I'll try to be short and concise: In 2002 I took a few classes at a local university. Towards the end of the semester, I discovered my student loan was denied because I was delinquent on paying from a previous school loan (another school). This left me with a bill to the current school that was around $2500, which turned into $4500 by the time they turned it over for collection. Williams & Fudge attempted to collect for a couple of years, but had no contact with me. Now it has been turned over to General Revenue Corp. (I think they primarily collect student loans). I'm finally serious about getting my credit clean, so before I contact them, I want to be advised. Here's my concern: My statement from them states Current Principal - $4695; Current Interest $1352; and Current Collection Cost Balance $4032.32! A total of $10K. I can only pay this bill in small increments right now ($100 monthly). Can I negotiate the collection cost? Do I have room to negotiate anything. Is this more of a bill to the school rather than a student loan? Most importantly, I recently pulled my credit reports and this is NOT on any of the 3. It's been 5 years since the debt occurred, but I would still like to work with them to keep it off my reports incase the new collector (Gen. Rev.) decides to report it. Thanks for any advice.
How does $2500 turn into $4695 principal? What amount did you actually borrow? What does the loan agreement say with respect to collection costs? If it allows for "reasonable" collection costs, how is $4000 reasonable, and what has this CA done for that $4000 other than ask for it? Or are they claiming their "collection fee" is somehow an additional 60% of the amount allegedly in collection?
The principal grew with the school because of late fees and interest - I assume. I can't really remember the original amount and don't have any paperwork from then. I have no idea what the collection costs include. There are no terms of the loan, the original loan was denied, leaving me with a direct bill to the school - it was past the deadline to drop the classes and full payment was due.
I would demand that the CA provide validation of the alleged 'loan'... Unless there are written terms, they can only charge the interest rate allowed under the law, and only fees which are allowed under the law. NO EXTRA FEES would be applicable, as there wouldn't be a written agreement authorizing the additional fees.
Let me pose this question: If I understand correctly, after 7 years or so (from the date of no payment) it can't be added to my CR and the statute of limitations to collect will have expired (state of TN). That time will be sometime in 2009. Since this isn't on my CR now, would you let it ride? However, I guess this all hinges on if they can legally consider this a student loan. This is a great site, today's my first day...I appreciate all the help already.
It is only "government guaranteed" student loans that have no SOL. If the loan you had applied for was denied, then there could not have been such a government guaranteed student loan, just based on current tuition charges by the school. What you have was not a loan, but a contract that you might owe on based on breaching it, unless you specifically agreed to converting it to a loan with interest and late fees, etc. Terms disclosed in the school catalog, or possibly on an application you might have signed, might determine what terms were part of the alleged contract, and therefore what they could add in interest and late fees. There might also be limitations due to state statute, or even state usury laws. (This is NOT a CC debt.) $2500 at 36% APR for 4.5 years becomes $10k.
Is this a state college, or a private trade school? Was denial of the student loan the reason for your withdrawing, yet there was no change in your liability for tuition for doing so? Did you in fact withdraw after the date that any tuition would be reduced at the time, or is this just what they claim now? Does state law specify how much tuition must be reduced for withdrawl by certain dates? Were you in fact denied the loan, or did the loan actually go thru and the school pocketed the money? It has happened before.
It was a private school. They offered night classes in an adult program, 8 weeks long. I took 2 classes in that one 8 week period. By the time I found out my loan was denied, the classes were almost over...I continued to complete the class though. I guess I need to contact the school at this point and get copies of all my enrollment papers...
