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I had a few federal loans (Stafford and Perkins) from Navient (Sallie Mae) that are being serviced by American Student Assistance. They were consolidated into an FFEL and were defaulted because I moved overseas and the bank account they were being paid from got closed.
I want to pay them and rebuild my credit. What is the best course of action here? Should I apply for a consolidation and just pay the loan?
Get on the National Student Loan Data System and figure out who currently holds your loans and their contact information. You can choose between consolidation or rehab as a way to consolidate the default - and you set up either solution with the collection agency or agencies that currently holds your loans. Consolidation will get your loans back into good standing quickly, but lacks the benefits of rehab.
If you make the 9 months of rehab payments your new loan tradeline will be backdated to the original open date of your loan, which can boost your AAoA, the collection costs on the loan will also be reduced, so you will save some money overall.
Looked deeper into my loans and here are the details:
I have a federal FFEL consolidated loan that is being collected by American Student Assistance and FH Cann (collection agency):
Current Servicer: NAVIENT SOLUTIONS, INC.
Current Lender: DEUTSCHE BANK ELT NAVIENT & SLM TRUSTS
Current Guaranty Agency: AMERICAN STUDENT ASSISTANCE
Disbursement Date: 11/24/2006
Disbursement Amount: $8,577
Loan Status: DEFAULTED, UNRESOLVED
Effective Date: 03/03/2014
Outstanding Principal Balance: $6,840
Outstanding Interest Balance: $869
Type of Loan: FFEL CONSOLIDATED
On my credit report I have all 3 bureaus reporting this:
AMER. STUDENT ASSISTANT CORP.
Account Type: Installment
Account Number: DEUTSCHE -103XXXX
Payment Responsibility: Individual
Date Opened:
Balance Date: 02/2016
Balance Amount: $9,141
Monthly Payment: $0
High/Limit: $6,840
Account Status: Collection
Past Due Amount: $9,141
Comments: COLLECTION ACCOUNT STUDENT LOAN
SALLIE MAE
Account Type: Installment
Account Number: 9769634054100062XXXX
Payment Responsibility: Individual
Date Opened: 11/2006
Balance Date: 03/2014
Balance Amount: $0
High/Limit: $8,576
Account Status: Late Over 120 Days
Past Due Amount: $0
Comments: LAST REPORTED DELINQUENCIES: 02/2014=I5,01/2014=I5,12/2013=I5 STUDENT LOAN ASSIGNED TO GOVERNMENT ACCOUNT TRANSFERRED OR SOLD
I also have a private loan that is from Navient:
NAVIENT SOLUTIONS
Account Type: Installment
Account Number: 502935046705XXXX
Payment Responsibility: Joint Contractual Liability
Date Opened: 09/2005
Balance Date: 02/2016
Balance Amount: $10,350
Monthly Payment: $117
High/Limit: $9,964
Account Status: Collection Late Over 120 Days
Past Due Amount: $2,118
Comments: LAST REPORTED DELINQUENCIES: 03/2015=I5,02/2015=I5,01/2015=I5 CHARGED OFF ACCOUNT STUDENT LOAN
Just an update.
I canceled my application process to consolidate on studentloans.gov to try and rehab my FFEL consolidated loan with FH Cann/American Student Assistance. If I rehab this loan will they be able to remove the lates on the Sallie Mae trade line also?
For my private loan with Navient, they offered a settlement of 50%. I am holding out for a lower settlement and for them to agree in writing that they will remove the lates or the trade line completely.
Thanks.
When you complete your rehab, any remarks and account status relating to the default is required to be removed from the rehab'd tradelines. Unfortunately, this does not include the actual late payment marks that led up to the default. Some lenders will remove these remarks (or the old tradeline entirely), and if they don't, the lates will age off and disappear completely at 7 to 7.5 years.