Late Student Loans...

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protechig
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Late Student Loans...

Postby protechig » Mon Nov 16, 2015 9:50 am

Hello,

So after speaking with my Girlfriend, I found out that she didn't pay her student loan payments for several months. We then asked for forbearance, and it was granted. Now, a few weeks later, we found out that it reported on her credit card as 90-119 days late. Because there are several types of loans from the same lender it shows on her account as like 5 seriously delinquent accounts. Is there anything we can do about this, or are we screwed?

These are Federal Student Loans (http://www.myfedloan.org/).

I appreciate any help you could offer with this.

-Zach


Tubpbs
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Re: Late Student Loans...

Postby Tubpbs » Mon Nov 16, 2015 12:41 pm

First step would be to ask them if they can correct the late payments and move them off from reporting as late...
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protechig
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Re: Late Student Loans...

Postby protechig » Mon Nov 16, 2015 1:13 pm

Tubpbs wrote:First step would be to ask them if they can correct the late payments and move them off from reporting as late...


Even if they technically were late? She applied for forbearance after like 3 months, though it was granted all the way back to when she missed the payment.

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Re: Late Student Loans...

Postby Tubpbs » Mon Nov 16, 2015 1:50 pm

protechig wrote:
Tubpbs wrote:First step would be to ask them if they can correct the late payments and move them off from reporting as late...


Even if they technically were late? She applied for forbearance after like 3 months, though it was granted all the way back to when she missed the payment.



They have to be willing to work with you I would say because she was late either way, but theoretically there's no reason they wouldn't especially after giving the forebearance. Obviously, they could refuse, but that's step one in my opinion.

I would give the post some time for others to chime in who may have direct experience with this.
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Vermonster
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Re: Late Student Loans...

Postby Vermonster » Mon Nov 16, 2015 7:03 pm

With Forbearance she is pretty much screwed. If this was deferment then you would be safe. Unfortunately, she was late, so the information reported is correct. The agreement you have going forward has no impact on the reality of the past 3 months. Deferment is different as it could be proved that you were not supposed to be paying, therefor could not have been late.
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takeshi
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Re: Late Student Loans...

Postby takeshi » Tue Nov 17, 2015 7:47 am

Tubpbs wrote:First step would be to ask them if they can correct the late payments and move them off from reporting as late...

There's nothing to correct if there were lates. A goodwill request is really the only option but the creditor is under no obligation to comply.

protechig
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Re: Late Student Loans...

Postby protechig » Tue Nov 24, 2015 8:42 am

Vermonster wrote:With Forbearance she is pretty much screwed. If this was deferment then you would be safe. Unfortunately, she was late, so the information reported is correct. The agreement you have going forward has no impact on the reality of the past 3 months. Deferment is different as it could be proved that you were not supposed to be paying, therefor could not have been late.


Well that _really_ sucks. It's showing as 4 separate accounts as 90-119 days late because of how the student loans are issued (subsidized, unsubsidized over the course of two years). If the goodwill request is denied, I understand that there is nothing that we can do. Given that she has other credit cards that she is current with, how long will this have a significant impact on her score? Since this is a "serious delinquency" will this affect her for the full 7 years it stays on her report?

thanks,
Zach

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Vattené
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Re: Late Student Loans...

Postby Vattené » Tue Nov 24, 2015 10:43 am

protechig wrote:Even if they technically were late? She applied for forbearance after like 3 months, though it was granted all the way back to when she missed the payment.

Vermonster wrote:With Forbearance she is pretty much screwed. If this was deferment then you would be safe. Unfortunately, she was late, so the information reported is correct. The agreement you have going forward has no impact on the reality of the past 3 months. Deferment is different as it could be proved that you were not supposed to be paying, therefor could not have been late.

When you talk about how it was reported, do you mean that you or your girlfriend have looked at her credit reports since all this has happened? I could be wrong, but I don't think you can see they went into forbearance just from a credit report (which is what potential lenders will have).

My wife wasn't ever late with payments, but she went into forbearance while her application to be put on a different payment plan was under review (since she works in "public service," she could get a reduced payment upon approval). Statements from FedLoan show forbearance AND that she doesn't have to pay, but there is no trace of this on her credit reports. Her credit reports show deferred payment while in school, but nothing about forbearance. There is just a N/R or X during the month that it happened, and you can see that her scheduled payment amount went down afterword. I realize it's not the same situation, though, so it's not directly analogous.

The credit report is the direct source. If this is information from FedLoan, lenders won't necessarily have access to all of it - just what is reported on your credit reports themselves. If you haven't gotten them for free from annualcreditreport.com recently, I would. I just bring this up because you say forbearance was granted retroactively, so there may be hope all of the late payments don't get reported.

That said, I agree with others that FedLoan could report all the late payments and it would be accurate, giving you little recourse.


protechig wrote:Well that _really_ sucks. It's showing as 4 separate accounts as 90-119 days late because of how the student loans are issued (subsidized, unsubsidized over the course of two years). If the goodwill request is denied, I understand that there is nothing that we can do. Given that she has other credit cards that she is current with, how long will this have a significant impact on her score? Since this is a "serious delinquency" will this affect her for the full 7 years it stays on her report?

thanks,
Zach

I would expect it to have a serious impact for several years. These are multiple accounts all with 90+ lates reporting, after all. The negative impact will ease up as time goes on (assuming clean payment history going forward), but this will stick with her for a while.

It does suck, but late payments are a major risk factor no creditor is going to like seeing. It's not like hard inquiries where you can bounce back after a few months - 90+ lates are a major red flag. Worst case scenario is all late payments get reported and a goodwill request gets you nowhere, in which case all you can really do is make sure she is diligent about being squeaky clean on all credit matters going forward.
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Vermonster
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Re: Late Student Loans...

Postby Vermonster » Wed Nov 25, 2015 10:07 pm

protechig wrote:
Vermonster wrote:With Forbearance she is pretty much screwed. If this was deferment then you would be safe. Unfortunately, she was late, so the information reported is correct. The agreement you have going forward has no impact on the reality of the past 3 months. Deferment is different as it could be proved that you were not supposed to be paying, therefor could not have been late.


Well that _really_ sucks. It's showing as 4 separate accounts as 90-119 days late because of how the student loans are issued (subsidized, unsubsidized over the course of two years). If the goodwill request is denied, I understand that there is nothing that we can do. Given that she has other credit cards that she is current with, how long will this have a significant impact on her score? Since this is a "serious delinquency" will this affect her for the full 7 years it stays on her report?

thanks,
Zach


I have heard that it will only impact your scores for 5 years. It will remain on for 7-10. I am 3 years into my incorrect lates that will not be removed, despite the proof I have given them. So I can't say for sure. But it really hurts my score.
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