Payments for about 80% of those borrowers have been deferred or postponed until May 1, 2022 but one man says his loan servicer reported his account delinquent, causing a big drop in his credit score. He called KPRC 2 Investigates for help.
At the start of the pandemic, the way some loan servicing companies reported deferred payments negatively impacted borrower’s credit scores. Those issues have since been corrected, but Austin O’Neal still can’t get Nelnet loans to correct his credit report.
O’Neal earned a degree in studio art from the University of Houston in 2013. Every month for about seven years Austin and his parents have sent a payment to loan servicing company Nelnet. When President Trump announced in March 2020 that payments for all federally-backed student loans would be deferred under the CARES Act, the O’Neals stopped paying. Austin’s dad Eddie said their Nelnet account confirmed they didn’t owe anything.
“It says current amount due- $0,” the elder O’Neal showed us on his son’s Nelnet account.
But in November, Austin got an alert about his stellar 781 credit score.
“All of a sudden it dropped 150 points in a minute,” he explained. “That’s when I knew something was wrong.”
Austin said Nelnet reported his loan delinquent, causing his score to crash to 632.
“It means a lot whenever I need to go find a new apartment or a new townhome, house anything,” the 33-year-old explained. “If I need to refinance my vehicle, even new employers will check credit history and it’s very important to me to stay on top of my credit score.”
When the O’Neals called Nelnet, a representative told them Austin’s student loan is private, not a federal loan, and therefore not eligible for deferment.
“I’m not asking for anything special. I just want it removed from my history,” Austin explained.
Nelnet’s Communications director sent KPRC 2 this statement:
“Thank you for reaching out and providing Nelnet an opportunity to respond. Because the security and privacy of customer information is a top priority for Nelnet, we are unable to discuss any specifics related to customers and/or their accounts. However, please know we have also reached out to the borrower directly to see if there is an opportunity to assist him…ReadMore…
