Turbo sent me an e-mail today saying I've been reported to a collections agency by the Department of Education. I missed a couple of payments since I moved and haven't been getting the bills in the mail. I paid off the entire debt in full two days ago. I just called Great Lakes and they have confirmed this.
What do I do?
If your student loan was in default PRIOR to you paying it off, the Department of Education may have reported that default and subsequent collection attempt to the credit bureaus which is why you would have received the letter from Turbo informing you of the default/collections status. Agencies report to credit bureaus typically once a month a most, so the letter was likely sent before you paid off your loan. If you have confirmed that your account is in fact paid in full, you should see that update in Turbo within 30-60 days, depending on when it gets reported.
If you have confirmed that the loan is paid in full, make sure you keep your receipt or bank record for verification. Have you received a collections letter from a collections agency? You could contact them to confirm they have been notified that you paid your loan in full. If you have not received a letter, and you have confirmed with the Dept. of Education that the loan is paid, and you have a record of the funds being deducted from your bank account or credit card, then you should be in good standing.
I spoke with Great Lakes and TransUnion.
GL said I should have nothing to worry about. TU said essentially the same thing but also to wait before I do anything. I paid in full, but everything updates in 30 days. So I would know by then. I have not received any letter or e-mail besides the one I wrote about. I missed a couple of payments but I paid those off including this months bill and next months bill which put me in the clear.
I'll keep my next bank statement and I have messages in my GL account with confirmation numbers, etc.
I'm guessing it's just a scare tactic but I know I paid it all off and don't want to make this problem bigger.