Student Loan issues

[ficonewb]

I had defaulted on a student loan. Shame on me. I have been paying on it religiously after making a deal for them to delete upon completion. Now that my balance is only 325.00 they are saying that I'm not eligible for the program that deletes the negative information. Obviously, I could just pay it off, but should I try to force the PFD or just suck it up and deal with it for the next 7 yrs.

[Anonymous]

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@ficonewb wrote:
I had defaulted on a student loan. Shame on me. I have been paying on it religiously after making a deal for them to delete upon completion. Now that my balance is only 325.00 they are saying that I'm not eligible for the program that deletes the negative information. Obviously, I could just pay it off, but should I try to force the PFD or just suck it up and deal with it for the next 7 yrs.

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Is this one of those "rehabilitation" programs? What is the name of the company you're dealing with? Did you ever have something in writing from them stating that they will delete? Consider inquiring again, maybe it was just a clueless rep, because I know that they are supposed to delete once you're done as I had just undergone something like this myself.

[ficonewb]

Yeah. That is exactly what it was - a rehabilitation. The company is ISAC (Illinois Student Assistance Commission). They never gave me anything in writing, and now they are saying that I don't qualify. I have tried speaking with a manager, and he never returns my calls. 4 voice mails and still no reply.

Message Edited by ficonewb on 10-23-2007 12:09 PM

[Anonymous]

Was it just one rep who told you that you're not eligible? Try calling them again acting like no one ever told you that you're not eligible, and say that you wanted to make sure that after your last payment it would be removed from the reports and request that you get that in writing. If the other rep also says you're not eligible then I really don't know what to tell you. Maybe someone else can chime in.

[Anonymous]

I also just noticed you wrote that you'd otherwise have to deal with it for another 7 years but that's not true. It's only 7 years from DOFD, which was probably at least a few years ago. Not to say that it shouldn't be removed from the reports now.

[ficonewb]

I guess I'm still shaky as to when something actually falls off my report.

[Anonymous]

Have you tried working down from this web site? (http://www.ed.gov/offices/OSFAP/DCS/contact.us.html)

I believe there are dispute contact numbers there.  This is the US Dept of Ed rehabilitation website.

Good luck - Dave

[creditgirl]

How long having you been paying on the loan?  I ask because in order to qualify for a rehab (to have it removed totally from your cr), you have to pay on it for 12 months. It doesn't matter if you can pay it all off at once, it has to be 12 consecutive monthly payments. I know it sounds crazy but that's the rule.

I wonder if you would've gotten a better deal by just consolidating your loans and including this one in it. For me, when I consolidated a loan that was in default (but shouldn't have been- long story!), the negative information is being TOTALLY removed once the consolidation is complete. The loan doesn't currently show defaulted on my cr though. It says it's a collection account. 

What the Fin Aid Office told me was that they can't legally keep the loan showing in collections once it's paid completely because, technically it is not.  Now I don't know that you will have the same luck. The school has messed up my loan considerably and may just be making this allowance for that reason.

I DO know, though, that the only way to qualify to have the loan removed completely by rehabbing it is to pay 12 consecutive monthly payments. If you haven't done that, they may not remove the default. I was a Fin Aid Officer and I worked for Direct Loans during my career so I'm sure about that part.

[ficonewb]

Yeah, they told me that I had to pay 11 consecutive payments without ever being late. I said done deal and gave them 11 checks over the phone right then and there. So everything goes fine for the first 7 months or so, but I keep getting notices that I'm past due even though the money is coming straight from my checking account. Obviously, I called and asked what it was all about. They said not to worry about it - that the department that generated the bill didn't always calculate the rehab program correctly. So I let it go, then I'm checking my credit report to see how things are shaping up and I find ISAC reporting me as past due every stinking month. I was furious and called and asked why they were posting that way when I had been paying as agreed. Hell, I didn't even have a choice, they took the money from my account one way or another. When I explained that I was on the rehab program, they told me that I wasn't eligible due to the fact that I was late every month. I asked how that was possible considering the fact that THEY are the ones who setup my payment plan and took the money every month...and that is where I am now - leaving messages for a manager that never calls me back. I have always taken responsibility for my default status; I could have paid in full a year ago, when they called. They offered the rehab program, and now not only do I have late charges and many months of late payments on my CR, but they are not going to remove it as agreed.

[creditgirl]

Hmm, that's strange.  Your bank should be able to provide you with the dates the checks were paid right?  Do you have anything from them listing the payment due dates?  If not, I'd try to sweet talk them into sending me another bill WITH the payment due date.  I'd use those to dispute the late payments with the CRAs. 

As far as having them comply with the rehab, I don't know. Maybe you should contact the original lender to find out how to proceed or who you can complain to?  Also, maybe you can try the 8004FEDAID number to talk to someone there explaining your situation and asking them how to proceed. 

If you have sent them 11 checks at once, I don't think it will be hard for anyone there to see that you thought you were entering in an agreement for a rehab.  I will try to peek around some sites to see who you can complain to. I'll post back if I find anything useful.  But I would definitely dispute the lates to the CRAs once you get check info from your bank and a bill with the due date that proves you paid on time.