Sallie Mae student loan tradeline "debt being paid through insurance" after rehabilitation

[Anonymous]

I had a student loan through Sallie Mae, which I recently rehabilitated in July 2011.

However, I still see the tradeline from the time that I was past due to Sallie Mae, with the "description debt being paid through insurance". I understand that this is because the guarantor is now paying/paid Sallie Mae and I am only paying off the guarantor with my new rehabbed loan. There is nothing stating when this tradeline will be removed.

I'm wondering how long will it stay on my credit report? Will it stay until I pay off my loans or until the guarantor pays off the loans (although I thought that Sallie Mae got paid in full from the guarantors long ago)? Does the same seven year rule apply to this, i.e., it can only show up only about seven years after my first missed payment to Sallie Mae?

[gamegrrl]

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@Anonymous wrote:

I had a student loan through Sallie Mae, which I recently rehabilitated in July 2011.

However, I still see the tradeline from the time that I was past due to Sallie Mae, with the "description debt being paid through insurance". <snip>

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In my experience, if you have rehabilitated the loan, all mention of the default (which includes payment through insurance) should be removed from the original account. This is the information that came to me directly from the office of the ombudsman for the Department of Education.

Now, just because it's SUPPOSED to be removed doesn't mean it will just automatically happen. I have had to fight for this every step of the way, and still have one loan reporting incorrectly.

Unless you are one of the lucky ones here whose formerly defaulted TLs magically disappear, you can expect the late payments to fall off as they would for any other TL. In the meantime, getting ANY MENTION of default, insurance, etc. removed from your CRs is a good place to start.

Frankly, the way the rehabilitation process is managed is ludicrous and and riddled with inconsistencies. Here's just ONE example, taken from the Dept of Education website at this URL (http://ed.gov/offices/OSFAP/DCS/repaying.html) which states:

"If you want the negative credit report made by the Department removed, you must successfully complete our loan rehabilitation program."

That certainly makes it sound pretty clear that Rehabilitation = Negative credit report removed.

Wish it was that simple. Good luck to you.

[currentlywinning]

Any updates?