Called the Ombudsman today.  They could not help me.

9th Payment Aug 10th

10th (1st payment to DOE) Oct 3

No change to T/Ls or account.

Called Direct Loans. I informed her that the DOE website says it can take UP TO 60 days to get loan back in house.  CS person DID NOT confirm this.  I told her that the website says this.  She still did not acknowledge timeframe.  I am to continue to make payments monthly until loan is taken over.  It is possible that it will NEVER happen.

T/L cannot be cleaned up until loan is taken over.  I offered to get private funding and pay it off.  CS said T/L will say "paid in collections", not "paid as agreed , paid in full".

So the Ombudsman agreed with all of this.  The only way the T/L gets cleaned up is when the loan gets taken over.  So the only real solution is to stay the course and continue to pay them monthly.  This makes no sense I know..   I then told them the system is broke and Obama needs to go.  She didnt even crack a smile at that one. 

Since it is the DOE there is no Judicial recourse either.  So I could end up paying off the loan in 3 years and my T/L will say paid in collections.  The DOE sux.