOR'S negative information is removed from the CRA's, not Nelnet.
Nothing has changed on my credit report as far as I can tell as a result of anything like that. If there was a guarantor (whoever that was), they never reported anything on my CRA's, so there was no "negative information" to remove. The only items that have been on my credit report pertaining to these loans were my 6 original NelNet loans and my 5 new Sallie Mae loans.
DISREGARD MY LAST 2 POSTS!!!
You were right about everything. I mistakenly assumed that all 6 of my Nelnet loans had een taken over by Sallie Mae. Turns out, only 5 were. The 6th loan was never picked up by anyone, so the Guarantor (the Office of Student Financial Aid) has listed a collection on my CR for $2,005. I did not think this was related to my Nelnet student loans, I thought it was a seperate loan entirely. However, the other 5 collections from OSFA must have been on my report, but were deleted prior to DEC 2nd after my Rehab loan was completed, which is when I became a TrueCredit subscriber. I settled this collection just now for $1,450, and it should be gone in a month or so.
However, OSFA agrees that the Nelnet loans should not show "late 120 days" status, and they should no longer say "derogatory." The 3 "90 days late" should remain on my CR, but everything else should be kosher.
Thanks again for your help. I really appreciate your time and input Lynn.
According to my CR, I am still "upside down" on all 5 Sallie Mae loans by a couple hundred dollars. Once I get these under 100%, will that help my score, or is making payments on time all I can do?
I guess what I'm asking is - do my student loan balances factor into my "utilization (30% of my score)" when calculating my FICO score, or just my revolving accounts?
I have my CC down to 30% util, but my student loans are at about 116%.
When I add it all up, my combined CC and SL util together is about 110%.
cool. so even though my revolving debt/CL is such a small $ amount compared to my student loan debt/Limit, it's still 30% of my FICO score? I suppose this makes sense so that doctors just out of Med school with 200k in SL debt aren't punished with FICO's in the 400 range. 