scooter3079 Posted March 30, 2012 Report Share Posted March 30, 2012 Hello All. I'm currently doing a credit repair and one problem I'm facing are my student loans. My loans are federal student loans. Direct Consolidated Subsidized and Direct Consolidated Unsubsidized. They were taken out in 2001. Defered till 2003, they defaulted and I consolidated them in 2005 and again defaulted in 2006. Right now they are in collections and Allied Interstate is who is handling them. I owe about $6000. Never finished school. I'm was thinking about doing the rehab program. I called FSA and talked to them about the rehab program. She told me I had to call allied and talk to them and make so many on time payments with them and then direct loans would pick them back up and information would be completely deleted form my credit report. Is this true for one? Will they in fact delete it from my report once direct picks up the loans again? Do I need to get something in writing stating that? They are going to fall off my report in March of 2013. Should I just wait till they fall off and then rehab? I'm not sure what to do. Thanks in adavnce. Link to comment Share on other sites More sharing options...
StudLoanGuru Posted March 30, 2012 Report Share Posted March 30, 2012 The federal rehabilitation program is legit. It does everything they told you it would do (i.e. clear your credit report)As far as getting it in writing, most guarantors send out a Rehabilitation Agreement Letter, which is basically a contract stating that if you complete nine consecutive payments they will wipe it from your credit report and also put the loan in good standing again. Just make sure you keep a copy of it before you sign it and send it back, and that can serve as a contract for you as well.Government loans do not fall off credit reports. Actually, the way I should say it is that they aren't supposed to. I have seen some cases where the loans are no longer on the credit report but that was for loans twenty or more years old. The way they are intended is that if it is still an active claim, meaning the guarantor is actively claiming to your credit report that you currently have a defaulted loan, then they aren't supposed to fall off. For your situation, the rehabilitation program is your best option simply because it is the best option out there for defaulted student loans.One thing to note is that it will only repair the credit report as far as this loan goes. (i.e. default status) It will not expunge any marks from either before the loans were defaulted or before they were consolidated, but you mentioned that those occured a while back so I doubt those would be showing anyway.If your goal is to save your credit, the rehab program is the best possible option you have. My advice would be to take advantage of it. Link to comment Share on other sites More sharing options...
scooter3079 Posted March 30, 2012 Author Report Share Posted March 30, 2012 That's good news. Thank you for the advice. I'll be calling allied in the morning to set it up. Thanks again. Link to comment Share on other sites More sharing options...
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