topic Re: Specific law forbidding removal of federal loans lates in Student Loans

Specific law forbidding removal of federal loans lates

bahbahd — Thu, 12 Jul 2012 21:48:20 GMT

My goodwill to Nelnet asking to remove lates on Stafford loans was denied. I sent a letter to an executive but received a call from a low level account manager who stated something along the lines of "I have reviewed your account all day, but there is nothing that we can do. Legally we must report..." The late payments are accurate, accrued after forbearance was up and another forbearance term was denied. I began making minimum payments, but was still accruing lates for many months until I was able to start making much larger payments to catch up.

I'm reading through the United States Code and the Federal Credit Reporting Act to find why student loan lates legally cannot be removed. Is it just the accuracy clause of FCRA 602a [15 U.S.C. § 1681]

http://www.ftc.gov/os/statutes/031224fcra.pdf

http://www.law.cornell.edu/uscode/text/20/1080a

Re: Specific law forbidding removal of federal loans lates

pizzadude — Fri, 13 Jul 2012 04:16:17 GMT

Yes, I believe that is what most creditors fall back on. However the FCRA doesn't mandate that reporting is required....it only states that reported information must be accurate.

Re: Specific law forbidding removal of federal loans lates

bahbahd — Fri, 13 Jul 2012 04:35:57 GMT

I'm wondering how then DoE / Direct Loan rehabilitation is actually skirting this then where they are actually removing past late remarks on their tradeline after rehabilitation is completed. Is this a case where the Feds are using a "Do as we say, not as we do" policy?

Re: Specific law forbidding removal of federal loans lates

pizzadude — Fri, 13 Jul 2012 04:42:41 GMT

@bahbahd wrote:
I'm wondering how then DoE / Direct Loan rehabilitation is actually skirting this then where they are actually removing past late remarks on their tradeline after rehabilitation is completed. Is this a case where the Feds are using a "Do as we say, not as we do" policy?

That's a good question. I suspect that you are probably right in your reasoning,,,,it's ok for them to remove late pays when they feel like it

Re: Specific law forbidding removal of federal loans lates

webhopper — Wed, 18 Jul 2012 05:15:24 GMT

They started rehabbing these loans as an incentive to get more people to pay. Budget cuts within the.Dept of.education meant that the government didn't have enough capital to cover existing defaulted loans as well as issue loans for new students. Just think about the mess we would be in if no one ever paid. Our kids would pay the price by not even getting the opportunity to even go to college.

Re: Specific law forbidding removal of federal loans lates

bahbahd — Wed, 18 Jul 2012 14:29:22 GMT

I fully understand why they are doing it. This just leaves me wishing I would have let my loans default two years ago and rehabbed them myself vs doing the right thing and paying them to begin with, struggling to pay them actually, when Nelnet would not grant forbearance any longer.

Re: Specific law forbidding removal of federal loans lates

webhopper — Wed, 18 Jul 2012 15:54:08 GMT

@bahbahd wrote:
I fully understand why they are doing it. This just leaves me wishing I would have let my loans default two years ago and rehabbed them myself vs doing the right thing and paying them to begin with, struggling to pay them actually, when Nelnet would not grant forbearance any longer.

I totally agree... sometimes its tough to sit back and realize that you are punished for actually doing well and doing the right thing in life...

For example: People who purposely work part - time and cut back on the amount of hours they work to receive public assistance

People who don't marry their partner, so that they can receive public assistance

Having to pay taxes, rather than receiving a 6k refund every year because you actually finished college and got a good job

Having to take out unsubsidized student loans even though the government assumes that your family will actually help you pay for school... When in reality, they will not and do not.
Being able to draw 50% of your spouses Social Security amount despite not working a day in your life

There are numerous examples of how our system is not fair for those of us who work hard to succeed.... However, I'm glad we don't live in a country that lets our poor children and single mothers starve to death, allow our elderly to become sick and homeless, or limits educational opportunities to only the rich. As much as I complain about the system, I'm glad we aren't like other countries. You really aren't going to get any pat on the back for doing the right thing and paying back your loans, the only pat on the back you'll get will come later in life when your kids need student loans, and they are able to get them because of all of the people who did the right thing.

Obviously this is just my opinion, please take with a grain of salt if you disagree... I can see both sides of this story because I've been on both sides of this story.

Re: Specific law forbidding removal of federal loans lates

Anonymous — Thu, 19 Jul 2012 14:25:47 GMT

Texas Guaranteed also removes past late remarks after 9 months successful rehab. So i dont think its an issue of " I can't". More likely "I won't"

Re: Specific law forbidding removal of federal loans lates

bahbahd — Thu, 19 Jul 2012 14:46:34 GMT

This is interesting news. I think Texas Guaranteed is the guarantor of my undergraduate loans while Nelnet is just services them. I never thought about contacting the guarantor. What role does TG provide for you?

Edit: I saw that you said rehab. Yes, I believe it is standard practice for lates to be removed once rehab is completed. Either back to date of default or entirely off of the tradeline. My question was more around removal of lates for someone who does not rehab.

Re: Specific law forbidding removal of federal loans lates

Anonymous — Fri, 27 Jul 2012 18:35:37 GMT

bahbahd wrote: My question was more around removal of lates for someone who does not rehab.

I WOULD LIKE TO HEAR MORE ON THIS SAME QUESTION...

Re: Specific law forbidding removal of federal loans lates

bahbahd — Sat, 28 Jul 2012 15:58:29 GMT

I have not heard of any success of Nelnet removing lates on accounts that are still in repayment. Maybe once the loan is paid off, if I remember one story.

Re: Specific law forbidding removal of federal loans lates

bahbahd — Sat, 01 Sep 2012 17:56:16 GMT

@Anonymous wrote:
Texas Guaranteed also removes past late remarks after 9 months successful rehab. So i dont think its an issue of " I can't". More likely "I won't"

What exactlly is your experience with TG? More and more now I wish I had just defaulted on my loans and worked with TG instead of paying Nelnet.

Re: Specific law forbidding removal of federal loans lates

Anonymous — Fri, 21 Sep 2012 00:50:55 GMT

Just got US Dept. Federal Loan lates removed!!! Mailed goodwill about a month ago then faxed the same letter to the Ombudsman and got a call from here last week saying no, but then after further explaining I got a call back today saying YES!!

Re: Specific law forbidding removal of federal loans lates

bahbahd — Fri, 21 Sep 2012 03:32:19 GMT

DoE loans are much more forgiving it seems. Congrats. The main thing hurting my credit is SL lates.

Re: Specific law forbidding removal of federal loans lates

algorithmslave — Fri, 21 Sep 2012 06:54:11 GMT

@Anonymous wrote:
Just got US Dept. Federal Loan lates removed!!! Mailed goodwill about a month ago then faxed the same letter to the Ombudsman and got a call from here last week saying no, but then after further explaining I got a call back today saying YES!!

This is interesting....I have heard of peeps offereing a trade for each 30 days late for equal amout in Forbearance. I have often wondered if this would work?

Re: Specific law forbidding removal of federal loans lates

Sonic98 — Wed, 26 Sep 2012 16:39:56 GMT

Yeah it's kind of crazy. You can default, rehab, and have them removed. But you can be late a couple months or be reported late because the lender does start your deferrment at the right time, and there is nothing you can do about it unless the lender agrees to correct your report or the CRAs believe the information you send them.

Re: Specific law forbidding removal of federal loans lates

bahbahd — Wed, 26 Sep 2012 16:46:27 GMT

Tell me about it. I paid to avoid default yet could not pay enough to be current for over a year. I was super punished. The kicker is, I did not get any notification that my last forbearance request was denied before I was several months behind and my guarantor was contacting me.

Re: Specific law forbidding removal of federal loans lates

algorithmslave — Thu, 04 Oct 2012 21:49:51 GMT

@bahbahd wrote:
Tell me about it. I paid to avoid default yet could not pay enough to be current for over a year. I was super punished. The kicker is, I did not get any notification that my last forbearance request was denied before I was several months behind and my guarantor was contacting me.

Add to the fact that, you loose history if you signed up for the Special Direct Consolidation loan.....

Re: Specific law forbidding removal of federal loans lates

bahbahd — Thu, 04 Oct 2012 21:52:02 GMT

What is the Special Direct Consolidation Loan?

Edit: I googled it. http://studentaid.ed.gov/repay-loans/consolidation/special I'll be really upset if I could have used this consolidation method to get rid of my negative nelnet tradelines.

Re: Specific law forbidding removal of federal loans lates

algorithmslave — Thu, 04 Oct 2012 21:55:13 GMT

@bahbahd wrote:
What is the Special Direct Consolidation Loan?

http://studentaid.ed.gov/repay-loans/consolidation/special

Please see the link above...burden your mind with this...it is NOT A CONSOLIDATION of loans. It was designed to bring all of ones student loans under one roof. This was a huge backfire thoough...it counts as a consolidation under FICO because a new account number was detected. Although if I call the lender, they have all the history of the loans. Interesting.........