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Regular Contributor
scvbd99
Posts: 200
Registered: ‎02-22-2013
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Student Loan Default...Specific Questions

[ Edited ]

I currently have 18 different student loans in default.  17 are with ECMC, and 1 is with Sallie Mae.  They are all Stafford loans.  

 

The good news is that I am in the process of rehabilitating every one of them.  The 2nd of 9 payments just posted for all of them yesterday, in fact.  

 

I have a few questions that I was hoping some of you could help me with.  I know it's a lot to ask, but I'd really appreciate it.  

 

  1. Does anybody have experience with ECMC or Sallie Mae regarding how quickly they find new lenders to take over the rehabiliated loans after the 9 rehabilitation payments?  Any insight would be much appreciated.
  2. After the new lenders have taken over the loans, I'm planning on immediately consolidating them under a Direct Consolidation loan, and then going on the IBR plan.  As a public educator, after 120 consectuve on-time payments, I'll be able to cancel the remainging balance.  Has anybody had experience doing this?  I'm looking at time frames and such. 
  3. How much of an impact might I see on my credit score after these 18 accounts get all of the negative information removed?  I'm between 540-590 right now on most FAKO scores.  Just to be clear, I also just opened my first 2 revolving credit lines ever within the past few weeks, and am planning on using them at less than 30% of their credit limits, and paying the balances in full each month.  
  4. After fully rehabilitating loans and getting them set up with new lenders, has anybody ever had success sending GW letters to the original creditors asking them to delete the original accounts with all of the negative payment history prior to default from CRAs?

Again, I know this is a lot, but I need help.  :smileyhappy:

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Regular Contributor
scvbd99
Posts: 200
Registered: ‎02-22-2013
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Re: Student Loan Default...Specific Questions

I wrote too much, I know.  Any advice or discussion about any little phrase I posted would be helpful.  :smileyhappy:

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SCF
Posts: 1,053
Registered: ‎06-09-2008
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Re: Student Loan Default...Specific Questions

I'll take a crack at your questions:

 

1) It depends, and I don't think the time is really impacted by the agency that did the rehab.  For a while, following the DoE computer upgrade and the results of the economic downturn, it was taking quite a while for rehab'd loans to be bought.  Based on the small sample of these forums, that has picked up significantly as those issues have eased (especially the new computer system settling in).  It depends on funds being available, and the new lender being prepared to take on your loan.  Hopefully it will happen quickly, it may take a couple of months.

 

2) Sounds like a reasonable plan.  Consolidation loans are usually processed fairly quickly, I would expect that step to take 2-4 weeks.  Continue to pay your loans at your current lenders while the consolidation is in-process.  As far as the loan forgiveness program, all 120 payments (that's 10 years worth) have to be made after the date the law specified in 2007.  That means that the earliest anyone can actually go through the forgiveness process is 2017.  As it stands right now, the major thing to plan is for is the tax bill.  The amount that you are forgiven will count as income in the year it is forgiven unless the tax law changes.  I suspect it might as more people wind up with post-forgiveness sticker shock, but again, we'll have to wait until 2017 to see how that shakes out.

 

3) You'll see a positive impact.  How much depends on a lot of factors, so it's very difficult to estimate.  Obviously, the impact will be greater if the lates that led up to the default are also removed.

 

4) Some people have had success, and some lenders even remove the information just as a matter of course.  The law does not require it though, so YMMV.

Regular Contributor
scvbd99
Posts: 200
Registered: ‎02-22-2013
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Re: Student Loan Default...Specific Questions

[ Edited ]

Thanks, SCF.

 

I'm projecting that after 120 payments, there will still be nearly $45K left on my student loan balance.  By then, I'll be making about $50K in AGI per year, so that would put my taxable income at $95K for the year I file for forgiveness....yikes. Right now, that would leave me owing what, an extra $8K in tax for that year?

 

Really hoping for the best in 2017, I guess.  If something doesn't give there, there will be a lot of public service employees out there who make under $50-60K per year royally FUBAR. 

 

Thank you very much for the response.  

||| USAA Visa, $6000 ||| USAA Amex, $5000 ||| Amex BCE, $3000 ||| Chase Freedom, $2000 ||| Cap1 Quicksilver, $2000 ||| Discover It, $1500 ||| TU FICO: 738 ||| EQ FICO: 719 ||| EX FICO '08 : 718
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kjel
Posts: 460
Registered: ‎11-27-2012
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Re: Student Loan Default...Specific Questions


scvbd99 wrote:

Thanks, SCF.

 

I'm projecting that after 120 payments, there will still be nearly $45K left on my student loan balance.  By then, I'll be making about $50K in AGI per year, so that would put my taxable income at $95K for the year I file for forgiveness....yikes. Right now, that would leave me owing what, an extra $8K in tax for that year?

 

Really hoping for the best in 2017, I guess.  If something doesn't give there, there will be a lot of public service employees out there who make under $50-60K per year royally FUBAR. 

 

Thank you very much for the response.  


I work in the non-profit sector and am planning on doing the 10 year forgiveness program. I know I am going to be screwed on the taxes during the forgiveness year, but if you sit down and think what you've paid vs. what you owe it's still a fantastic deal. I consolidated at the end of 2010 and it took a couple of months, hopefully they are more organized and efficient nowadays. I just sent my 9th rehab payment in and am waiting for it to post.


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Regular Contributor
scvbd99
Posts: 200
Registered: ‎02-22-2013
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Re: Student Loan Default...Specific Questions


kjel wrote:



I work in the non-profit sector and am planning on doing the 10 year forgiveness program. I know I am going to be screwed on the taxes during the forgiveness year, but if you sit down and think what you've paid vs. what you owe it's still a fantastic deal. I consolidated at the end of 2010 and it took a couple of months, hopefully they are more organized and efficient nowadays. I just sent my 9th rehab payment in and am waiting for it to post.


I agree, kjel.  

 

And congratulations on making your 9th rehab payment.  That must feel GREAT.  

 

I can't wait.  

 

Make sure to post how things go for you!

||| USAA Visa, $6000 ||| USAA Amex, $5000 ||| Amex BCE, $3000 ||| Chase Freedom, $2000 ||| Cap1 Quicksilver, $2000 ||| Discover It, $1500 ||| TU FICO: 738 ||| EQ FICO: 719 ||| EX FICO '08 : 718
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twall06
Posts: 346
Registered: ‎10-25-2012
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Re: Student Loan Default...Specific Questions

I do not know about the forgiving part but a new lender picking them up just varies . When i did mine one set of loans was picked up after nine payments the other set after 12. And all the old negatives where removed the trade lines are still there but does not show i was ever late.
Regular Contributor
scvbd99
Posts: 200
Registered: ‎02-22-2013
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Re: Student Loan Default...Specific Questions

thanks twall

 

REALLY hoping the same thing happens to my tradelines. 

 

ECMC lists each as a collection account back to the date of first default, but it doesn't show a negative report each month like the other one that Sallie Mae has right now.  

 

Since the economy is on the up, I'm hoping beyond hope that all of the loans get picked up quckly.  ALL I want to do is get them immediately consolidated and start IBR.  

 

My 9 months of payments won't be up until October 2013, and then who know how long after that before I can consolidate.  We'll see.....

||| USAA Visa, $6000 ||| USAA Amex, $5000 ||| Amex BCE, $3000 ||| Chase Freedom, $2000 ||| Cap1 Quicksilver, $2000 ||| Discover It, $1500 ||| TU FICO: 738 ||| EQ FICO: 719 ||| EX FICO '08 : 718
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WisdomAngel
Posts: 2
Registered: ‎03-21-2013
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Re: Student Loan Default...Specific Questions

Please tell me what does ECMC mean, and how can I locate that program to get my student loan balances reduced by making timely payments.? The problem is, I owe over $150,000 dollars, in Stafford loans , subsidized and unsubsidzed, and I cannot afford the big payments they are requesting. I am not in default because I am staying in school at least part time to keep the loans in defferement status. It looks like I will be going to college part time till I die, then the student loan debt will be discharged. I am already in my 50s, I would hate to see myself still studying at 80 or 90 years old , if I live that long, just to prevent default. I need somebody who can direct me to a place that can help get rid of reduce those interest charges on those loans and make the payments reasonable as to not get me evicted with no place to live in exchange for paying the extremly high student loan payments. Its too bad, Former President Clinton had to change the BK law as to no longer include student loans..I think that was terrible If anybody has any suggestions for me , please let me know. FYI.. also my student loans go back to 1980. Very sad. I cannot include them now in my BK chapter 7 filing, I am going to do for the 2nd time.

 

Regular Contributor
scvbd99
Posts: 200
Registered: ‎02-22-2013
0

Re: Student Loan Default...Specific Questions


WisdomAngel wrote:

Please tell me what does ECMC mean, and how can I locate that program to get my student loan balances reduced by making timely payments.? The problem is, I owe over $150,000 dollars, in Stafford loans , subsidized and unsubsidzed, and I cannot afford the big payments they are requesting. I am not in default because I am staying in school at least part time to keep the loans in defferement status. It looks like I will be going to college part time till I die, then the student loan debt will be discharged. I am already in my 50s, I would hate to see myself still studying at 80 or 90 years old , if I live that long, just to prevent default. I need somebody who can direct me to a place that can help get rid of reduce those interest charges on those loans and make the payments reasonable as to not get me evicted with no place to live in exchange for paying the extremly high student loan payments. Its too bad, Former President Clinton had to change the BK law as to no longer include student loans..I think that was terrible If anybody has any suggestions for me , please let me know. FYI.. also my student loans go back to 1980. Very sad. I cannot include them now in my BK chapter 7 filing, I am going to do for the 2nd time.

 


ECMC is just the name of the guarantor for my loans.  Yours is probably different.  There are dozens.  

 

As far as your payment situation goes, if you're enrolled at least half-time in an elibible post-secondary school, you should be able to defer payment on federal loans until you drop below half-time.  If you meet that requirement, you need to talk to your financial aid department about getting that all in order.  There may be other deferment options for you as well.  http://www.nslds.ed.gov/nslds_SA/SaEcTour.do?page=SaEcMp1

 

I don't know the rules for private loans, so if your loans are private, talk to somebody besides me.

 

Also, as long as you're not in default and you can prove that your student loan payments are a hardship (sounds like you will be able to), you might want to ask your loan holder to get you going in IBR (income-based repayment).  http://studentaid.ed.gov/repay-loans/understand/plans/income-based

 

I don't know your entire situation, but your IBR calculated repayments might end up being lower.  

 

Again, this is for government loans, not for private loans.

 

Hope that helps.  

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