Hey guys. Another question. After Biden's Fresh Start Inititiave and the loan forgiveness announced a few weeks ago I decided to once and for all get my student loan straight. After the full $20K forgiven, I will then have a balance of roughly $4k left to pay. These loans are dated back from 2000 through 2002 so they have long since been dropped from any of my credit reports. With me getting the green light to rehab these with my new IDR payment being only $5.00 monthly, how will these loans report if they report at all? I am confused about this entire process. If the student loans dropped off any credit report long time ago but they are now being pulled out of default and rehabbed, am I to assume that they will now report as a paying tradeline? Again, I took these out in 2000 when I received my first associates. My name has already been cleared from CAVIRS with this program and I was given a COE yesterday for a USDA 502 direct loan and will start house shopping next. But like I stated, I wanted to once and for all get all of these defaulted student loans taken care of and honestly got lucky with the fresh start program. Will they start reporting on my credit reports as 22 year old tradelines? If so, will I then get the benefit of that age of them? Will they also now show on my credit reports as $24K in loans, affecting my balances, my utilization, etc? My total defaulted loans were just over $24K. So taking $20K out of the equation from forgiveness, that leaves roughly $4K. I just sent back in my signed document agreeing to a monthly repayment plan of $5 monthly on my income. So what will happen next once these very old defaulted student loans go into rehab and get out of default? As always, thank you for any info and time to this!
Starting Score: 461
@pizzadude wrote:
@IamWesty12 wrote:Hey guys. Another question. After Biden's Fresh Start Inititiave and the loan forgiveness announced a few weeks ago I decided to once and for all get my student loan straight. After the full $20K forgiven, I will then have a balance of roughly $4k left to pay. These loans are dated back from 2000 through 2002 so they have long since been dropped from any of my credit reports. With me getting the green light to rehab these with my new IDR payment being only $5.00 monthly, how will these loans report if they report at all? I am confused about this entire process. If the student loans dropped off any credit report long time ago but they are now being pulled out of default and rehabbed, am I to assume that they will now report as a paying tradeline? Again, I took these out in 2000 when I received my first associates. My name has already been cleared from CAVIRS with this program and I was given a COE yesterday for a USDA 502 direct loan and will start house shopping next. But like I stated, I wanted to once and for all get all of these defaulted student loans taken care of and honestly got lucky with the fresh start program. Will they start reporting on my credit reports as 22 year old tradelines? If so, will I then get the benefit of that age of them? Will they also now show on my credit reports as $24K in loans, affecting my balances, my utilization, etc? My total defaulted loans were just over $24K. So taking $20K out of the equation from forgiveness, that leaves roughly $4K. I just sent back in my signed document agreeing to a monthly repayment plan of $5 monthly on my income. So what will happen next once these very old defaulted student loans go into rehab and get out of default? As always, thank you for any info and time to this!
My understanding is that the rehabbed loans will re-appear on your credit reports with their original opening date, which should help your overall AAoA assuming they're showing the early 2000s.
In terms of the balance on the loans, it will probably depend on the timing but I think the worst case is that the $24K balance would show for some period of time before your $20K forgiveness kicks in and reduces your balance to $4K.
@pizzadude thank you so much for this info. I will be very pleased if this indeed happens. Wow, that would be super helpful seeing that without these old tradelines, my oldest account is a hair under 8 years. I appreciate your help as always and thank you as well for being my spell check, lol!!!
@Mycreditjourney2020 wrote:When your loans do reappear, I'd be interested in what information they show. I rehabilitated my student loans in 2020, but they were never off my reports even though some were much older than 7 years. I did the $5.00 per month for 9 months as the rehabilitation program states. What happened then was that all the defaulted loans I had were consolidated to one lump sum and one payment with one of the student loan servicers. BUT, all the loans that were defaulted are still on my reports showing the delinquency dates/negative information.
@Mycreditjourney2020 I will def come back to update this once all is said, done and signed! For you, that doesn't seem correct reporting of those defaulted SL's but then again, I am no expert. I will keep updating as things go down.