topic Re: Anyone Dealing With Federal Student Loan Consolidation? Please Weigh In... in Rebuilding Your Credit

Anyone Dealing With Federal Student Loan Consolidation? Please Weigh In...

Anonymous — Tue, 19 May 2015 16:43:11 GMT

I have a question mainly for any readers with dispute knowledge and regulation knowledge, particularly on federal student loans, but any readers can give me some clues on how to attack this...

In March 2011, I had my student loans consolidated from loans opened in 2001 of which I had defaulted on. On my 3 recent CRs from the various agencies, Experian doesn't report at all, TransUnion reports it from "Direct Loan Svc System" and Equifax reports it from "US Department of Edu/AFSA." Both of which showed up as separate agents of the US Dept. of Ed., before Nelnet seemingly took over their accounts. But that poses a problem, yes? As one or both of these servicers is furnishing inaccurate information, correct? Is this something I can dispute with the credit reporting agencies about?

Secondly, prior to Nelnet having these accounts transferred to them, as is stated in the comments/remarks portion, they report major delinquencies of 90 and 120 day lates, though, these lates were given after my enrollment and after the official start date of the semester, so at the most, I should have been 60 days past due. I know it's not good either way, but the idea given by some of the posts I've read is that 30 and 60 day lates are seen as "minor" and higher are considered "major" delinquencies, and should have been converted to "deferred" status. Can I dispute, at least, the 90 and 120 day lates, as they should have fallen under deferment? (I have proof of a concurrent Federal Student Loan that IS in deferment due to active enrollment on my CR.)

And finally, after the transfer, Nelnet retroactively reported their particular tradeline of my account as "OK" all the way back to the initial opening date, though the furnishing companies during that time do not, obviously, report my debt as "OK." Can Nelnet even retroactively report something that was transferred to them? (Even though it works in my benefit.)

I know I won't be able to get the tradelines with the delinquencies off without waiting the allotted time, i.e. 3 more years, but I want at least the fallacies corrected and if they can be removed due to violating some Fair Credit Reporting practices, then all the better, because this seems altogether fishy.

Re: Anyone Dealing With Federal Student Loan Consolidation? Please Weigh In...

gdale6 — Tue, 19 May 2015 20:59:18 GMT

If you have something that contradicts what they are reporting then by all means you can dispute it. I would do so directly with the lender and not thru the CRA. Use the Sec 623 direct dispute on this

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/Direct-dispute/td-p/2309095

Re: Anyone Dealing With Federal Student Loan Consolidation? Please Weigh In...

Anonymous — Tue, 19 May 2015 22:02:12 GMT

So, I should dispute it with the data furnisher first? Okay, I will give that a try ASAP.

Re: Anyone Dealing With Federal Student Loan Consolidation? Please Weigh In...

2b2rich — Tue, 19 May 2015 23:31:51 GMT

@Anonymous wrote:
I have a question mainly for any readers with dispute knowledge and regulation knowledge, particularly on federal student loans, but any readers can give me some clues on how to attack this...

In March 2011, I had my student loans consolidated from loans opened in 2001 of which I had defaulted on. (Who were your loans with at the time you defaulted?) On my 3 recent CRs from the various agencies, Experian doesn't report at all, TransUnion reports it from "Direct Loan Svc System" and Equifax reports it from "US Department of Edu/AFSA." Both of which showed up as separate agents of the US Dept. of Ed., (Direct Loans is most likely who you consolidated your loans with. They are separate from the U.S. Dept of Ed in that the U.S. Dept of Ed is a garauntor; they promise to pay Direct Loans if the student defaults and they can not get the student to pay. The US Department of Edu/AFSA technically is a department within the U.S. Dept of Ed who was servicing your loan while it was in default.) before Nelnet seemingly took over their accounts. Nelnet wears several hats, but they are a loan servicer for the U.S. Dept of Ed, so it may be who is servicing your consolidated loans. But that poses a problem, yes? As one or both of these servicers is furnishing inaccurate information, correct? Is this something I can dispute with the credit reporting agencies about?

Secondly, prior to Nelnet having these accounts transferred to them, as is stated in the comments/remarks portion, they report major delinquencies of 90 and 120 day lates, though, these lates were given after my enrollment and after the official start date of the semester, so at the most, I should have been 60 days past due. I know it's not good either way, but the idea given by some of the posts I've read is that 30 and 60 day lates are seen as "minor" and higher are considered "major" delinquencies, and should have been converted to "deferred" status. Can I dispute, at least, the 90 and 120 day lates, as they should have fallen under deferment? (I have proof of a concurrent Federal Student Loan that IS in deferment due to active enrollment on my CR.)

And finally, after the transfer, Nelnet retroactively reported their particular tradeline of my account as "OK" all the way back to the initial opening date, though the furnishing companies during that time do not, obviously, report my debt as "OK." Can Nelnet even retroactively report something that was transferred to them? (Even though it works in my benefit.)

I know I won't be able to get the tradelines with the delinquencies off without waiting the allotted time, i.e. 3 more years, but I want at least the fallacies corrected and if they can be removed due to violating some Fair Credit Reporting practices, then all the better, because this seems altogether fishy.

So you're saying that, in 2011, you had all of your student loans consolidated. (some or all of your loans were in default at the time).

The consolidated loan may have had a few lates, but it is still a good tradeline and not in default or collections?

I would be able to give you a better idea of what you should be seeing on your report if I knew more about the transfers through the life of the loans, but I can tell you this much, You will probably see them reported by more than one group, at least 7 years from 2011 (these would be the ones that you consolidated). If they have been consolidated and are in good standing, then one tradeline should show a zero balance and the other show the current balance of your loans.

Re: Anyone Dealing With Federal Student Loan Consolidation? Please Weigh In...

Anonymous — Wed, 20 May 2015 00:08:55 GMT

The 03/2011 loans were consolidated through Direct Loans. I have the original contract to Direct Loans, this is particularly why I am suspicious about the AFSA tradeline. The consolidated loans were transferred/closed by these servicers and opened through Nelnet, some time at the end of 2011. According to those tradelines, Nelnet reports them as opened in 03/2011, not when they acquired them. Also, these TLs prior to the transfer to Nelnet report lates, some while they should have been in deferment.

As for the way it reads on my CR, it show a single account with a $7,900 balance, and reports from 03/2011 to 08/2011. Then it splits the balance into 2 separate accounts, of $2,900 and $5,000, and reports from 10/2011 to 03/2012. Finally, Nelnet acquires it and reports it as the 2 separate accounts from 03/2011 until this month. While the balances jive, the fact that much of the lates accrued should be deferred comes into play. Also, each reassignment closes out the previous ones. I cannot dispute it as something needing to be removed, I just want it corrected, unless it's false or duplicated.

I hope it clears up a bit of the confusion.

Re: Anyone Dealing With Federal Student Loan Consolidation? Please Weigh In...

2b2rich — Wed, 20 May 2015 01:50:05 GMT

@Anonymous wrote:
The 03/2011 loans were consolidated through Direct Loans. I have the original contract to Direct Loans, this is particularly why I am suspicious about the AFSA tradeline. Who was reporting the loans while they were in default? I would think that was U.S. Dept of Ed/ AFSA (who is part of the U.S. Dept of Ed). Either way, the AFSA tradeline should be covering dates that start with the time of your default (when it was transferred from your original lender to the U.S. Dept of Ed). The consolidated loans were transferred/closed by these servicers and opened through Nelnet, Nelnet didn't open these loans, they may be reporting them, but they are a "Loan Servicer" for the U.S. Dept of Ed. The U.S. Dept of Ed has owned your loans since they defaulted and will continue to until they're paid off. "Direct Loans" is the consolidation dept of the U.S. Dept of Ed. (Just saying this because sometimes it makes it easier to understand. To me, Student Loans can be more confusing than any class I took in college ) some time at the end of 2011. According to those tradelines, Nelnet reports them as opened in 03/2011, not when they acquired them. Again, Nelnet is only managing these loans for DL. They have to report that these loans originated in 3/2011 because anything else would be inaccurate. Also, these TLs prior to the transfer to Nelnet report lates, some while they should have been in deferment. Should have been in deferrment, or were in deferrment? If they were in deferrment, then I would definitely dispute those. You can dispute these TLs just like any other through the CRAs, but it's always been my experience that contacting the U.S. Dept of Ed instead, works better.

As for the way it reads on my CR, it show a single account with a $7,900 balance, and reports from 03/2011 to 08/2011. Then it splits the balance into 2 separate accounts, of $2,900 and $5,000, and reports from 10/2011 to 03/2012. Finally, Nelnet acquires it and reports it as the 2 separate accounts from 03/2011 until this month. While the balances jive, the fact that much of the lates accrued should be deferred comes into play. Also, each reassignment closes out the previous ones. I cannot dispute it as something needing to be removed, I just want it corrected, unless it's false or duplicated.

I hope it clears up a bit of the confusion.

The two separate accounts (ref the $2,900 and $5,000) happens often. I'm not entirely sure of the reason it's necessary, but one is your subsidized loans, and the other is your unsubsidized loans. The only thing I can think of is that the interest on subsidized loans is paid for by the U.S. Dept of Ed (or Federal Government) and the student is not responsible for them. There not really 2 separate loans, but subsidized is loans that you had while in school and were covered under an in school forebearance.