Sometimes, the worst happens.
Like failing to pay your bills. Or defaulting on a federal student loan.
Rest assured, the government will eventually get their money. But there are things you can do to make the process more pleasant.
Fortunately, we’ve discovered the magic number to cut through all the red tape and get down to brass tax.
What’s the magic number?
The Department of Education Default Resolution Group is your best resource to help answer the question everyone should, but no one seems to, know; “Who is servicing the loan?”
They can be reached at 1-800-621-3115 (TTY: 1-877-825-9923) or by email.
If you pursue the phone option you will be able to speak with an actual human (imagine that!) if you simply refrain from entering your social security number right away and hold for a short period. This person should be able to tell you which company is servicing your student loans as well as exactly who you should call if you’re interested in rehabbing or consolidating them.
Rehabbing vs. Consolidating Those Student Loans
- Rehabbing – Slow & Steady: This process is will take 9 months assuming you never miss a payment. If you do happen to miss a payment, the 9-month countdown clock completely resets. Also, you must sign a contract with the Department of Education. This option has its drawbacks but at the end of the day it will turn your collections into accounts in good standing and ultimately boost your scores immensely.
- Consolidating – Quick & Not So Painless: Admittedly a 90-day time frame has a certain mass appeal. However, you’ll be left with paid collections that will initially drop your credit score. Sure, it will raise over time but those paid collections have the potential to stick around for years!
Making the Right Choice
Both options have their pros and cons. The decision ultimately comes down to you. So, give DEDR a call, find out exactly who is servicing your loan, evaluate your short and long-term goals, and get your credit back on track!