Removing 120 Late Payment Account

[Adkins]

You might want to bring this to your state's attorney general's office, if they don't clear up their mess. 

[Anonymous]

Between FedLoan Servicing and University Accounting Services, I'm feeling very much like the Samson to their Goliath.  Or is the Goliath the little one?  

So according even to the Dept of Ed website, I was in forebearance or deferment for all the missed payments.  Problem stems from retroactive ones.  I was issued at least one retroactive forebearance, but they are sticking to their guns and saying they reported what was accurate *at the time*:

Sec. 463( c )(4)(A) of the HEA states that an institution "shall disclose promptly to such credit bureau organization any changes to the information previously disclosed".  They claim that it was accurate when it was reported and therefore there are no changes to be made or disclosed.  

So I'm in between a rock and a hard place.   If we were to look at the loan as it exists now, I could clearly demonstrate that I was under no obligation to make a payment, therefore could not have been late, therefore what they are reporting is inaccurate and illegal.  But I have to admit I see their point.  They reported at the time what they believed to be accurate.  

[RobertEG]

With respect to the question regarding derogs on federal Perkins loans, section 463 of the Higher Education Act is limited to requirments for Perkins loans, which establishes in subsection (c) the mandated reporting by educational institutions to consumer reporting agencies of Perkins loan basic information and monthly delinquencies and other derogs that occur.

Such reporting is also exempted from the normal credit report exclusion periods of FCRA 605(a)(4) and 605(a)(5), which relate to collections, charge-offs, and any other adverse item of information, including monthly delinquencies, until the loan is paid in full.

In recognition that credit reporting is mandatory, section 463 additionally reiterates the requirement of FCRA 623(a)(2) that the educational instution is also required to promptly update any prior reporting as necessary to maintain its current accuracy.

Thus, both the Higer Eduction Act and the FCRA stiplate that correction is required should any reporting be found to be inaccurate.

Their assertion that it will not be updated because it was accurate when reported is hogwash.  That is not the statutory mandate.

The statutory requirement refers to the currrent accuracy, and is unrelated to whether the prior reporting may have been accurate of inaccurate.  Once it has been establised that any prior reporting is inaccurate, its correction is mandated.  Period.

If you have shown that any prior reported derogs did not, in fact, occur, then both section 463 of the Higher Education Act and section 623(a)(2) of the FCRA mandate prompt correction of any prior reporting that was inaccurate, regardless of whether or not it was accurate when reported.  In your case, it appears to have been shown to not even have been accurate at the time it was reported.

If they verify the accuracy of the reported derogs in response to a dispute, you now have the right under FCRA 623(c) to bring your own civil action for lack of reasonable investigation of your dispute.  Do not initiate private civil action directly for violation of their lack of update under section 623(a)(2).  The proper basis would be violation of the reasonable investigation requirment for your dispute.

[Anonymous]

Thank you -- you've probably saved me days of headaches.