Consolidating Defaulted Student Loans

I have seen a lot of people worrying about defaulted loans.

You can consolidate a defaulted student loan and get it back into good status.

It is relatively easy and does not require much work at all.

http://loanconsolidation.ed.gov/

this is the website..everything can be done online....even your signature.

All you need to know is who holds the loan at that time.. so even though a CA has it.. you contact the Dept of Edu for the loan amount.

Its easy and painless.

Hope this helps everyone

[tryingtodigout]

I actually checked this website today to consolidate defaulted loans but I did not know who was holding the loan. Dept Of Ed directed me to call 1800-433-3243 to find out who was holding it. This number is to Federal Student Aid and they can tell you who is currently holding your loan. The DOE also said the loans have to be federal and not private.

The website is:
http://studentaid.ed.gov/PORTALSWebA...lish/index.jsp
Use the repaying tab at the top of the page.

I believe this is the actual area that will give you all the info on your loans:
www.nslds.ed.gov

You also need a pin to access some info on this website. Here is the site that can help you with that. You can have the pin sent to you via email instead of snail mail if you wish.
http://www.pin.ed.gov/PINWebApp/pinindex.jsp

I hope this info helps as well.

[Anisah_H]

Thanks for this, I didn't know you could consolidate defaulted loans. I thought it had to be paid for a year before that.

[wemeannoharmtoyourplanet]

you also need an employer or a telephone

[Quadcam79]

that was worth the price of admission right there !!!.
I have 4 direct loans and 1 FFELP loan that I'm trying to get caught up on, I had no idea you could consolidate defaulted student loans. I'm all over that, of course i try and use the consolidation site and it's down for maintnence

[newstudent]

I got my student loan consolidate recently and it helped me out a lot with my payments. I hope I can get my loan fully paid off by the end of the year so I can live debt free.

[PolarBearnCO]

Congrats and good luck. You must either have a ton of extra money or a very small loan.

If I worked 15 hours overtime a week, I'd still be looking at 4 years until debt-free, which includes the car. I'm not terribly worried about the student loans.

It makes little sense to pay them off early, since the interest paid is tax deductible, regardless how you file. 7% turns into 4.62% with the tax deduction. And, anyone with access to the internet should be able to earn 7+% on their savings. Most calculators will suggest you save instead of pay off debt if you can earn at least what you'd be paying in interest. Shoot, even the G Fund in the TSP has been earning at least 4.5%, before taxes, which is probably about 6.0% effective, when compared to a pre-tax savings of the same rate.

Of course, the plus side is more disposable income (today's money, less in tomorrow's money) and the nice fact that you'd be debt free. Of course #2, few of us ever are debt free. As soon as we pay off a debt, we create a new one.

In my current situation, I could live off $1200/mo after tax without any debt. As it is now, I need an extra $1K to pay off debts.

[direred]

Originally Posted by PolarBearnCO

If I worked 15 hours overtime a week, I'd still be looking at 4 years until debt-free, which includes the car. I'm not terribly worried about the student loans.

If I worked 15 hours OT a week, were paid for overtime, and weren't taxed on that amount, it'd take me five years to get out of student loan debt alone.

[deltron3030]

Thank you for this advice. NCO had my defaulted student loans, they would not negotiate a payment solution that I could afford and instead began wage garnishment. They told me that in order to get out of this debt that I had to use all my available credit, including credit cards, taking out a loan, begging my parents... They harassed, made threats to my mother, called me at work, called my coworkers (even after they received written request to stop such behavior).

Long story short, I thought all was lost and then I found this post and I was able to rehabilitate the loans. I can now afford monthly payments, my interest was even reduced. Thank you so much, you may have just saved my life or at least the quality of it. I honestly can't thank this forum enough and to the people specifically related to this post.

[direred]

Originally Posted by deltron3030

Long story short, I thought all was lost and then I found this post and I was able to rehabilitate the loans. I can now afford monthly payments, my interest was even reduced. Thank you so much, you may have just saved my life or at least the quality of it. I honestly can't thank this forum enough and to the people specifically related to this post.

I'm so glad to hear that!

(I need to pay off my loans.)

[PolarBearnCO]

I just want to pay off my loans before my future kids start racking up theirs. Kids at least two years away, so I have 20 years to pay them off. I'm 1 year into a 20 yr repayment. Sheesh, that sounds like a long time.

[LeslieR]

OK, so once you consolidate defaulted loans (it IS very easy, and NCO ARE jerks about it -- however, I do believe they are the ones who gave me the info on the lender that ultimately bought and consolidated my loans):

Is there a way to deal with the government and Sallie Mae to get all those negatives off from the old defaulted loans?? Anyone have experience or luck with this?

[jamesjoseph88]

i currently have 4 loans in default $175k, $24 k,$22k $20k so needless to say pmts are huge... Its the only thing left on my file holding my score down.. I applied and am waiting to see what happens
Thx for tip

[PolarBearnCO]

Originally Posted by LeslieR

Is there a way to deal with the government and Sallie Mae to get all those negatives off from the old defaulted loans?? Anyone have experience or luck with this?

Waiting 7 years from the day they defaulted is the only way to get student loan default negatives off a CR. The lenders take this pretty seriously, as they are required to by regulation.

[klchicago]

Originally Posted by tryingtodigout

I actually checked this website today to consolidate defaulted loans but I did not know who was holding the loan. Dept Of Ed directed me to call 1800-433-3243 to find out who was holding it. This number is to Federal Student Aid and they can tell you who is currently holding your loan. The DOE also said the loans have to be federal and not private.

The website is:
http://studentaid.ed.gov/PORTALSWebA...lish/index.jsp
Use the repaying tab at the top of the page.

I believe this is the actual area that will give you all the info on your loans:
www.nslds.ed.gov

You also need a pin to access some info on this website. Here is the site that can help you with that. You can have the pin sent to you via email instead of snail mail if you wish.
http://www.pin.ed.gov/PINWebApp/pinindex.jsp

I hope this info helps as well.

Thanks for sharing this! I also wanted to add my situation in case anyone was in the same boat as me. I defaulted on my loans a few years ago. Loan was sent to CA by the name of Van Ru. I agreed to pay for 12 months and the loan would be rehabbed. I did but moved soon after and never followed up on it (stupid me!). I haven't heard from Van Ru since last Sept. and when I now look at my CRs they all show past due since March of 2007. So basically, I had no idea if my loan was still with Van Ru or with Direct Loans.

If you dont know who has your loan (you need to know to fill out the consolidation app), you can ask for the Borrower Tracking Department when you call the number above and they will tell you. You will also need to know your PIN # and this number provides that as well.

You can also call Direct Loan Consolidation directly at (800)557-7392.

To find out the status of your Direct Loan, arrange payment options, update mailing address and phone number, etc., you can call the Direct Loan Servicing Center at (800)848-0979. Oh, and they are available M-F, 8a - 8:30p EST.

Hope this helps anyone looking for Direct Loan info.

[spunk999]

Thank you - I filled out an application here so I'll let you know what happens - seems to good to be true if you can really consolidate default student loans - I filled out the form so we'll see!

Thanks!!

[spunk999]

As I was researching options for my student loans, I found this link:

http://creditboards.com/forums/lofiv...p/t293800.html

I have a pending application for loan consolidation for my defaulted student loans, and I also have the option to rehab - the rehab option did confirm that they would delete the old loans from my credit - does anyone know if I go the consolidation route right off the bat, would that be worse for my credit than rehab? I was thinking if so, I would go the rehab route, even though my payments would be higher - I am a little confused on which option to choose as I want to do what would be best for my credit over the long term - any help or advice would be appreciated - thanks!

[LynnInMN]

Originally Posted by spunk999

Thank you - I filled out an application here so I'll let you know what happens - seems to good to be true if you can really consolidate default student loans - I filled out the form so we'll see!

Thanks!!

There is nothing "we'll see" about the consolidation of defaults. When I was collecting I assists 1000's of borrowers with consolidating their defaults. That option as been available probably for about 14 years if not longer!!

[spunk999]

It must be a well kept secret because the collectors were having me believe I had no other options - I am so thankful for this forum.

Does anyone know about how both options affect credit reports as in my previous post on this thread?

Thanks!!

[LeslieR]

Originally Posted by spunk999

It must be a well kept secret because the collectors were having me believe I had no other options - I am so thankful for this forum.

Does anyone know about how both options affect credit reports as in my previous post on this thread?

Thanks!!

In my experience, Spunk, student loan collections and defaults take a big hit on your scores. I think that adding to my problem is that I had SO MANY loans so it was SO MANY negatives. I was in graduate school two years for one degree and four for another, and got a new set of loans every term (semesters for two and quarters for four). Each term there were sub and unsub. All of these are reported individually until you consolidate, so any problems get reported x the number of loans you had. Then you have the problem of the loan holder, guarantor, and government all reporting them. I had about 12 pages of loans alone reporting. It was a huge mess that I still cannot fathom letting happen. And I was supposed to be the educated one

Their impact lessens as they age.

I did not know enough, nor did I still have paperwork, to even recognize whether there were any errors in reporting. I disputed them all when I started my repair and several errors -dates, amounts - were corrected in my favor.

The collectors do not care whether you consolidate or not - they want you in the rehab program because that's how they get their money. Period. NCO collected on mine and they were awful. I don't think it was until after I entered rehab and talked to Direct Loans (US Dept of Ed) did I find out I could consolidate. They referred me to what was then Suntech (now Chase) who bought all my loans, consolidated them, and gave me an outstanding interest rate (i'm down to 2.80% after 36 on time payments and auto payment discounts). AND the interim US Dept of Ed loan that Suntech bought reports as a positive "paid as agreed" tradeline!

FWIW...