Treasury Offset

[Anonymous]

There are a lot of benefits that the rehab provide that consolidation can't. The biggest being that when you defaulted, once you complete your rehab, all notations regarding the default should be taken off your CR... if you consolidate, that info does stay on there until it ages off. Now it might not take off all of the negative data, such as the lates leading up to the default, but it would take of the charge offs and collection accounts that are there for your loan.

[SCF]

In addition to the benefits mentioned above - rehab results in a clean tradeline that is backdated to the original open date of your defaulted loan, where consolidation results in a brand new tradeline.  Rehab obviously benefits most people's AAoA.  Once you complete rehab, much of the collection fees/penalties are removed.   With consolidation, most of those costs are just rolled into the new loan.

[stinastina]

Thank you for the info. If most of my loans are showing paid as agreed then it wouldn't hurt me to cosolidate early. Now that I'm in rehab on the ones reporting positively, the report status should not change right ?

[SCF]

I'm not sure I understand.  If your loans are reporting a positive status, you can't be in rehab.  Rehabilitation is only for defaulted federal student loans.  Are these loans just old enough that they no longer appear on your report?

Even if that's the case, going through rehab and getting the reduction in the collection fees/penalties is still worth it unless you're quite short on time.

[stinastina]

I can't explain why they are reporting positively - they just are. They also seem to be outdated since it shows the lender is Sallie Mae and they are owned by varius orgs now. They are pretty old - most are 20+ years old. I've already made my 1st payment on one set and sent my rehab paperwork in for another. Tell me more about the reduction in fees and penalties.

[SCF]

When you complete rehab, the remaining fees/penalties are removed from the loan balance - as opposed to consolidation where those fees are just capitalized into the principal of the new loan.

[stinastina]

Thanks, SCF, for the info !

I actually came to this thread about the offset issue and got sidetracked with my own questions. One of my servicers told me they had applied for offset for this year. Since I didn't have any income last year, I'm not stressed. The representative said they have to apply for offset every year. So as long as I am making my payments this year, there is no reason for them to apply for offset next year.

[_NERD]

Thanks for this info. I called the treasury offset hotline. I hadn't filed taxes for 2013 or 2014 until late last year because dept of education snatched all of our federal refunds in 2011 and 2012. 100% of my 2013 refund arrived last month. Apparently so will 2014 and 2015 because I'm not currently in the TOP database.

Here I was sweating bullets. Jaden63 and SCF are both on point.