When I was younger, I moved around a lot as I searched for my first post-baccalaureate career. The post office wasn't as fast as I was, and sooner than later, I ended up with defaults on student loans....which were sold to guarantors, which were sold to collection agencies, aka Windham Professionals. I got married, had kids, and was unemployed. Then I got a great paying steady job, finally! There are no statute of limitations on student loans, no due process for wage garnishment (thankfully I'm not in that situation), and they cannot be discharged in bankruptcy.
I wanted to do the right thing, so I tracked down who owned my loan, and I called up Windham. They told me that if I made 9 consecutive payments, my loan would be magically rehabilitated, my loans would no longer be in default, and all negative items would be removed from my credit report. This was April 2008.
As of Feb, 2009, I have made 20 consecutive payments to Windham for $70 a piece. Twice per month for a total of $1400. I am continuing to make payments right now. I have not missed any. I recently called them to ask why my loan had not been rehab'ed yet. They responded that due to the "bad economy", and dried up credit market, no lenders were "available" to buy the loans back. I asked them "So I kept my end of the bargain, and you cannot keep yours?" Isn't this a breach of contract? Against the Higher Education Act? Fraud? Two weeks later they sent me a William D Ford Consolidation Application. I thought finally! It's about time! This must be the rehab lender they needed! Of course EVERY line on the form was incorrect and did not include my other student loan that I needed to consolidate. So I went to the William D Ford official gov't website and filled out a clean application and sent it back. I waited 1 month exactly.
While I'm waiting for this consolidation process to occur (4-6 months), I called up Windham again to make sure my payments would stop when the loan was bought, everything was in order, had they talked to William D Ford program officials, etc, etc.
Now they tell me that because I'm going to consolidate, all my rehab payments don't count because technically I haven't completed the program until a PRIVATE lender buys the loan. huh? They won't remove my negative items. They won't remove the defaulted status. They won't rehab the loan. They said I have 2 choices. Sign the consolidation paperwork and keep the bad credit, or HOPE AND PRAY that a PRIVATE lender buys the Rehabed loan (thus completing the program) and keep paying us in the meantime....and cancel all William D Ford Paperwork that pays them off. This seems fishy, illegal, and wrong. HELP!