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My Student Loan Rehab Success Story

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My Student Loan Rehab Success Story

Hi all, I have read every student loan rehab topic in this forum, and since I recently completed my student loan rehab, I thought I'd share my story as well. Hope someone finds it helpful.

 

tldr: My FICO 8 score increased 103 points, from 665 to 768, reflecting all negative student loan history being deleted.

 

I defaulted on my student loans in early 2012. In March 2019, I finally decided to face them ($140k!) & reached out to Alltran Education to apply for student loan rehab. I'd had Treasury offsets for years, but no garnishments. Once in rehab, I diligently made the 9 payments, and made my final payment in November 2019. Within 5 days of my 9th rehab payment, they were transferred back to Navient, who sent me a statement for the following month. I called Navient & confirmed my loans were again in good standing. 10 days after my last rehab payment, I logged into studentaid.ed.gov and saw my loans still said "defaulted". I submitted a "report an issue" within the FSA (Federal Student Aid) Feedback system, stating that my loans appeared in default and by the way, when were my credit reports being updated. After a few weeks of email back & forth with a pleasant Navient rep, I logged in yesterday and my derogatory student loan accounts had been completely deleted.

 

Credit Report Changes:

Before the student loan rehab, i had about 20 entries related to my student loans: 10 showed Navient transfers to Dept of Ed from 2011, and 10 from the US Dept of Ed showing 90+ day late payments every month from 2011 up to the present day. My FICO score was 665, not great but not awful, probably due to my 9yr old mortgage with zero late payments, and a car loan from 2017 with zero late payments. Other than my student loans, my credit activity has been pretty pristine (the only derogatory item left is one 30 day late payment from 2 years ago on a credit card). But the defaulted student loans definitely dragged it down and made it hard to get credit for mainstream issuers. Nothing I did could raise me above the 660's.

 

After rehab: All negative US Dept of Ed & Navient accounts on my credit reports *vanished*. Absolutely no negative history is left regarding my student loans. 10 new Navient accounts appeared, dating back to 2011, shown as current with zero late payment history. As of now, the only derogatory item on my report is the 30 day late payment mentioned above. It looks as if I never stopped paying on my student loans, and made every payment on time. Amazing.

 

Strategies:

These are the tactics I used during my student loan rehab process, which perhaps can help others.

1) I called in every monthly rehab payment, and each time confirmed with the Alltran rep that I was in compliance with the rehab process. After my 9th payment cleared, I called Alltran Education every few days until they confirmed the loans were transferred back to Navient (I was super paranoid).

2) One week after rehab was complete, I logged into studentaid.ed.gov and noticed my loans were still labeled as 'in default'. At that point I submitted a "Report an Issue" in their Feedback system, stating that my loans were inaccurately still 'defaulted' and that my credit reports were inaccurate. This appeared to trigger a formal review process which took several weeks but was very streamlined and professional. As of yesterday, all issues are resolved.

3) I learned how critical credit utilization is in scoring. Every month, I make sure my statement balance reflects a ~5% utilization of my credit limit (never more than 10%). I think this helps quite a bit.

 

Again, I'm writing this to hopefully help others on their default journey. I considered consolidation instead, but it wouldn't have erased my negative payment history, and the collection fees would've become part of my loan balance (the fees were also removed as part of the rehab). Rehab takes a very long time, but I do think it's worth it. Good luck!

Message 1 of 13
12 REPLIES 12
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Community Leader
Valued Contributor

Re: My Student Loan Rehab Success Story

Congrats!!
This is excellent information! I'll refer others to it.
I especially admire your persistence. It sounds like your strategy and hard work paid off.
And that score boost....whew! Your story will inspire many other people, I'm sure. Thank you for sharing! 🙂



Message 2 of 13
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Community Leader
Valued Contributor

Re: My Student Loan Rehab Success Story

Is you final goal to have them forgiven?



Message 3 of 13
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New Member

Re: My Student Loan Rehab Success Story

Thank you! I just hope it helps! These forums helped me a ton on my journey.
Message 4 of 13
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New Member

Re: My Student Loan Rehab Success Story

I work in finance, so there's no hope of forgiveness for me. I do want to buy a second home so i needed the defaults removed from my report. So yay. Smiley Happy
Message 5 of 13
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Senior Contributor

Re: My Student Loan Rehab Success Story

Congrats on all of that progress and your success!

And thank you very much for sharing your story/journey!


EQ: 792 | EX: 785 | TU: 781 | Accounts: 2/6 5/12 10/24
Happy practitioner of AZE6or7or8
Message 6 of 13
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New Member

Re: My Student Loan Rehab Success Story

Thank you!
Message 7 of 13
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New Member

Re: My Student Loan Rehab Success Story

Question for you,

 

Where on the studentaid.ed.gov website did you find what's the status of your student loans?? I can't seem to find it?

 

I just completed my defaulted student loan payment plan and my loans just got transferred back to Great Lakes on the 12/14/2019. Would I have to wait till my credit report updates to show that my loans are back in Good Standing??

 

CONGRATS AGAIN!!!

 


@tohellina wrote:

Hi all, I have read every student loan rehab topic in this forum, and since I recently completed my student loan rehab, I thought I'd share my story as well. Hope someone finds it helpful.

 

tldr: My FICO 8 score increased 103 points, from 665 to 768, reflecting all negative student loan history being deleted.

 

I defaulted on my student loans in early 2012. In March 2019, I finally decided to face them ($140k!) & reached out to Alltran Education to apply for student loan rehab. I'd had Treasury offsets for years, but no garnishments. Once in rehab, I diligently made the 9 payments, and made my final payment in November 2019. Within 5 days of my 9th rehab payment, they were transferred back to Navient, who sent me a statement for the following month. I called Navient & confirmed my loans were again in good standing. 10 days after my last rehab payment, I logged into studentaid.ed.gov and saw my loans still said "defaulted". I submitted a "report an issue" within the FSA (Federal Student Aid) Feedback system, stating that my loans appeared in default and by the way, when were my credit reports being updated. After a few weeks of email back & forth with a pleasant Navient rep, I logged in yesterday and my derogatory student loan accounts had been completely deleted.

 

Credit Report Changes:

Before the student loan rehab, i had about 20 entries related to my student loans: 10 showed Navient transfers to Dept of Ed from 2011, and 10 from the US Dept of Ed showing 90+ day late payments every month from 2011 up to the present day. My FICO score was 665, not great but not awful, probably due to my 9yr old mortgage with zero late payments, and a car loan from 2017 with zero late payments. Other than my student loans, my credit activity has been pretty pristine (the only derogatory item left is one 30 day late payment from 2 years ago on a credit card). But the defaulted student loans definitely dragged it down and made it hard to get credit for mainstream issuers. Nothing I did could raise me above the 660's.

 

After rehab: All negative US Dept of Ed & Navient accounts on my credit reports *vanished*. Absolutely no negative history is left regarding my student loans. 10 new Navient accounts appeared, dating back to 2011, shown as current with zero late payment history. As of now, the only derogatory item on my report is the 30 day late payment mentioned above. It looks as if I never stopped paying on my student loans, and made every payment on time. Amazing.

 

Strategies:

These are the tactics I used during my student loan rehab process, which perhaps can help others.

1) I called in every monthly rehab payment, and each time confirmed with the Alltran rep that I was in compliance with the rehab process. After my 9th payment cleared, I called Alltran Education every few days until they confirmed the loans were transferred back to Navient (I was super paranoid).

2) One week after rehab was complete, I logged into studentaid.ed.gov and noticed my loans were still labeled as 'in default'. At that point I submitted a "Report an Issue" in their Feedback system, stating that my loans were inaccurately still 'defaulted' and that my credit reports were inaccurate. This appeared to trigger a formal review process which took several weeks but was very streamlined and professional. As of yesterday, all issues are resolved.

3) I learned how critical credit utilization is in scoring. Every month, I make sure my statement balance reflects a ~5% utilization of my credit limit (never more than 10%). I think this helps quite a bit.

 

Again, I'm writing this to hopefully help others on their default journey. I considered consolidation instead, but it wouldn't have erased my negative payment history, and the collection fees would've become part of my loan balance (the fees were also removed as part of the rehab). Rehab takes a very long time, but I do think it's worth it. Good luck!


 

Message 8 of 13
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Community Leader
Valued Contributor

Re: My Student Loan Rehab Success Story

You can see the status of loans better on the National Student Loan Database (NSLDS) website, I think. The status might take a bit to update. You'll still need to make the required payments. It should be updated within the gov sites before it probably updates with the CBs but you'll have to wait and see.



Message 9 of 13
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New Member

Re: My Student Loan Rehab Success Story

The Student Aid site is fed by the student loan database. Also, i have no outstanding items. As mentioned, all updates to the database AND credit reports are complete. Thanks!
Message 10 of 13
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