Hi Mike:
Just for clarification. These were federal student loans? Are they still with the same lender? (From your post it sounds like the answer to both of these are yes, but I just wanted to clarify).
Though I have not had any personal experience with the rehabilitation program, from what I've read, they do create a "new loan" once the old one has been rehabilitated. I think this is basically a technicalility so that they can stop reporting that "bad" loan on your credit and just start reporting on the "new good" loan. Yes, I would certainly call them. To let them know that your loan was rehabilitated yet the old one is still showing on your credit. I would ask if they could move that old loan to a zero balance (which it should be) and also remove it from your credit report.
Oh, one more thing that I thought of before I hit post... You did not consolidate these loans while they were defaulted did you? These 2 loans are strickly the loans that you had rehabilitated? The reason I ask is because if your loans were in default and you got a new consolidation loan and included them, then your credit report is correct (except for it not showing a zero balance on the old loan).
Current Score: Eq: 823 Tu: 830Let us know what they say and which lender. Other's may have had experience with your specific lender that may be able to help. Good luck.
@kittylover wrote:I have the same thing going on. The old ones were supposed to be removed as part of the rehabilitation processs. Several have not. In addition, a couple of the new loans are still showing the old past dues even though the report from the new company also records no late payments. Don't care about the two old ones much any more since they should come off in Nov. but am beyond frustrated by the other. Hard to know who I could call as the loans have changed hands a couple of times. I just file a dispute with the agencies, but I doubt they can/will help. Oh well, my credit score is coming back up in spite of them. Would love to know what else I can do if anyone has ideas. Apparently this is quite common.
Call whoever is reporting the baddies on your credit report. Along with the loan, it should tell you which company is reporting it. Then you can ask them to correct it as the loan has been rehabilitated. They may ask for proof of this, which is fine as you should be able to provide it.
As I have found out the hard way, there's very tricky wording in the Higher Education Act.
Even on the Ed.gov site listed here, it states: "If you want the negative credit report made by the Department removed, you must successfully complete our loan rehabilitation program." Sure makes you think that if you rehabilitate your defaulted loans, that they'll REMOVE THE NEGATIVE CREDIT REPORT made by the Department.
Nope.
Upon further investigation, you'll find that they will remove the default status of the loan. However, the status will be changed to "paid by insurance claim" and all late payments will remain.
I'm currently working/battling with the Department of Education on this. They agree that the intent is to expunge any indication in your credit report of a "default" claim. They also said that "any notation of an account being transferred or an insurance claim having been filed and paid EQUALS a default claim notation, and should be removed".
I'm working with the ombudsman office at the DOE to get the DOE to live up to their promise and statements. The best I can hope for is to get the notations having to do with transfers and insurance claims being paid removed. Late payments will remain on the CR.
BOTTOM LINE: I believe that the statements and promises made by the DOE (such as the one I listed at the top of this post) are misleading and disingenuous. The negative credit report made by the Department is NOT removed when you rehab your loans, nor is it their intention to do so. They should not be allowed to promote rehabilitation in such a deceptive manner. This is simply wrong.
@gamegrrl wrote:As I have found out the hard way, there's very tricky wording in the Higher Education Act.
Even on the Ed.gov site listed here, it states: "If you want the negative credit report made by the Department removed, you must successfully complete our loan rehabilitation program." Sure makes you think that if you rehabilitate your defaulted loans, that they'll REMOVE THE NEGATIVE CREDIT REPORT made by the Department.
Nope.
Upon further investigation, you'll find that they will remove the default status of the loan. However, the status will be changed to "paid by insurance claim" and all late payments will remain.
I'm currently working/battling with the Department of Education on this. They agree that the intent is to expunge any indication in your credit report of a "default" claim. They also said that "any notation of an account being transferred or an insurance claim having been filed and paid EQUALS a default claim notation, and should be removed".
I'm working with the ombudsman office at the DOE to get the DOE to live up to their promise and statements. The best I can hope for is to get the notations having to do with transfers and insurance claims being paid removed. Late payments will remain on the CR.
BOTTOM LINE: I believe that the statements and promises made by the DOE (such as the one I listed at the top of this post) are misleading and disingenuous. The negative credit report made by the Department is NOT removed when you rehab your loans, nor is it their intention to do so. They should not be allowed to promote rehabilitation in such a deceptive manner. This is simply wrong.
Where are you getting this information? Can you provide the link. One part says after rehabilitation the loan status would be changed to "paid by insurance claim". That doesn't make sense. An insurance claim in paid out after an extended period of time of default where the lender see no hope of receiving payment back from the original lender, so a claim is filed with the government (the insurance of a student loan). Thanks.
Hi Tazman81,
I included links for everything I have. The point I'm trying to make is that the Ed.gov site (link included below to the specific site page) says "if you want the negative credit report made by the Department removed...", even though that is not what happens, nor is it what's actually written into the Higher Education Act.
I have two student loans that I defaulted on and that were paid by insurance. I rehabilitated both of those loans a few years ago and have never been late with a payment. Based on the Ed.gov site quote in the paragraph above, I really thought that the "negative credit report" would be removed once I had rehabilitated the loan, but that hasn't happened.
The notations "transferred and Insurance claim filed and paid" still appear on my defaulted loans in my credit report. I understand that the notations of my late payments will, rightfully, remain on the record for those defaulted loans. What I don't understand is why the "negative credit report made by the Department" has never been removed, as was promised would happen on the Ed.gov site, once these loans were successfully rehabilitated.
The Ed.gov ombudsman office agrees with me, and has told me over the phone that "any reference to the default of the loans should be removed, and that includes notations or comments that the account was transferred and/or and insurance claim was filed and/or paid."
My beef is that once you've followed their rules and guidelines for loan rehabilitation, the promised benefits should happen without your having to fight for it for years.
Sorry I wasn't more clear in my first post.