New Visitor
Posts: 1
Registered: ‎09-26-2012
Re: Massive confusion about student loan rehab outcome.

Amazing recount - as this is EXACTLY the situation I am facing.  I was told that all negative credit entries would be removed as a result of complation of rehabilitation, and if you check out their website at the DOE explaining rehab, it states the following: 


Once your loan is rehabilitated, you may regain eligibility for benefits that were available on your loan before you defaulted. Those benefits may include deferment, forbearance, a choice of repayment plans, loan forgiveness, and eligibility for additional federal student aid.

Other benefits of loan rehabilitation include the removal of

  • the default status on your defaulted loan,
  • the default status reported to the national credit bureaus,
  • wage garnishment, and
  • any withholding of your income tax refund made by the Internal Revenue Service (IRS).

After rehabilitation, your monthly payment may be more than the amount you paid while you were rehabilitating your loan. Collection costs may be added to your principal balance, increasing the total amount you owe. Delinquencies (late payments) reported before the loan defaulted will not be removed from your credit report.


I get the fact that the late payments will always show from the original service provider, however overall loan status from Servicer A continues to show 'Default' and turned over to Attorney as opposed to 'Paid As Agreed' and 'Closed'.  Maybe I'm chasing something that is not worth the overall benefit, but if the status was amended from Default - even though the late payments still showed - wouldn't that have some benefit?