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Anything I need to be looking out for?

I had all of my federal stafford loans refinanced through Direct Loan Servicing a few years ago. They've been fantastic to work with.
I hated Sallie Mae. You call Direct Loans and you get someone on the phone in 2 minutes and they are from the US. You call Sallie Mae and you get "John" from "Chicago" with an Indian accent so thick I can't understand a damn thing he says.

Has anyone dealt with CoStep before? I've never heard of them.

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i heard many stories of people's loans getting screwed up after DL transfer. Mines was transferred to Mohela and they t... (more)

nwill002 (Jun. 14, 2013 @ 10:42a) |

Mine was transferred from Direct Loans to Costep a while back.

Just got notice it got transferred from Costep to Mohela.

I... (more)

dk240t (Aug. 14, 2013 @ 3:14p) |

I don't think you understand how student loans work.....

KatoKrazy (Aug. 14, 2013 @ 6:00p) |

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Pay them every month and you won't have any problems.

wateristasty said:   Pay them every month and you won't have any problems.

Unless they are like Sallie Mae and constantly "lose" my paperwork, or if I fax it in, claim that the brand new Xerox machine I'm using at work isn't faxing it to them clear enough to read.

Oh, or triple bill me. That was a fun month. After that I had to setup a second checking account only for student loan money, so they couldn't drain my main account again and then not pay it back for 90 days because of "policy".

My federal loans were also transferred to another lender. Since it shows accounts being closed and new accounts being opened, anyone know is this impacts your credit score?

avalon6 said:   My federal loans were also transferred to another lender. Since it shows accounts being closed and new accounts being opened, anyone know is this impacts your credit score?

It shouldn't, but you also have to know how to read a credit report.

About 3 years ago I tried to refinance my mortgage with my current lender. I filled all the paperwork out, then about a week later I get a call from a very snotty loan officer who tells me there is no possible way they can refinance someone who has $200,000 in student loan debt.

I explain to him there no possible way I have that much debt, I have $70k in Federal Stafford loans (5 years BS, 2 years MA).

He says that's not what my report says, and that he's going to reject it.

So I spend the next week pulling my credit reports and speaking with the local bank manager. I basically had to prove to them that their loan guy was an idiot and didn't know how to read a credit report. The report clearly showed 2/3rds of those loans where paid off, from where I'd refinanced the Federal loans and paid off all of the private loans.

Even if CoStep was the worse company in the world there's nothing you can do until they make a mistake.

deleted by popular demand.

if you need help with sallie mae loans, write a letter to the office of the customer advocate.
contact info here.

avalon6 said:   My federal loans were also transferred to another lender. Since it shows accounts being closed and new accounts being opened, anyone know is this impacts your credit score?

initially you may take a small hit for new accounts, but it will eventually help since you will have more accounts increasing in age. but neither the hit nor the bump will be anything to get excited about.

These Direct Student loan transfers have the potential for things to get messed up. They are very resistant to fixing mistakes on their part with the credit bureaus, and the Department of Ed people don't make them fix mistakes. The new CFPB wants jurisdiction, but even they have had limited power, and the Student Loan Ombudsman does very little. See more discussion at places like the Student Loan subforum on Creditboards.

I never had student loads thank God, but I have found that the Ombudsman is more responsive after I contacted them for a client a second time and our local congressman sent them a letter in the interim.

My husband's loans were also just transferred to Costep. Although he sent in much more than the minimum, they did NOT apply it to principal. Instead they advanced his due date by 5 years! After speaking to them, they gave him a number of hoops to jump through so that his payment would be applied to principal. The very next payment he followed their instructions to the letter and they advanced his due date by a year. When a due date is advanced, instead of paying principal, the company is able to collect interest. Even several days of interest adds up until they "fix" their mistake.

My girlfriend's loans were also just sold to CoStep.

angelamariemoser - What are the steps for applying to principle?

In general I thought it was an ok move, since CoStep changed her interest rate from 6.8% to 6.3% (on $19k of loans).

do178b said:   Even if CoStep was the worse company in the world there's nothing you can do until they make a mistake.

Refinance through another company? Pay them off early? That's two options you could exercise before they make a mistake.

I paid off my federal sub stafford loan several years ago. Any chance this company has that info and still charge me illegally if they got that info?

I try calling them today. I was holding for exactly 32 min & 32 seconds. Eventually received a recording advising me I was the 13th caller. My school Loan went from $177 a month to $ 840.10 a month with this Cosept company. It gets worse the statement came today & that money is due June 1st. I do not have a good feeling about this company. Direct Loan was so easy to contact & flexible. This is scary this new company. Any suggestions anyone?.

here are 3 links that you guys should look at, in order.

the costep website gives you the process for correcting problems. i would suggest making a complaint in writing to costep, and CC the DOE ombudsman. this will show them you're serious about getting things resolved and put you at the front of the line for corrective action.

http://www.costep.org/students/paying-back/ombudsman


the following are links to the DOE ombudsman. i have sallie mae loans so i can't give specific advice on how to make costep get their crap together, but as you guys go thru the process, please report back so that others may learn from your experience. let's find out what works and what doesn't.

http://studentaid.ed.gov/repay-loans/disputes

http://studentaid.ed.gov/repay-loans/disputes/prepare

nixmahn said:   I paid off my federal sub stafford loan several years ago. Any chance this company has that info and still charge me illegally if they got that info?

About the same chance of some bank buying your paid off mortgage and charging you.

Their customer service line is a painfully long wait. With my previous holder, I never had to call and just made my payments every month. This company doesn't know much about managing student loans yet. The options to pay are limited. I can't adjust my total every month. My bill shows as three separate payments instead of just one big lump sum (which messes with me when balancing my money). I'm not impressed. Now I just tried to login to their website at 11PM on a Friday night and there's a notice telling me to Please call Customer Service. I'm calling the department of education before I call that company again to get a new holder. I'm very dissatisfied.

They did the same thing with my loans. I actually requested a loan payment modification and got a two month reprieve. The new payment came in from Costep saying the new lower payment was good for a year and then the payment would jump up to $800 a month. I, too, called and held for 34 minutes. The rep said that i needed to re-apply before these payments go into effect. I don't feel good about this move either. I had been with Direct Loans for years and was flipped without notice and my first bill said I was two months late when I had an extension through Direct loans and didn't even know they were selling me out. I'm scared because the ST in costep stands for South Texas - Another great company from Texas!

nsdp said:   I never had student loads thank God, but I have found that the Ombudsman is more responsive after I contacted them for a client a second time and our local congressman sent them a letter in the interim.I found a major problem with ACS' interest calculations, called everyone out on it, notified the Ombudsman, etc. Everyone admitted that I was right, but the Ombudsman's office basically told me straight-out that my calculations were too complex and that they didn't understand them and therefore didn't have the time or resources to deal with it. I told them I would write my Congressman and let him know that the Ombudsman "didn't have the time or resources to deal with [my student loan billing error]."

About a week later there was a ~$3,000 adjustment to my loan balance.

Definitely watch your accounts like a hawk. They will use any excuse to take more money from you due to "errors" when they change hands.(Even more so if you have required payments) My principle wasn't calculated correctly (that's the story) when my loans were transferred 2 months ago(not costep), and yet there was no change in reporting to credit bureaus until now. They admitted that the interest on subsidized loans was incorrectly increased and that the unsubsidized balance is wrong. What I'd like to know is why one subsidized loan was spared this "error", and why it took them 2 months to report these "changes" to the bureaus since they received the accounts. Hoping I wouldn't notice? What a joke.

infogirlgeek said:   Definitely watch your accounts like a hawk. They will use any excuse to take more money from you due to "errors" when they change hands.(Even more so if you have required payments) My principle wasn't calculated correctly (that's the story) when my loans were transferred 2 months ago(not costep), and yet there was no change in reporting to credit bureaus until now. They admitted that the interest on subsidized loans was incorrectly increased and that the unsubsidized balance is wrong. What I'd like to know is why one subsidized loan was spared this "error", and why it took them 2 months to report these "changes" to the bureaus since they received the accounts. Hoping I wouldn't notice? What a joke.

which lender and what steps did you take to resolve the errors?

MDfive21 said:   infogirlgeek said:   Definitely watch your accounts like a hawk. They will use any excuse to take more money from you due to "errors" when they change hands.(Even more so if you have required payments) My principle wasn't calculated correctly (that's the story) when my loans were transferred 2 months ago(not costep), and yet there was no change in reporting to credit bureaus until now. They admitted that the interest on subsidized loans was incorrectly increased and that the unsubsidized balance is wrong. What I'd like to know is why one subsidized loan was spared this "error", and why it took them 2 months to report these "changes" to the bureaus since they received the accounts. Hoping I wouldn't notice? What a joke.

which lender and what steps did you take to resolve the errors?


Granite State Management(who did not have compatibility with mint.com around March/April 2013 and now does), and they are in the process of fixing it and reporting to the bureaus. If they fail to in a couple weeks I will start disputing. I don't want to do that now b/c I've been patiently waiting to apply for more credit card bonuses and seeing "disputed" over most of my loan accounts probably won't look great if I need to call reconsideration. The amounts may be wrong but it is a very small real amount as well as percentage, but obviously, this being FW I am not just going to allow it.

I had my account transferred to Costep from Direct Loans and am extremely frustrated with their customer service. I cannot find any detailed payment information on my accounts through their website.
When I made a payment, I had to call to make them apply it to the ones with the highest interest rates and they said that it would take a few weeks for it to go through (during which interest would still be charged, I assume) and that I would have to call (and wait) EVERY TIME I made a payment in order to apply it to the highest interest loans.

Furthermore, the stated balances online do not match what the person says on the phone, which leads me back to the issue of not being able to find payment history for any of the accounts to even check if they're scamming me! Gaaaah!

It's a simple spreadsheet - it's not hard if one has all the data, but I just can't figure out how to get my hands on it. Surely they're obligated to provide some balance sheet with the principle, interest and payments all broken down by account over time, right?

i heard many stories of people's loans getting screwed up after DL transfer. Mines was transferred to Mohela and they tried to reset my 10 year standard plan. I found out after digging into why my monthly payments were lower.

Mine was transferred from Direct Loans to Costep a while back.

Just got notice it got transferred from Costep to Mohela.

I have no idea what my long term payment plan is...it is graduated, with a fixed rate, but I don't know when its supposed to go up. They'll probably screw it up, but it won't matter much as long as I keep that low fixed rate.

angelamariemoser said:   My husband's loans were also just transferred to Costep. Although he sent in much more than the minimum, they did NOT apply it to principal. Instead they advanced his due date by 5 years! After speaking to them, they gave him a number of hoops to jump through so that his payment would be applied to principal. The very next payment he followed their instructions to the letter and they advanced his due date by a year. When a due date is advanced, instead of paying principal, the company is able to collect interest. Even several days of interest adds up until they "fix" their mistake.

I don't think you understand how student loans work.....



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