Hi all,

I just had a quick question.  My husband was just defaulted on his National Student Loan and sent to HRDC collections, where he says he was told that there was no specific amount to be repaid each month, just that we should pay what we can, when we can.  I was wondering whether this was a common scenario, as I was expecting that we would have to arrange some sort of repayment schedule.  He wasn't sure why we were told that.

Thanks.

 Open-Ended means that a specific item has special terms set forth. "Open-ended" items on a credit report are rated with the letter "O". The old guaranteed CSLP, for instance. CSL accounts were written as bank loans with comments like "loan in default - paid by government guarantor". The actual rating for these stayed as "O5". The bank risk loans remained rated withthe letter "I" - which means "fixed-term".

 Open-ended items, in standard credit terms, could be best described as an account with a 30-day payment in full demand, hence the term "demand note or loan". So, Amex charge accounts with 30 day full payment requirements, some Gas Cards (Esso, Ultramar, etc), Overdraft accounts are all considered this.

You needn't worry about your credit rating if HRDC holds your guarnteed portion of your CSL. HRDC does not report defaulted CSL to either Equifax or Transunion.

However, you should endeavour to pay whatever you can right now.

Coffee

Eshelton,

That's funny....my guaranteed portion of my CSL went into default in 2001 and I have ordered credit files from both Equifax and Transunion. Not so much as a bleep on the radar.

Maybe you have an older CSL.

The inconsistencies are not surprising....

Eshelton,

My CSL with HRDC is defaulted and on my credit report as well.  My loan is an older one.

Kwel, E-Shel:

On your credit report, who is showing as the lender on the guaranteed portion of your CSL.

On my credit report, the non guaranteed portion held by RBC shows as an I9. Nothing at all from HRDC.....

Coffee,

The lender is shown as "GOVERNMENT STUDENT LOANS" 888-815-4514.  Balance is $0.  Loan in default.

Wonder when HRDC decided to cease reporting to the credit bureaus?

I have friends in the same situation as I and they show no blemishes on their credit report in spite of the fact that they owe guaranteedd portion of their CSL to HRDC.

Maybe Johnny can explain....

Coffee,

The lender is shown as the Royal Bank, phone # last reported in 10/03 rating the installment account as I9, meaning a bad debt, collection account or unable to locate.  Balance $16,000. That's what the report reads.

 Kwelmm,

 The loan you are describing is nothing but a RBC risk student loan (federal or provincial). These ugly things rate just like a regular consumer debt, unfortunately.

 "I9" means "fixed term" or a loan with a set term with installments. The 9 speaks for itself.

 Coffee,

 Federal guaranteed, or what is called "Federal Direct" loans are the newest wave of typical government loans. It is now an "integrated" lending system and strategy. The credit reporting is different now with these new type(s). Banks are not so involved anymore as well all know, so there will be less destructive patterns reflecting when a default occurs. Federal and Provincial loans may still reflect on a report depending on the disposition of the debt.

 If you were privy to what I see every day, the destructive patterns relevent to credit reporting are a direct link to the way the banks report risk student loans. These are the credit killers in most part when defaulted.

 Here is another statistic that will raise brows...

 The default rate in Canada is slightly more than 25%. The default rate in the United states is less than 10%.

 The United states has a very valuable act that assists sutdent borrowers which is called the "Rehabilitation Act". Together with this act, the FDPCA adds a wonderful flavor to the variety of "assistance cocktails" that the USA provides it's people.

 Johnny

Johnny,

Part of that loan is with the HRDC--other part with Royal (NCO collections).  The report does not distinguish between this.

 Kwelmm,

 Anything to do with your Guaranteed CSL on the report is rated "O", not "I". For instance, the credit reporting directive stipulates that guaranteed loans that are defaulted will be rated as "O5" when they subrogation process is finalized.

 A guaranteed CSL will reflect this reporting (ver-batum):

 RBC Student Loan - loan in default - paid by government guarantor. Balance is zero. Rating is O5.

 The part that is with HRDC would reflect this remark in your credit file. The other part is the federal risk portion which the RBC has sole onus to collect on their own. There is no govenrment intervention or Crowning process.

 Now, if you do not see anything on your report that reflects "Loan in default, paid by government guarantor - O5 rated, etc.", then the guaranteed amount is a federal direct loan. The RBC loan registered on the report is risk and that would be the only one reflecting on your credit history.

 The best thing to do is contaf tme, and let me see your report. This way I can disect it for you and help you better understand what is happening. In January, I will be launching a site that has virtual on-line workshops for people with credit education needs (among MANY other things). You can also wait until then if you wish.

 Johnny  

johnny

sounds like the new year will bring great things !!!

thank you so much for your efforts to assist and educate - we are all very grateful for your presence here.

looking forward to the new site !!