Credit Repair Services

Credit Repair and Student Loans

Student loans deserve a little special attention in your credit repair effort. Student loans, unlike other forms of debt, have no statute of limitation for collection. If you have a defaulted student loan, now is the time to deal with it.

Prior to 1991 student loans could only be collected for six years. If you could hold out for six years you were in the clear. But in 1991 congress passed an amendment to the Higher U.S. Department of Education Act which lifted all time limits for collection. And to further underline the importance they placed on student loan repayment, congress made the amendment retroactive; accounts that were older than six years became collectible again.

How vulnerable are you? Well, if you have defaulted student loans you could have your wages garnished, your tax refunds seized, and your Social Security checks grabbed. The widest ranging collection powers have been granted to the U.S. Department of Education. Your student loans may be serviced by Sallie Mae, but Sallie Mae has the ability to turn over their challenging cases to the U.S. Department of Education to enforce collection.

This all sounds sort of grim, but there is some good news that can make student loan resolution a viable part of your credit repair process. In passing student loan legislation, congress was very even-handed and provided two ways for borrowers to resolve their problems in an affordable manner. The two options which will instantly stop collection activity, allow you to reduce your payment, and even reinstate your right to borrow more money are called consolidation and rehabilitation.

Both consolidation and rehabilitation paths are available for borrowers with defaulted student loans. If you choose to consolidate you will be required to make three on-time payments prior to the consolidation taking place. Rehabilitation is a little longer procedure, and will take between nine and twelve months depending on the type of loans you have, but once complete the default status will be erased from your credit report.

Regardless of the path you choose your student loan lender has been given significant leeway to make your repayment plan affordable. If you have student loan problems now is the time to work them into your credit repair program. Pick up the phone and make contact with your lender to discuss your options. And if you are in our credit repair program talk to us! We will provide the guidance you need.