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Established Contributor
bahbahd
Posts: 729
Registered: ‎08-12-2011

Specific law forbidding removal of federal loans lates

[ Edited ]

My goodwill to Nelnet asking to remove lates on Stafford loans was denied. I sent a letter to an executive but received a call from a low level account manager who stated something along the lines of "I have reviewed your account all day, but there is nothing that we can do. Legally we must report..." The late payments are accurate, accrued after forbearance was up and another forbearance term was denied. I began making minimum payments, but was still accruing lates for many months until I was able to start making much larger payments to catch up.

 

I'm reading through the United States Code and the Federal Credit Reporting Act to find why student loan lates legally cannot be removed. Is it just the accuracy clause of  FCRA 602a  [15 U.S.C. § 1681]

 

http://www.ftc.gov/os/statutes/031224fcra.pdf

 

http://www.law.cornell.edu/uscode/text/20/1080a

Moderator
pizzadude
Posts: 8,662
Registered: ‎01-28-2010

Re: Specific law forbidding removal of federal loans lates

[ Edited ]

 

Yes, I believe that is what most creditors fall back on.   However the FCRA doesn't mandate that reporting is required....it only states that reported information must be accurate.

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Established Contributor
bahbahd
Posts: 729
Registered: ‎08-12-2011

Re: Specific law forbidding removal of federal loans lates

[ Edited ]

I'm wondering how then DoE / Direct Loan rehabilitation is actually skirting this then where they are actually removing past late remarks on their tradeline after rehabilitation is completed. Is this a case where the Feds are using a "Do as we say, not as we do" policy?

Moderator
pizzadude
Posts: 8,662
Registered: ‎01-28-2010

Re: Specific law forbidding removal of federal loans lates

[ Edited ]

bahbahd wrote:

I'm wondering how then DoE / Direct Loan rehabilitation is actually skirting this then where they are actually removing past late remarks on their tradeline after rehabilitation is completed. Is this a case where the Feds are using a "Do as we say, not as we do" policy?


That's a good question.   I suspect that you are probably right in your reasoning,,,,it's ok for them to remove late pays when they feel like it   :smileyindifferent:

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Super Contributor
webhopper
Posts: 7,230
Registered: ‎09-16-2011

Re: Specific law forbidding removal of federal loans lates

They started rehabbing these loans as an incentive to get more people to pay. Budget cuts within the.Dept of.education meant that the government didn't have enough capital to cover existing defaulted loans as well as issue loans for new students. Just think about the mess we would be in if no one ever paid. Our kids would pay the price by not even getting the opportunity to even go to college.

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Established Contributor
bahbahd
Posts: 729
Registered: ‎08-12-2011

Re: Specific law forbidding removal of federal loans lates

I fully understand why they are doing it. This just leaves me wishing I would have let my loans default two years ago and rehabbed them myself vs doing the right thing and paying them to begin with, struggling to pay them actually, when Nelnet would not grant forbearance any longer.

Super Contributor
webhopper
Posts: 7,230
Registered: ‎09-16-2011

Re: Specific law forbidding removal of federal loans lates

[ Edited ]

bahbahd wrote:

I fully understand why they are doing it. This just leaves me wishing I would have let my loans default two years ago and rehabbed them myself vs doing the right thing and paying them to begin with, struggling to pay them actually, when Nelnet would not grant forbearance any longer.


I totally agree...  sometimes its tough to sit back and realize that you are punished for actually doing well and doing the right thing in life...

 

For example:  People who purposely work part - time and cut back on the amount of hours they work to receive public assistance

People who don't marry their partner, so that they can receive public assistance

Having to pay taxes, rather than receiving a 6k refund every year because you actually finished college and got a good job

Having to take out unsubsidized student loans even though the government assumes that your family will actually help you pay for school... When in reality, they will not and do not.
Being able to draw 50% of your spouses Social Security amount despite not working a day in your life

 

There are numerous examples of how our system is not fair for those of us who work hard to succeed....  However, I'm glad we don't live in a country that lets our poor children and single mothers starve to death, allow our elderly to become sick and homeless, or limits educational opportunities to only the rich. As much as I complain about the system, I'm glad we aren't like other countries. You really aren't going to get any pat on the back for doing the right thing and paying back your loans, the only pat on the back  you'll get will come later in life when your kids need student loans, and they are able to get them because of all of the people who did the right thing.

 

Obviously this is just my opinion, please take with a grain of salt if you disagree...  I can see both sides of this story because I've been on both sides of this story.

 

 


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BJ06
Posts: 2
Registered: ‎07-19-2012

Re: Specific law forbidding removal of federal loans lates

Texas Guaranteed also removes past late remarks after 9 months successful rehab. So i dont think its an issue of " I can't". More likely "I won't"
Established Contributor
bahbahd
Posts: 729
Registered: ‎08-12-2011

Re: Specific law forbidding removal of federal loans lates

[ Edited ]

This is interesting news. I think Texas Guaranteed is the guarantor of my undergraduate loans while Nelnet is just services them. I never thought about contacting the guarantor. What role does TG provide for you?

 

Edit: I saw that you said rehab. Yes, I believe it is standard practice for lates to be removed once rehab is completed. Either back to date of default or entirely off of the tradeline.  My question was more around removal of lates for someone who does not rehab.

Regular Contributor
theREBIRTHofCREDIT
Posts: 131
Registered: ‎11-05-2007

Re: Specific law forbidding removal of federal loans lates

bahbahd wrote: My question was more around removal of lates for someone who does not rehab.

I WOULD LIKE TO HEAR MORE ON THIS SAME QUESTION...
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