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SL Showing as Paid on CR

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Senior Contributor

SL Showing as Paid on CR

My DD just took out her first student loans this semester.   Last night we were looking at her EX CR.   Both the loans show on her report but they show as closed.   Is this because they are defered?  Shouldn't they show as an open loan at 100% util?


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Established Contributor

Re: SL Showing as Paid on CR

Who is the servicer? Any additional annotations? When I started school my loan was put on my report by Nelnet. By the time the second set of loans for the second year were put in the existing Nelnet loans were duplicated by Sallie Mae and the originals closed with notation "Transfer". By the time I graduated all my loans were with Navient and all I had to do was pay one bill. I would not worry too much about it as right now the DoE is actually figuring out which servicer will really pick up the loans.

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Re: SL Showing as Paid on CR

To see more details on the loans, you can check out the studentloans gov website or the NSLDS. The NSLDS will list who the loan servicer is as it is assigned. Credit reports can be confusing because they can say it is "paid" off when it is transferred.



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Re: SL Showing as Paid on CR


@MakingProgress wrote:

My DD just took out her first student loans this semester.   Last night we were looking at her EX CR.   Both the loans show on her report but they show as closed.   Is this because they are defered?  Shouldn't they show as an open loan at 100% util?


Still wondering if anyone has any insight into this.   My daughters loans are showing as closed on her credit reports.  I took out a parent plus loan for this semester and it is also showing as a closed loan on my credit report.

 

When DD's loans for this semester hit it updated her balances but it still shows as a closed loan.  I can only guess it is because the loans are being deferred, but logically to me anyway they sould show as an open loan.

 

 


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Re: SL Showing as Paid on CR

I've still never heard of this. Did you check the NSLDS? Have you been in touch with your servicer or the Dept of Education? This might be a sign of a problem and despite it not being your fault, if you might still have a limited time to correct before it might affect your credit.
On another topic, have you thought about which option you guys are leaning to to repay? For example, if you're aiming to get the student loans forgiven in PSLF or just an Income-driven repayment plan, it can be of great benefit to get the repayment clock started by "repaying" while in school. You complete an in-school deferment waiver and payments can be as low as $0 (student aid doesn't count as income). You'll lose the interest subsidy but REPAYE will actually cover all the unpaid interest for 3 years and half thereafter for subsidized loans. It also covers half the unpaid interest for unsubsidized loans for the duration of the loan. IBR has similar benefits.
For the PLUS loan, you don't have the same benefits and it's based upon your information. Even then, you can consolidate the loans after graduation; you'll then qualify for PSLF or forgiveness through the Income-contingent repayment plan. Just something to think about.



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Re: SL Showing as Paid on CR

This is normal while in deferment- they will show as closed, the balance will update with any accrued interest each month, and the account will be noted as 'paid' every month. Once deferment ends, they will be updated to reflect 'open'.

The closed loans will still count as part of your 'credit mix'. Also - Transunion may report them as open for the entire time they are in deferment.

In my case, EX & EQ reported as closed while TU reported as open. Once out of deferment, all bureaus reported as open. I checked with the issuer (Nelnet) and was advised that this is how deferred loans are usually reported because payment is not required so they are not considered active (though the bureaus may differ).

Pay the accrued interest while in deferment, if you can... otherwise, once deferment ends, the loan balances will be higher than the original loan amounts and FICO will penalize (slightly) for that.
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Re: SL Showing as Paid on CR


@thornback wrote:
This is normal while in deferment- they will show as closed, the balance will update with any accrued interest each month, and the account will be noted as 'paid' every month. Once deferment ends, they will be updated to reflect 'open'.

The closed loans will still count as part of your 'credit mix'. Also - Transunion may report them as open for the entire time they are in deferment.

In my case, EX & EQ reported as closed while TU reported as open. Once out of deferment, all bureaus reported as open. I checked with the issuer (Nelnet) and was advised that this is how deferred loans are usually reported because payment is not required so they are not considered active (though the bureaus may differ).

Pay the accrued interest while in deferment, if you can... otherwise, once deferment ends, the loan balances will be higher than the original loan amounts and FICO will penalize (slightly) for that.

Thanks...I was wondering if that was normal or not.   We are paying the interest monthly so that it dosne't build while she is in school.   A Good thing (maybe) is DD has decided she will attend local community college next year so we won't need to take out any additional loans while she is there. 


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Re: SL Showing as Paid on CR

Paying the interest while in school only makes sense if you have very little interest accruing due to small unsubsidized loans. Even then, maybe not. You can start making loan IDR payments towards forgiveness while in school if you do an in-school deferment waiver. On REPAYE, a student's payments will be low to non-existent. Then the government will pay the interest bill for the subsidized loans for the first 3 years and half of the subsidized loans. It's a good deal if you're going to have substantial loans without a high-paying career to support the standard repayment plan. It's worth looking into.



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