Help, anyone with student loan default experience/lawsuits for discharge???... Sorry if this seems to go on forever, I am desperate for help here... My hub signed on with some vocational school way way back in 1987... they convinced him to apply for some loans... he withdrew a month later and never checked back about the loans- just figured they were sent back to lender since he withdrew- and was never contacted until a year ago when our IRS tax refund was taken. You can imagine what the interest is like on these- out of control Since then, we received 2 or 3 Dept. of Ed notices about the loans and then it was sent to some collection agency - I said BINGO, lets validate- so we did. They sent us the following: 1.) some application/promissory notes which were not signed by the lender- space for signature left blank. Without the signature- I asked for proof of disbursement and they sent back some computer print-outs that proved nothing. Remember, this happened before electronic signatures were permitted. Shouldn't they have to prove to us somehow that the loans were actually disbursed? 2.) The application/promissory notes have a maximum loan amount on them- all of the loans they are claiming he owes exceed the maximum allowed and all originated from the same lender (who happened to be indicted for student loan fraud about a year after they say these loans were taken). Doesn't the lender have some responsibility for over-lending on student loans in this situation? 3.) The computer print-outs they sent us say the loans originated from one place, while the promissory notes say the loans originated from another, I know loans get tossed around in the secondary market, but shouldn't their only be one real "orginating" lender? Does this put into question the validity of the debt? 4.) Computer print-outs say default did not occur until 1995 - this is completely strange, why would default occur 8 years after the fact? again, validity? 4.) To top it off, the school closed-- also problems with student loan fraud-- and we are having difficulty finding a source for student records for closed school-which might prove that since he withdrew, the loans should have been returned. Sorry, so very desperate here. Based on the info I just gave, should we try to sue the Dept. of Ed to get discharge? the collection agency since they are collecting on the account? Don't really know how to fight the DoEd- anyone tried?? or should we just cut our losses, pay for a while and then try to consolidate? I am afraid to wait any longer on this, I smell a judgement coming on...
whyspers or radiohead, since you have access to lexis nexis perhaps you can give me some info on lawsuits of this nature???
I do not have access currently, unfortunately. I wish I could help you more on the student loan issue. I currently have my own student loan issues, but they are unrelated, I am doing a rehab, as I think we discussed in chat before. Have you tried talking to the DOE? Maybe they can cut the interest. There are also federal programs that will forgive student loans for certain circumstances, I am not sure of the details, probably a long shot. Personally I would dispute with the CRAs and make the CA (DOE) validate. If they do not validate, I would proceed with a lawsuit. You might already be at this point. Try to get them on some violations, like not updating the dispute process with the CRA, might give you some leverage. They must obey the law too!
1*Why should he pay for goods or services that were not delivered? 2*He never took the loan so what is there to forgive?
Kit, I've been thinking....back when I was in college, the policy was something along the lines of if you withdraw the first week, you can get a 75% refund, the second, 50%, third 25% and after the third week, if you withdrew, you could not get any of your money back. If your husband attended for a month, there is a good chance he was not entitled to a refund. Also, whether the lender signed the documentation or not, if your husband's signature is on the disbursment forms they sent you, then he signed for the loan and it would be considered disbursed. I don't know why they would say different lenders were the originators, but heck...Cross Country is showing on my CR, but EQ verified it with Allied something or other...which is, I believe, just a d/b/a of CCB. At any rate, I don't think you will have anything there, but could be wrong. I would think there would be a question as to why it wasn't defaulted on prior to the date they said it was. If I'm not mistaken, there are guidelines for banks on when they are supposed to "charge off" there may be something there somewhere. Have you tried calling and speaking with a supervisor at the Dept. of Education? Explain the situation and maybe they can give you a place to start looking into this further. It complicates things for you that the school is no longer around. I don't know that any of what I just said is right...just my take on it after thinking about it overnight. Others might do something different, but I think in your situation, I would probably try to rehab the loan and in a year, the negative information would come off (supposedly...still fighting EQ myself). L
whyspers, the real problem here is that- this being before standardized forms were in place- the application for the federal loans was the same form as the promissory note (no FAFSA pre-approval process). The only amounts showing are in the "amount requested" section- there is no indication that this amount was ever actually disbursed. In fact, the fine print reads...I agree to pay back the amount requested above or any lower amount approved after the application is considered. How are we to know, without actual proof of the disbursement, that the "amount requested" was actually the amount sent?
Kit, I'm in the same situtation. I pulled out of a bogus trade school (the training was extremely poor and the employment support was unavailable) this school closed down as well The guarantor cannot keep dispersing funds to that school if you withdrew - that is illegal. You need to apply for a refund with that loan guarantor. -Sal
Question, If you rehab the loan will you be responsible for high fees added to the loan? Is there a way to lower the fees? A friend of mine defaulted on a student loan and it want to a CA, and they immediately jacked it up by 9K. If he rehabs, I think he would have to pay all unless he negotiates....
you should contact the dept of ed, especially if there was student loan fraud involved for the institution. it may take a while, but you can absolve yourself from responsiblity for this issue. also contact your state dept of education, whoever licenses this type of school. they can give you information on whether they were accredited, other complaints, etc, to strengthen your court case if it comes to that.l
Kind of a strange situation, the guarantee agency OWNED the school... I swear my hub got in with a rotten crowd... School - owned by guarantee agency/ School closed down Dept. of Ed. giving ATB discharge claims on all loans made through school. Guarantee Agency- shut down after it was discovered that their computer systems screwed up all of the loan information Lender- closed down for student loan fraud/over-extended, left thousands of loans unguaranteed. Secondary lender - stopped student loan business because they were "caught" filing fraudulent default claims ... I swear, it couldn't be worse.
Anyone SUCCESSFULLY negotiated a settlement with either the dept. of ed. or the ca collected on loans? I mean below the actual amount they are sayng you owe...
Correction: the school and loan servicer were one and the same company and it was the loan servicer that was shut down after it was discovered that their computer systems screwed up all of the loan information in the database... sorry it just gets so confusing sometimes. We have given up the idea of rehab since the payments would be way more than we could ever reasonably afford, still thinking over consolidation since we could draw out the payments over a longer period of time... but STILL I am having a hard time coming to terms with this - it feels like we are getting the big shaft here... why should he pay over 20K for an education he never received... IRRITATED, ARGHHHH
Kit, they shaved amost 2K off my student loan after rehab. All of the collection fees, etc. were "forgiven". It may be worth a shot. I wish I had some answers for you because you are in a really frustrating situation. Anyone know what the governing body is for student loans...above the Dept of Ed? L
kit, mmm, i kinda doubt guarantor owned the school if these were federal loans the gurantor would be usa funds or ultimatley sallie mae... you still need to contact sallie mae, i am telling you i used to work for one of these outfits, you can get out of it if your information is correct, have you talked to anybody at the dept of ed.????
diva- like I said, the loan servicer and school were one and the same company, NOT guaranty agency and school... a mistake made out of frustration... TO TOP IT OFF... called the state agency in charge of closed school records... funny thing happened on the way to student loan hell... the state agency TORCHED all of the enrollment records-- seems they only keep these for 5 years after a school closes. Was really hoping that these would help us with our claim that he withdrew from the school and so school should have sent a refund....so much for that... Anyway, diva we have written a very long letter to the Dept. of Ed in hopes that someone there will help us out with the situation. So we will see what happens.
