Many women do not consider the importance of credit when contemplating returning to school, and in all honesty I was of the same mind frame. It’s a well known fact that the single easiest piece of credit to obtain is a student loan. Couple that with a no credit check policy to be accepted to college then it seems silly to worry about their past credit history.
This is what leads me to this cautionary tale. I had already completed a year and a half worth of college before taking an extended leave. I did everything I was supposed to in regards to my students loans such as forbearance or deferment, or whatever the situation called for to remain in good standing. After several years I gave little thought to the loans except when it was time to renew their deferral status.
Fast forward 7 long years and I’d decided it was time to finish what I started. I figured that filling out all of the paperwork I needed was going to be a piece of cake, and I’d be back in school in no time. Wrong. I completed my FAFSA only to be notified that I had a hold on my file. I called the 800 number with deferment letters in hand ready to prove that whatever the reason for the hold, there must have been some kind of mistake.
After two hours on hold I found that the mistake was in fact mine. Many moms wishing to return to college have experienced this very error. Your 19 or 20 years old, and you think you’re on top of all of your school business, but in fact you barely know what was in your financial aid package to begin with. You failed to notice that one of your loans was actually underwritten by the school so that when you went to forebear or defer, it was not included with your unsubsidized and subsidized Federal loans. You have just been stricken by the Federal Perkin’s Loan Curse.
Wait but it says Federal Perkins Loan, how can it not be included? Well this is the one loan that is administered by the actual college you are attending and is not administered by the banks who hold the promissory to your Stafford loans. So while the funds originate from Federal dollars they are “cared” for by the university.
This certainly would have been handy to know when I left school, as I wouldn’t have ended up with a $4200 loan default and a collection on my credit report. There was no way I could muster up that kind of money in short order and get back to school, and I know many of you may be in the same unfortunate situation. My account had been moved to a collection agency and here where the solution and single piece of advice you should take from my story, call the collection agency. We never want to deal with them but issues like these never resolve themselves.
The person I spoke with was very helpful and provided me with a solution that took care of both paying the collection off and removing my FAFSA status from being in default. By consolidating my student loans with Direct Loans, I was able to bring everything current and lift the hold on my account. Some people ask me why not just start over, and my answer is twofold.
1. Firstly, you don’t want to lose the credit hours you’ve accumulated previously even if your grades weren’t the greatest. The school that holds your Perkins loan will not release your transcripts without that debt being settled.
2. If you’ve attended a university I can’t think of a single school that is not going to want to review you previous transcripts.
3. You will not be ineligible to receive any federal aid in the form of college grants for single mothers, or any federally subsidized loans towards your tuition until the defaulted student loan is repaid.
So with a simple call to Direct Loans and filling out a quick form on their website, you can bring yourself current and get back in school. Remember to call the agency holding your collections as they have many tricks up their sleeves to help you get that debt taken care of as they want to close that account and receive the fees due to them. If this is your second time around the college tree, take your loan lessons to heart and avoid them if you can by finding scholarships for moms that will help you pay your way through school/
