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When does it fall off?

Community Leader
Legendary Contributor

Re: When does it fall off?

When you rehab a student loan, the prior reference to the loan being in default is removed.

Prior delinquency history is not.

 

Many incorrectly assume that removal of reference to "default" means removal of all reported derogs.

Unlike othe accounts, where the term "default" is used to identify any account that is delinquent, the term "default" is used with respect to federal student loans to mean a loan which has become 270+ days late.  That is approx twice the delinquency period that is normally used to required charge-off of a debt, and is a serious delinquency that also bars the student from additional federal student loans and from other loan procedures.  

 

Once you have completed the rehab requirments that apply to your type of federal student loan, the reporting of the loan as being in default is removed.  However, payment history profile reporting of monthly delinquencies is still governed by the mandatory requirements set forth within the Higher Ed Act.

Message 11 of 19
Contributor

Re: When does it fall off?

Right. I knew only default status was lifted and prior lates on original loan accounts  remained but didn't know those lates weren't subject to DOFD/ 7 years + 180 days until completely paid. 

Message 12 of 19
Regular Contributor

Re: When does it fall off?

 

I m not sure if the OP's original question given the data points got answered?

 

with given data, when does a chargeoff/rehab loan late pays fall off?

 

It helps determine removal date of chargeoff/default/rehab student loan? does it have to be federal loan? what if it was a private loan?

My FICO scores are accurate as of 2 days ago (759/785/744) with an AAOA of (2.5/3.4/3) and a total inquiry count of (11/17/13).
Message 13 of 19
Regular Contributor

Re: When does it fall off?

Okay but if the loan was transferred to another lender is it considered completely paid off?  Or, does it have to be paid off under the new lender?  Currently its listed as date of last activity 3/2012 and "transferred to another office".  

Message 14 of 19
Contributor

Re: When does it fall off?


@redE2movewrote:

Okay but if the loan was transferred to another lender is it considered completely paid off?  Or, does it have to be paid off under the new lender?  Currently its listed as date of last activity 3/2012 and "transferred to another office".  

Curious as well. Very curious. @RobertEG thoughts?


 

Message 15 of 19
Community Leader
Legendary Contributor

Re: When does it fall off?

A loan that is transferred to another creditor/servicer is not paid in full.

The debt still exists.  

The prior loan is closed. 

 

Accounts are updated to a $0 balance for two reasons.

One, they are paid, or two, they are sold/transferred to another.

A current balance of $0 on an old, closed loan does not necessarily signify paid.  It means the prior creditor no longer owns the debt.

Message 16 of 19
Regular Contributor

Re: When does it fall off?

So you're saying that lates on a previous student loan can report for as long as their is a balance on the loan.  So if the new loan holder has your loan and it will not be paid off until 2038, the old trades stay on until 2038 as well (20yrs)?  

Message 17 of 19
Community Leader
Legendary Contributor

Re: When does it fall off?

What is the type of your federal student loan?

Is it, for example,  a Perkins, Stafford, FFEL loan, or other?

The statutory exemptions under the Higher Education Act regarding exclusion of reported delinquencies does not apply to all types of federal student loans.  It can be complicated, and general statements cannot be made until the loan type and its statutory provisions as set forth in the Higher Education Act are known.

 

 

Message 18 of 19
Regular Contributor

Re: When does it fall off?

They use to read Federal Stafford Loan (Unsub & Sub) some even said Direct Sub Stafford Loan & Direct Unsub Stafford.  However, after consolidation they read DLSCNS & DLUCNS.  So, I'm not sure if they are still considered Stafford loans or not. 

Message 19 of 19