Dept of Ed - Settle or PIF?

[Anonymous]

I did the Credit Check Total trial and found a student loan reporting only to Transunion (oddly my highest score by far) that I had missed. I thought it had been consolidated with the others years ago.

They are offering $2900 to PIF or $2100 to SETTLE.  I know PIF always looks better than settle, but for $800?

I do want to get a mortgage next year.

I did search the forums as much as I could but can't find the answer.  Dept of Ed will not make any promises such as PFD.  Does anyone know if they usually happen to delete it or report a settlement merely as "paid" or do they always mark it negatively?  Or should I just find a way to pay the whole amount?

[RobertEG]

PFD requests are based on asking for a subjective deletion.

Government agencies are not prone to make such discriminations, so I would not expect it.

If you settle for less, requst their agreement not to report that fact to the CRA.  Again, it is discretionary, which creates a problem for government agencies to disriminate in such determinations.  All you can do is ask.

If they dont report that optional special comment, then your credit report will appear the same as if it was paid in full, and future creditors rarely if ever will question how prior debt was discharged.

[Anonymous]

ALso think that if you take the settlement that you may get a 1099-C because the forgiven debt is over 600 dollars, so it is another thing you have to worry about when it comes to tax season, so it is up to you.

[Anonymous]

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@Anonymous wrote:

ALso think that if you take the settlement that you may get a 1099-C because the forgiven debt is over 600 dollars, so it is another thing you have to worry about when it comes to tax season, so it is up to you.

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Wow, I didn't know that. Thanks for the heads up.

The person I am able to talk to on the phone says they have no control at all over how it reports because that is handled by Dept of Ed.

[RonM21]

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@Anonymous wrote:

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@Anonymous wrote:

ALso think that if you take the settlement that you may get a 1099-C because the forgiven debt is over 600 dollars, so it is another thing you have to worry about when it comes to tax season, so it is up to you.

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Wow, I didn't know that. Thanks for the heads up.

The person I am able to talk to on the phone says they have no control at all over how it reports because that is handled by Dept of Ed.

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Wow, i.didn't realize that either. It makes sense though. It's almost one of those things you wouldn't even think about.

[Anonymous]

Ok.  Will either settling or pif tomorrow cause my score to drop?

There is no options to make payments.  I can PIF, I can settle, or I can ignore it(which I won't do).

[RobertEG]

Thre could be a score impact, depending upn when they last updated their reporting.

When they update to show paid, either by way of settlement or a PIF, it effectively is viewed by FICO as also being a statement that the debt has remained delinquent up to the date of their updated reporting.  If they have updated within the last few months, it will likely have little scoring impact.  Howver, if it has been a lengthy peirod since they last updated the status to show continued delinquency, it could have a noticable impact.

Howver, paying will cease any futher updates of showing of continued and extended delinquency status.