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Student loan payoff.

New Contributor

Student loan payoff.

So here is my predicament.  I have a Nelnet loan that has continued to report 120+ days past due after a transfer to Florida Department of Education.  I was thinking of just paying it off to at least show the account as closed.  

 

So my question is.  If I pay it off, about $1700.  At this point, For both Nelnet and Florida Department of Education, this should report both tradelines as paid off at that point right?  Right now Nelnet is showing 120+ days past due and Florida Department of Education is showing as a Chargeoff.  

6 REPLIES
Established Member

Re: Student loan payoff.

Call the Florida DoE and as them if a rehab is possible for your loan. If they say yes, then opt for it, make a couple or 3 consecutive payments and make a baloon payment to end it. The tradeline should report correctly after that.

New Contributor

Re: Student loan payoff.

Thank you.  

Re: Student loan payoff.

I think you're better off just paying it off now.  Just my opinion.  Actually just made a post about a similar experience...owed $1,100 and rehabbed to get out of default and then paid the final $513.  But, I don't really see the benefit of spending the next 10 months paying off a collection account just to pay off the final balance immediately after.

 

I could be misinformed, but that's my take.  My loan borrower isn't going to remove the lates anyway.

Highlighted
Established Member

Re: Student loan payoff.

I would recommend going through the rehabilitation process with your guarantor at this point. You could just pay it off in full, however this will not benefit your credit in any way with the previous servicer. If you successfully complete the rehabilitation program with the guarantor, then your servicer, Nelnet, will change your final status with them from claim filed/default to transferred which will look much better on your credit. If you do not rehabilitate, Nelnet will not adjust your credit.

Frequent Contributor

Re: Student loan payoff.

Call the Florida DoE and as them if a rehab is possible for your loan. If they say yes, then opt for it, make a couple or 3 consecutive payments and make a baloon payment to end it. The tradeline should report correctly after that.

 

This is NOT a rehab.  A rehab involves 9 consecutive monthly payments.  All the above will get you is a paid collection.

Ex-Financial Aid Officer

Ex-Student Loan Collector
Established Contributor

Re: Student loan payoff.

Some of the posts above are from people who do not fully understand the rehabilitation process. Advocating full payoff payment to a collection agency or anyone performing collection duties on a federal student loan is not a good idea. You will be missing out on completing a full rehabilitation process, creating new SL tradelines for the new SL accounts that get picked up at the end by a new lender and the opportunity to make monthly payments to a good tradeline for a while before paying the loans off. There is much to be be said for having positive SL tradelines for 10 years after they have been paid off.