Question about process of SL Rehab//so confused

[Jon85]

Hi, everyone... please forgive me if this situation has been addressed before, but I've searched high and low and cannot find a thread or any information that's somewhat related to my situation, so if any of you could PLEASE help. 

I have 7 total federal loans... 5 of them are from Sallie Mae (or it says Sallie Mae is the servicer, Citibank is the Lender, but then it got routed back to Sallie Mae when Citibank sold or something) and the other two are from the Department of Education.

When I defaulted on the Sallie Mae loans, they got sent to the NJ Higher Education... they total $20,000 (about).

My other two loans got sent from Dept. of Ed to ATC (or something), which total $5,000.

I entered rehab for both of them with two seperate payments a month since they are from two different entitites. The DOE rehab amount is $60 a month for 9 months, while the NJ Higher Education is $150.

Now, if I make these payments for 9-10 months, I hear that negative information will be removed, but that's where I'm getting confused.

My main concern is with the 5 loans totalling $20,000 from SM because not only does SM show up on my CR, but so does the NJ Higher Education for taking over the loan I guess... f I go through rehab and am fine, does that mean ONLY NJ Higher Education gets rid of the THEIR negative information on my CR? OR does Sallie Mae ALSO get rid of their negative info/remarks and put the loan status as current? Because I keep reading how horrible Sallie Mae is... so if anyone can tell me, I'd really appreciate it.

Also, same thing with the DOE loans through ATC... is it only them who will remove their negative info since they're also on my report, or will the DOE remove theirs as well after the rehab?

I just recently starting building my credit and taking control... so please forgive the long message and newbie-like questions! 

Jon

[SCF]

Only the collection agency, in your case NJ Higher Education and ATC are required to remove their tradelines from your report when you complete rehab.  The original lender is required to remove the default status on the loan, and show it as closed and paid.  Then, the lender who takes over your loans will create new tradelines backdated to the original start date for your loans showing a positive payment history.

The DOE has a good track record of completely removing old tradelines.  I think I've read about mixed results with Sallie Mae on completely removing the old lates, and it may vary based on who picks up the loan (example: Sallie Mae buys back your loans, they seem to just report one good tradeline per loan, rather than leaving the old one, but if another lender buys it, they may just remove the default status).

It's unfortunate that there isn't more consistency on the issue, but that's the way the rehab program is defined in the law.

[Jon85]

Thank you so much for your reply

Yeah, it is a bit unfortunate that there is an inconsistency, but you know, I'm happy that worse case scenario they'll atleast report the default status as current you know? That should help a little bit regardless...At the end of the day, it is my fault obviously... my loans were only $20000 (now 25K because of interest) which could have been manageable for me, but I was young and stupid...

So that rehab is going to take 10 months, and while doing that I'll be reducing my debt in the meantime and paying off a few other CAs and hopefully in a year or two I can see some sort of increase.