Thirteen years after graduation, Ive come across a strange situation. I graduated in 2005, consolidated my loans in 2006. My private loans were always through Sallie Mae and are paid in full. Ive been paying on my government loans and am nearly complete. I consolidated with ACS, was sent to Brazos, and now have Nelnet. All has been going without a hitch until I decided to take up my employer's offer of a full tuition grant for a Masters degree.
When I requested my transcript, I got an error that there was a hold due to Perkins loan default. I though this was obviously wrong as I have a 791 credit score, two mortgages with VA loans, and I'm a military spouse so it's not like it's very hard to find me by SSN. I went to annualcreditreport and pulled my three reports. There is no mention of a default and Sallie Mae is reported as paid in full and Nelnet as current with no missed payments.
I called the school and they said the Perkins loan was shortpaid when I consolidated by $275 and that there is a payoff amount of $542. They directed me to NSLDS to verify. I logged in there and got an error message about no identifiers being met. I contacted them and they directed me to American Student Assistance. I then went to the college's treasurer office. They said I owe no balance to the school but that I neded to contact ECSI to make he $542 payment. The College said since it was such a small amount that it was likely it was never reported.I then called the ombudsman since I was getting directed to many different companies and couldn't log in to NSLDS to verify any of this. They said they saw the balance but the Dept of Ed does not hold the loan. I called ECSI and they say that they do not have the loan either. They directed me to a collections agency.
I want to pay a debt that I owe. Especially such a small amount! If I contact them to make payment, can they somehow report it and put it on my credit? It was never there at any time. Even if it had been, wouldn't the 7 years have had it fall off or does paying renew it? I want to make it right. I want to use the $30,000+ my employer is offering, but I do not want to sacrifice the credit score I've worked so hard on! We have about 1.5 years at our current station and then will be PCS'ing again, likely to purchase another home (selling one or both of the current ones) so I don't want to riskthat as well.
Rarely does a CA start reporting a new collections after it's already been paid. The purpose of reporting is to induce payment so there's no purpose in reporting an already paid collections. Furthermore, if the default was in 2006 the 7 year and 180 day time period for reporting would have long passed (and it would be paid so the provision for reporting all unpaid Perkins student loans doesn't apply, I think).
Derogs reported on Perkins student loans are exempted under specific provisions of the Higher Education Act from the normal credit report exclusion provisions of the FCRA until the loan is paid in full. Thus, there is no 7 year exclusion provision.
The Higher Education Act also has provisions that mandate the reporting of derogs, and thus they cannot remove.
You must either convince them that there is no derog, or pay the delinquent debt and thus return the loan to the normal credit report exclusion provisions of the FCRA. The argument that the loan is paid would not apply since they are clearly now asserting that it is not.