topic Re: Paid Defaulted Student Loans Can They Be Goodwilled? in Student Loans

Paid Defaulted Student Loans Can They Be Goodwilled?

jacksont1981 — Wed, 01 Oct 2014 19:11:31 GMT

Hi everyone,

My student loans went into default but are now all paid in full. I got the original loans from the Department of Education deleted which had 120 day lates on them however the defaulted trade lines still exist and it states 0 balance paid collection. I have 7 of these tradelines on Equifax and Experian all saying the same thing. Transunion never showed any of the loans thank goodness. Can I goodwill these off? Anyone ever had any success goodwilling a defaulted student loan off their report?

Re: Paid Defaulted Student Loans Can They Be Goodwilled?

Madoffed — Wed, 01 Oct 2014 21:42:05 GMT

I'm in pretty much the same boat. I've sent one goodwill letter, nothing.

I posted this a long time ago with no responses, so either no one has ever tried, or no one has had success. Either way, not great for you and me.

http://ficoforums.myfico.com/t5/Student-Loans/Suckered-into-paying-off-defaulted-student-loans-instead-of/m-p/3076826

Re: Paid Defaulted Student Loans Can They Be Goodwilled?

jacksont1981 — Wed, 01 Oct 2014 21:46:44 GMT

@Madoffed wrote:
I'm in pretty much the same boat. I've sent one goodwill letter, nothing.

I posted this a long time ago with no responses, so either no one has ever tried, or no one has had success. Either way, not great for you and me.

http://ficoforums.myfico.com/t5/Student-Loans/Suckered-into-paying-off-defaulted-student-loans-instead-of/m-p/3076826

LOL hey well at least I got you to respond! Have you tried calling? I was thinking of trying that tomorrow and see what happens and I was in the middle of writing a goodwill letter to them when I saw my email notification from myFICO

I hope something can be done short of waiting for it to just drop off from my credit reports.

Re: Paid Defaulted Student Loans Can They Be Goodwilled?

Madoffed — Thu, 02 Oct 2014 14:44:00 GMT

I called and spent like an hour on the phone with a really nice rep. He said there was nothing he could do, but that the fact that I just stroked them a check rather than accept rehab on the prompting of the representative might present an opportunity. He suggested I write a letter to the Dept of Education - oh? send a letter to the government? that'll work well - telling them that I was induced to pay in full in a manner that harmed me when the rep should have (was obligated to??) offer rehabilitation. They responded saying basically that the debt was accurately reported, wait 7 years.

So, I paid off about $85,000 in student loans...the last $20,000 with one check a bit over 10 years after graduation and it shows derog on my credit report.

I'm due to write another letter this month, but their position is that regardless of the circumstances, what the rep did/didn't do, how fast or how much I paid off that one of my loans was delinquent and I paid it off without rehabbing so it is forever delinquent. I'm thinking of writing Obama...think he'll know I didn't vote for him?

Re: Paid Defaulted Student Loans Can They Be Goodwilled?

ERoosky99 — Mon, 06 Oct 2014 08:14:32 GMT

@jacksont1981 wrote:
Hi everyone,

My student loans went into default but are now all paid in full. I got the original loans from the Department of Education deleted which had 120 day lates on them however the defaulted trade lines still exist and it states 0 balance paid collection. I have 7 of these tradelines on Equifax and Experian all saying the same thing. Transunion never showed any of the loans thank goodness. Can I goodwill these off? Anyone ever had any success goodwilling a defaulted student loan off their report?

Looking at this screen shot is kind of surreal. My Equifax profile has 16 of these Department of Education (ED) student loan accounts that mirrors this image. Only difference is that my accounts start with 1189XXXX and was opened in 10/2003 not 10/2001 like yours here. I had 16 of the accounts deleted from TransUnion, but both Equifax and Experian have "validated" the accounts as mine although when I ask them to give me the contact/party that "validated" the information they're unable to do so. I had a very heated phone conversation with Experian on two separate occasions recently; complete waste of time and energy. I want these accounts GONE like yesterday!!! I consolidated my federal student loans so they were paid in a full a year ago exactly, but I DO NOT want 16 negative trade lines reporting for several more years to the CRAs. It's so frustrating!!! I seriously believe that defaulted student loans are worse than filing bankruptcy because they damage your credit and are nearly IMPOSSIBLE to get removed! From every source I've heard from, the ED DOES NOT goodwill loans that are paid in full. Maybe someone out there can chime in and prove me wrong. So, the only thing I care about is working an angle to get them removed. Good luck to you, and anyone else, going through this struggle.

Re: Paid Defaulted Student Loans Can They Be Goodwilled?

empiror22 — Wed, 08 Oct 2014 00:24:11 GMT

from my own experience the answer is no they will be there for 7 years after paid or hopefully from the first delinquecy. I have talked with a ombudsman from the ED dept, they have asked on my behalf, as well as me sending letters for the past 2 plus years. I have asked my congress persons to look into this as well. So far no luck, i sent a letter once a month (via email, and also regular mail) to the ED dept/ Great lakes (servicer) and the orginial grantors. So far no luck what so ever. basically i've been told they can say on your report up to 7.5 years AFTER YOU PAY them OFF, they have a special term limit for how long they can report ( don't remember the number of article) but I was once sent a letter quoting the passage about you paid but we are not /don't have to remove until that deadline.

Re: Paid Defaulted Student Loans Can They Be Goodwilled?

ERoosky99 — Wed, 08 Oct 2014 20:49:46 GMT

@empiror22 wrote:
from my own experience the answer is no they will be there for 7 years after paid or hopefully from the first delinquecy. I have talked with a ombudsman from the ED dept, they have asked on my behalf, as well as me sending letters for the past 2 plus years. I have asked my congress persons to look into this as well. So far no luck, i sent a letter once a month (via email, and also regular mail) to the ED dept/ Great lakes (servicer) and the orginial grantors. So far no luck what so ever. basically i've been told they can say on your report up to 7.5 years AFTER YOU PAY them OFF, they have a special term limit for how long they can report ( don't remember the number of article) but I was once sent a letter quoting the passage about you paid but we are not /don't have to remove until that deadline.

For this reason, I feel that defaulted student loans are tantamount to a bankruptcy. Many youth need to know this because SO MANY are taking out federal student loans, and don't know the negative implications that can occur if they fall behind (includes myself)! I would have taken more care to make sure that I filed for deferment/forbearance prior to ignoring the loans and allowing them to default.

Re: Paid Defaulted Student Loans Can They Be Goodwilled?

Madoffed — Tue, 28 Oct 2014 16:36:29 GMT

Well, I don't want to jinx it, but I got a call back from a very nice gentleman at the ombudsman's office after last month's call with some pretty unbelievable news. Looks like they removed my student loans from my credit reports on or about the 15th of October. I just pulled my Experian and Dept. of Education no longer shows up in the derrogatory items section - no longer in accounts in good standing either. My score hasn't changed at all, is it possible that the positive and negative effects were perfectly balanced???

Anyway, going to check the other two reports over the coming weeks. I'll come back and let you guys know.

Bear in mind, the story I told was no bs (genuine consolidation error resulting in an orphaned loan, natural disaster, wife with serious illness, followed by full payment of $20,000 to settle the loan when rehabilitation was an option), so YMMV. The good news is that it seems as though if there is a genuine error/hardship they will research the issue and help you. The bad news, I really got no bang for my buck in the score dept. Still, I'm pleased with the outcome.

Re: Paid Defaulted Student Loans Can They Be Goodwilled?

jacksont1981 — Wed, 29 Oct 2014 03:15:00 GMT

@Madoffed wrote:
Well, I don't want to jinx it, but I got a call back from a very nice gentleman at the ombudsman's office after last month's call with some pretty unbelievable news. Looks like they removed my student loans from my credit reports on or about the 15th of October. I just pulled my Experian and Dept. of Education no longer shows up in the derrogatory items section - no longer in accounts in good standing either. My score hasn't changed at all, is it possible that the positive and negative effects were perfectly balanced???

Anyway, going to check the other two reports over the coming weeks. I'll come back and let you guys know.

Bear in mind, the story I told was no bs (genuine consolidation error resulting in an orphaned loan, natural disaster, wife with serious illness, followed by full payment of $20,000 to settle the loan when rehabilitation was an option), so YMMV. The good news is that it seems as though if there is a genuine error/hardship they will research the issue and help you. The bad news, I really got no bang for my buck in the score dept. Still, I'm pleased with the outcome.

Congrats! That is awesome! Even though you didnt get the score bump you hoped for, I am a firm believer in clean reports is better than dirty ones. Especially dirty with student loan debt. I am going to give the ombudsmans office a try and see how that goes. Thanks for reporting back as this is very helpful info.

Re: Paid Defaulted Student Loans Can They Be Goodwilled?

Madoffed — Thu, 30 Oct 2014 19:06:43 GMT

Best of luck. FYI when I spoke with him the first time it was tough to keep from getting angry. I got the impression he was testing my story, because I'm sure they hear it all. Once he realized that I was on the level, he got off the phone and apparently went to work. I didn't hear from him again until he called to say that it had already been removed from my reports. So...keep your cool and don't exaggerate - I'm sure they go and review the elements of your story that are verifiable.

I'm still pissed that I didn't get the 10-15 points I needed to break 700. Maybe it takes a few weeks to update, it did just come off a week ago.

Re: Paid Defaulted Student Loans Can They Be Goodwilled?

Madoffed — Wed, 17 Dec 2014 17:58:01 GMT

Update. They didn't remove the derrogatory items, they put me in a loop between the ombudsmans office and DRG. Sounds like they're going to screw me...

Re: Paid Defaulted Student Loans Can They Be Goodwilled?

Madoffed — Thu, 08 Jan 2015 20:02:23 GMT

Update 2. They did remove it after all!! 2 of 3 CRAs got it right. Equifax has not removed it as yet. Spoke with Dept. of Ed. and they said I should dispute it with Equifax and it should be taken care of when they go to verify. The agent I spoke with did say that it was extremely rare for them to do what they were doing for me. As in, he'd only heard of one other case. So, ymmv. I'll post one more time when - hopefully - Equifax removes it as well.

Re: Paid Defaulted Student Loans Can They Be Goodwilled?

Madoffed — Fri, 23 Jan 2015 14:58:24 GMT

Update 3: Came back on one CRA, now Experian is the only one that has removed it. So frustrating.

Re: Paid Defaulted Student Loans Can They Be Goodwilled?

Madoffed — Tue, 17 Feb 2015 16:48:06 GMT

Another Update: On the advice of the Dept. of Ed. I disputed the debt so that they would have the opportunity to remove it for me. Trans Union did so this weekend. Ponied up another $20 so my app would show me that shiny new score well into the 700s...did not move a single point for removal. Ahh well, having the derrog gone feels good enough. Is it possible that the negative effects of that derrog were perfectly balanced with the positive effects of such an old debt that its removal had zero impact??

Re: Paid Defaulted Student Loans Can They Be Goodwilled?

Madoffed — Wed, 29 Apr 2015 14:59:13 GMT

Update 4: As you can surmise from my signature line, one of the agencies will not remove even though the Dept. of Ed. has instructed them to do so. Filed the dispute, they put it under review...changed nothing. Lame. About to spend the hour on the phone it will take to get the Dept. of Ed rep up to speed, then file another dispute. Don't let the bastards grind you down.

Re: Paid Defaulted Student Loans Can They Be Goodwilled?

jacksont1981 — Wed, 29 Apr 2015 18:37:47 GMT

I really appreciate you keeping this thread up to date. Its really helpful for others to see how all this works and how extremely tough it is to get the DOE to fix anything on your credit let alone delete it LOL

Re: Paid Defaulted Student Loans Can They Be Goodwilled?

Anonymous — Fri, 01 May 2015 22:19:12 GMT

Glad I found this thread. I'm in basically the same exact situation. Long story short, I had 14 individual student loans (disbursements) for doctorate school totalling approx $165k. Deferred them and then was financially strapped for awhile and the loans went bad. Got my proverbial crap together and finally faced the music. Balance for principal and interest had grown to $225k at the beginning of this year, along with another $60k in collection fees added on top.

I was able to get the collection fees waived completely, but only by paying in full on the defaulted loans. At that point, they were held at 3 different collection agencies. So at this point, I've completely paid off the student loans. I owe NOTHING!!

Bad news is that during my time of burying head in the sand and hiding from the problem, the loans changed hands like 2-4 times each. What started out as 14 tradelines ballooned into 39. All 39 of these tradelines are "negative" marks even though they show balance owed as $0.

I've called companies I didn't even know ever had my loans and been told at pretty much every turn that I'm basically out of luck and sorry can't help. I fully understand that I screwed up big time and did not fulfil my end of the bargain. But at the same time, I could have rehabbed them and probably never paid the entire loan off and been in a better position credit wise. Frustrating!! Not to mention how annoying it is that I'm being punished 3 fold for the same loans/debt due to the selling off of my balance over the years. I've pretty much given up on getting rid of all the negatives at this point. Just wanted to share my pain and maybe make some others in the same boat not feel like you're the only ones