Closed School--Student loans

The Higher Education Act specifically allows for discharge of student loans where the school closed within 90 days of enrollment. However, you will have to fill out the required form and send it in. If you don 't do it by certified mail, it usually just gets thrown away. You have a right to a copy of your file. You should know, however, that usually the DOE will establish a date of school closure later than the day the school actually closes. I saw a specific instance of this with Knapp College in Washington State and there are references in the Federal Digest to exactly this sort of thing happening at other schools. So, lets say you enroll in January, the school closes in March, which makes you eligible for a discharge. The guarantee agency will generally talk the school into keeping one class open for another couple of months like a night class with a couple students. Then the date the school closes gets established after the 90 day period and no student gets their debts discharged on the basis of closed school regs. Be careful to document the actual closed school day since this is often a point of contention. Also, make sure you fill out the application for discharge. By the way, you can always sue a non-profit guarantee agency or 3rd party collector under the Fair Debt Collection Practices Act. Oh. Before specific statutory laws came out in 1992 or so a letter from the DOE to guarantee agencies specifically advised them that unpaid refunds were uncollectible debts. If the school closed, you may have one of these too. stephen_m_anderson@msn.com Let me know if you need more info. My student loan guarantor still rues the day they came after me.

 

There are two types of guarantee agencies. 1) Those established as "State guarantee agencies" which are, in fact, government entities. 2) Private non-profit guarantee agencies, which are usually estabished originally under a state charter, but are essentially left alone by the state after that. The second kind can be sued under the FDCPA. The first kind cannot be sued under the FDCPA. However, there may be other ways to go after the First kind. Usually, you have to pin-point individual persons withing the governing structure and sue them individually if they depart from regulations issued by the policy making arm. A non-policy making arm of government (operational arm) can sometimes be sued too, if its activities depart from the policy making arms issued policies and procedures. There are ways to redress issues. Its always a fight. In fact, you should probably find out who provides liability insurance to either type of entitiy and make an insurance claim for any damages you suffered. By the way, I am not an attorney and the previous suggestions are merely my personal beliefs and should not be construed as legal advice even though I kicked some a*s once.

 

I should add, there is always a private right of action under the Higher Education Act to have student loans discharged if the school closed, false certification, and unpaid refund--even against a state agency. Also, the Freedom of Information Act gives you a right to access your student loan file against a federal agency. Most states have a similar right of action to access records from a state agency. However, usually, student loan organizations simply refuse to cough up such records, which makes them an easy target for a lawsuit. This is one of the reasons why I particularly like to help people with their student loan problems. It seems most student loan collectors can't help violating the laws (overbilling and withholding records at the very least).

 

After I won my case, I got excited about law and enrolled in law school. I'm a second year student now. But your right, I've only met one lawyer who knew anything about student loans and it was because he defaulted on his own loans and got stuck with a very large collection fee.

Usually, the court process goes hand in hand with an insurance claim. But you never know, if you are making a small request (under $10,000.00) you might just get it paid out without having to go to court. You can always threaten bad faith if you have strong documentation.

I figured out what kind of guarantor mine was by accessing their web-page on the net. It said what they were right on there. I could also probably figure it out too if you tell me who they are.

 

Hmm. I wonder if they are trying to get you for collection fees you don't owe. It is an old nasty trick for guarantee agencies to hide collection fees, tell you that your paid in full, and then try to collect the illegal excessive collection fees later through some slight of hand maneuver. I think you should definitely go after them. If they are a private agency, they should have a business license with the state. Usually, you can check with the state Dept of licensing and find out who the registered agent is. Then you file in federal district court under the Fair Debt Collection Practices Act. If they are a State agency it has to be done differently. It might be a violation of the Privacy Act of 1974. Of course, you can get them under the FCRA too if private (and maybe state too).

 

OK. I checked it out on their web-page. The Kentucky Higher Education Assistance Authority and Kentucky Higher Education Loan Corporation are identified on the Web-page as public municipal corporations. This means you can't sue them under the FDCPA. I'm not sure about the FCRA, but I think it applies even to government agencies. Who do you serve. First check to see if the check really came from one of those two entities, or if it came via a private sub-contractor. If it did come from one of the two listed above, I'm pretty sure most states require you to serve the attorney general's office of the state as well as the entity itself. This should be identified in the local rules of civil procedure for Kentucky. Also, it seems to me you may have a cause of action under the federal Privacy Act. I suggest you request a copy of your student loan file to figure out what is going on. Let me know if you need help with this.

 

Just curious. Why did you make a validation request if they didn't claim you owed them money? If I were you, I would double check with the National Student Loan Database System (NSLDS accessible via the DOE website) to make sure your status is properly recorded there. Still, that won't reflect collection fees outstanding. Is there some question about a settlement or compromised claim or something?