Assuming these are federal loans, you have an “escape”, but you have to take action by December 31. If you consolidate your old loans into new loans, they’ll do a payment count adjustment for years – and you might just get forgiveness. Plus, the new Biden proposal for loan forgiveness is to automatically forgive loans 25 years or older. Finally, the new SAVE repayment plan would probably have your payment very low, or even $0. I don’t think you should keep avoiding the “beast”. You have good options to get this off your back.

The default will be removed from your credit report, but that also doesn’t eliminate the year of late payments and other issues that may have lead to the default.

If the credit bureaus haven’t updated the loan data, you should file a complaint and ask them to remove it if it’s not accurate.

I have been trying to build my credit score and noticed that my credit score dropped significantly because of my student loan and I do not understand how or why. I just think it is really odd that my credit score is suffering even though I am out of default and in good standing with my student loan. I forgot to mention that after I rehabilitatied the loan I also decided that consolidating the loan would work best for me. Would that contribute to the drop in my credit score?

My credit report is still reflecting that the loan is in collections. Any suggestions how I can take it off of my credit report?

Thank you in advance,

Maria

You can always re-consolidate the loan, or refinance. If you can afford the payoff, do that as well – ask for the latest default to be removed.