Paying off a student loan - what are we forgetting?
March 20, 2014 8:42 AM   Subscribe

I have a student loan with Florida Department of Education, the flakiest loan servicer in the world. We want to be sure we do everything right as we pay off this debt.

We're paying it off for a number of reasons not least of which is the fact that they regularly do not record our payments (which are sent in by our bank with records of on-time mailing and receipt by FL DOE) and send us (and the credit agencies) notices of late payment.

We contacted them and have received a settlement in full offer in writing. I have gathered the money necessary to pay it.

They stated the full amount required and the due date.

They stated that once the funds are posted a paid-in-full letter will be provided within 45 days. They also stated that after the loan is paid in full the Department will notify nationwide consumer reporting agencies to update the status of my loan to "paid collection account" (yes, our loan was in arrears for 18 months because I was an idiot when I was 22).

Is there anything else I should make sure I get from them or anything else I should do to protect myself? My goal is to a) never hear from these FL DOE idiots again b) have my student loan firmly behind me c) improve my credit so that I can consider buying a house in a few years.

Thanks for any advice, these guys don't seem shady, just incompetent but both are equally difficult to work with.
posted by stewiethegreat to Work & Money (4 answers total)
Response by poster: Oh, and one more fun add-on. Our deadline for payment in full had been Month Day, but we'd actually requested Month Day+2. I just called back and they said "Oh, that's fine, we can do that." I asked for it in writing and they sent back our original offer letter along with an email statement:

Per our conversation DATE TIME, you are approved for an extension on your settlement offer until MONTH DAY+2. Please be advised that the system is noted and if payment is not made by MONTH DAY+2 the SIF will be null and void.

Is that good enough? Or do we need to get them to revise their letter and send it to us officially?
posted by stewiethegreat at 8:49 AM on March 20, 2014

I don't know the laws in Florida, but if they notified credit agencies of late payment when your payment was on time and then would not reverse it after providing proof, it is probably worth discussing this with an attorney for a potential consumer fraud case.
posted by unreasonable at 9:49 AM on March 20, 2014

Sounds good.

Of course, IANAL and TINLA, and I've never had a debt go into collections.

Try to find out the name and address of the collections company used by FL DOE. Keep in mind that if it went unpaid for a year and a half, that company may have sold the debt to another company, and another, and so on and so forth. Try and get names, addresses, and phone numbers of ALL involved collection companies.

You'll want to save these letters, as well as your own proof of payment (such as an electronic copy of the check or the transaction record from your bank account -- something you can print out if you need to fight this later).

Make sure you get the paid-in-full letter within the stated 45 days, and save it, again, in case you need to fight this later. If not, I'd be on the phone to Florida DOE at 8:00 AM on Day #46 to find out why you didn't get it.

Once you get that paid-in-full letter, I'd proactively call Equifax, Experian, and TransUnion to make sure the account is properly noted. Get a credit report 6 months after you get the paid-in-full letter, and make sure it says "paid collection account" per the written agreements you already have from them. If not, you can request to have the record corrected at each of the three credit reporting agencies, using that letter, your record of transaction, and a copy of your paid-in-full letter as proof that it will have been FL DOE's screw-up, not yours.

Make sure (with the credit reporting agencies) that the collection actions from ALL associated collections agencies are cleared up as "paid collections account" as well.

In general, black marks on your credit report such as this one stay there for 7 years. That's 7 years from the date printed on your paid-in-full letter. Of course, a paid account looks better than a charge-off. And something that happened 6 years ago while you otherwise maintained good credit looks better to a mortgage company than something that happened yesterday. But keep that 7 year time frame in mind when you're shopping for a house/mortgage.
posted by tckma at 9:55 AM on March 20, 2014 [1 favorite]

Agree on saving all letters from the servicer and any debt collection agencies. I'd also recommend collecting and saving all records of YOUR communication with the various companies, and your bank, regarding the loan. Having a record of the servicer's flakiness might not sway collection agencies but it could provide leverage if you have any trouble with the servicer itself down the road.

I had a similar situation many years ago with a servicer and resolved it by sending copies of the voluminous correspondence I'd had with them to the FTC, BBB, and state attorneys general. None of those entities ultimately had to get involved; just letting the servicer know that their documented flakiness was now in the inboxes of state and federal officials was sufficient.
posted by helpthebear at 12:37 PM on March 20, 2014

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