Where are my student loans? And how do I deal with them?
February 7, 2023 3:31 PM Subscribe
My old student loans are suddenly showing up on my credit report, but I have no idea who is holding them now or how to pay them off.
So, I'm very casually thinking about buying a house, so I look at Credit Karma a few times a week. My credit score (from TransUnion) took a two hundred point nosedive. Apparently, it's from student loans I took out roughly ten years ago. I do not remember if they were state or federal loans and I don't if they are affected by the student loan pause. I did not have the funds before the pandemic to take care of them but now I could just pay them off completely. The problem is, I have no idea who to pay. It has the name of a state guaranty agency, but as far as I am aware the loans were sold off to a second and third entity after that.
So...
1) Is there a central authority that can tell you who holds your student loans?
2) Are state student loans paused or not?
3) I was going to pay half every month until the pause was over then pay off the balance. Is this a good strategy, for one's credit score?
So, I'm very casually thinking about buying a house, so I look at Credit Karma a few times a week. My credit score (from TransUnion) took a two hundred point nosedive. Apparently, it's from student loans I took out roughly ten years ago. I do not remember if they were state or federal loans and I don't if they are affected by the student loan pause. I did not have the funds before the pandemic to take care of them but now I could just pay them off completely. The problem is, I have no idea who to pay. It has the name of a state guaranty agency, but as far as I am aware the loans were sold off to a second and third entity after that.
So...
1) Is there a central authority that can tell you who holds your student loans?
2) Are state student loans paused or not?
3) I was going to pay half every month until the pause was over then pay off the balance. Is this a good strategy, for one's credit score?
I'm not sure if state student loans are actually a thing. You should go to studentaid.gov, make an account, and figure out what your loan's status actually is. From there, you can start to figure out what to do about them. If the balance is small enough that it might be forgiven, it might make sense to just hold off until the court cases around forgiveness are resolved.
posted by rockindata at 4:11 PM on February 7, 2023 [3 favorites]
posted by rockindata at 4:11 PM on February 7, 2023 [3 favorites]
Best answer: Dispute the debt with each credit reporting agency. They will have to report to you who exactly is claiming the debt.
Once you get details, send a Debt Verification Request Letter by certified mail.
posted by dum spiro spero at 4:25 PM on February 7, 2023 [2 favorites]
Once you get details, send a Debt Verification Request Letter by certified mail.
posted by dum spiro spero at 4:25 PM on February 7, 2023 [2 favorites]
You can also challenge things on your credit report.
posted by Bottlecap at 4:26 PM on February 7, 2023
posted by Bottlecap at 4:26 PM on February 7, 2023
Best answer: I'm not sure if state student loans are actually a thing.
They are. Also if the loans were FFEL loans rather than Direct, which is just barely possible given the timeline and would explain why they have a guarantee agency name associated with them, they might not turn up on studentaid.gov.
posted by praemunire at 4:51 PM on February 7, 2023 [1 favorite]
They are. Also if the loans were FFEL loans rather than Direct, which is just barely possible given the timeline and would explain why they have a guarantee agency name associated with them, they might not turn up on studentaid.gov.
posted by praemunire at 4:51 PM on February 7, 2023 [1 favorite]
Best answer: I don't know anything about state student loans, but up until last fall some federal student loans were serviced by FedLoan aka the Pennsylvania Higher Education Assistance Agency. After FedLoan's contract with the Dept of Ed ran out, all of those federal loans got transferred to MOHELA, which I am just now realizing stands for the Missouri Higher Education Loan Authority.
posted by yeahlikethat at 5:30 PM on February 7, 2023
posted by yeahlikethat at 5:30 PM on February 7, 2023
Best answer: Scammers galore. Go to studentaid.gov and get all the info. I don't think loans get sold to second and third parties. Go find out, do not pay a dime until the government tells youbwhat is up, or the state government. I have had scammers come at me from every angle about student debt, get your info.
posted by Oyéah at 6:53 PM on February 7, 2023
posted by Oyéah at 6:53 PM on February 7, 2023
Best answer: 3) I was going to pay half every month until the pause was over then pay off the balance. Is this a good strategy, for one's credit score?
I'm assuming from the 200 point drop they are appearing as a derogatory (e.g. in default, in collections)? The answer is probably different if not, and also depending on the type of derogatory. If they are in default, and are federal loans, I believe there's specific steps for repayment you can take take that can actually get the default off of your credit report (e.g. see here, and here), though as I understand it the late payment marks will remain (they have a much smaller penalty).
Absolutely figure out if there's anything like this you can take advantage of, because any derogatory on there has a 7 year clock (from the time it happened), and almost none of the normal derogatories can be removed except by waiting. (Signed, someone for whom the stupidest of derogatory marks finally just timed out, and it is a surprisingly huge relief -- but 7 years is a long time.)
posted by advil at 6:55 PM on February 7, 2023 [1 favorite]
I'm assuming from the 200 point drop they are appearing as a derogatory (e.g. in default, in collections)? The answer is probably different if not, and also depending on the type of derogatory. If they are in default, and are federal loans, I believe there's specific steps for repayment you can take take that can actually get the default off of your credit report (e.g. see here, and here), though as I understand it the late payment marks will remain (they have a much smaller penalty).
Absolutely figure out if there's anything like this you can take advantage of, because any derogatory on there has a 7 year clock (from the time it happened), and almost none of the normal derogatories can be removed except by waiting. (Signed, someone for whom the stupidest of derogatory marks finally just timed out, and it is a surprisingly huge relief -- but 7 years is a long time.)
posted by advil at 6:55 PM on February 7, 2023 [1 favorite]
I don't think loans get sold to second and third parties.
Direct Loans don't. FFELs can be, either by direct transfer between two commercial parties, or by default, which obliges one of the guarantee agencies to repurchase it, after which it can be resold.
posted by praemunire at 8:26 PM on February 7, 2023
Direct Loans don't. FFELs can be, either by direct transfer between two commercial parties, or by default, which obliges one of the guarantee agencies to repurchase it, after which it can be resold.
posted by praemunire at 8:26 PM on February 7, 2023
Best answer: National Consumer Law Center - Student Loan Assistance - Collection Actions
Studentaid.gov: How do I contact the Federal Student Aid Ombudsman Group?
CFPB Student Loan Page
Absolutely figure out if there's anything like this you can take advantage of, because any derogatory on there has a 7 year clock
Most consumer debts fall off faster, but student debt is sticky.
posted by snuffleupagus at 9:46 PM on February 7, 2023 [1 favorite]
Studentaid.gov: How do I contact the Federal Student Aid Ombudsman Group?
CFPB Student Loan Page
Absolutely figure out if there's anything like this you can take advantage of, because any derogatory on there has a 7 year clock
Most consumer debts fall off faster, but student debt is sticky.
posted by snuffleupagus at 9:46 PM on February 7, 2023 [1 favorite]
Best answer: OK, I looked it up, FFEL loans should be on NSLDS with your other loans. (I'm somewhat skeptical about the relative reliability of those records compared to Direct loans, but they should be there.)
However, if this is some weird state loan program (or a private loan), it will not be on NSLDS. But looking at NSLDS is free, if slightly annoying to set up, so no harm in checking.
If I had to guess, I'd say your loan was FFEL and got sold to another holder, who put you in collections. There are other possible scenarios, though.
posted by praemunire at 10:00 PM on February 7, 2023
However, if this is some weird state loan program (or a private loan), it will not be on NSLDS. But looking at NSLDS is free, if slightly annoying to set up, so no harm in checking.
If I had to guess, I'd say your loan was FFEL and got sold to another holder, who put you in collections. There are other possible scenarios, though.
posted by praemunire at 10:00 PM on February 7, 2023
This thread is closed to new comments.
posted by praemunire at 4:10 PM on February 7, 2023