Student Loan Rehab Completed Last Year CR shows collection account?

Hi everyone,

I pulled my credit report before applying for a new car loan. I needed some assistnace with my PHEAA student loan.

I defaulted on this loan in 2006 and completed the rehabilitation program to remove it from default status. I recieved paperwork stating the loan was rehabilitated and I dind't pay much attention to actually checking my credit report to verify it.

After the loan was rehabilitated, I couldn't afford the payment so I applied and was approved for a consolidation. I have never missed a payment since colsolidating

However, my credit report has the new consolidation loan listed, but the origina PHEAA defaulted loan is listed, with a $0 balance but Current STatus: Collection Account
Additional Information: Collection Account, Student Loan assigned to governemnt

Is that the correct status? I thought this was to be removed after a rehabilitation?

Yes that status correct. Under rehab, only your guarantors tradeline is removed....the original lender remains.

I'm confused.. nothing was removed. My loan was through PHEAA????

PHEAA is a lender...not sure who your guarantor was. Lenders tradelines are not removed.

thanks.. how much damage is this status doing to my credit report?

It will do some damage but it is a zero balance.

I have a school loan, as well. However....it's in 'good standing'. My friend has a school loan that is in 'default'. I've never heard of a Student Loan Rehab Program. Can someone give me some information on this, so I can pass it on to my friend? Thanks.

If you are in default, and call to setup arrangements with the student loan company and make 9 consecutive on-time payments... they will consider it rehabbed and remove the default status from the credit reports. You MUST make 9 consecutive payments though....

Crystal...a loan is not considered "rehabbed" just because you make 9 payments. A lender must pay off your guarantor for the rehab to be completed....and it could take more than 9 payments for this to happen.