I saw a post on another board about restrictive agreements. So, I wondered if you could help on this. I paid a student loan off 5+ years ago through reconsolidation. They reported a zero balance soon after to the credit bureaus, gave me a letter 3/97 stating paid in full, another letter 2/99 paid in full, reported paid in full to credit bureaus later, and other letters stating the same since. Does independent confirmation of "paid in full" serve the same as a restrictive endorsement? In the State of Washington, are there other requirements that must also be met for a restrictive endorsement to work? I mean, later can the guarantee agency say, "well, paid in full only refers to principal balance. You never paid all the collection fees. So, we never falsely reported you because you really did have open balances, past due status, etc." 1) Does there have to be a documented dispute for the restrictive endorsement ot work? 2) Does the creditor have to acknowledge independently that the restrictive endorsement was accepted? Thanks in advance.
Steve: I researched the Revised Codes Of Washington (RCW) plus the HEA and cannot find any direct reference to the topic of supplying a â??Paid in fullâ? receipt while other monies owed still exist. In my own personal opinion, I believe a paid in full notice whether it is from a guarantee agency or the direct lender constitutes what it says, paid in full but does not constitute a "Restrictive Endorsement". There were no Restrictive offers made or discussed, but rather a consolidation of a student loan that followed with a "Paid In Full" written document. Had there been other fees due then the responsibility of the lender or agency would have had to add a clause or sub section in your documents stating clearly that â??other Feesâ? may still be out standing. Did they add a clear and concise section in your consolidation documents or paid in full receipt that "Paid In Full" did NOT include additional collection fees outside the scope of what was reconsolidated? If, so, then you could owe more for the fees but in general, I say not. RCW 28B.10.293 Additional charges authorized in collection of debts- institutions of higher education. Each state public or private institution of higher education may, in the control and collection of any debt or claim due owing to it, impose reasonable financing and late charges, as well as reasonable costs and expenses incurred in the collection of such debts, if provided for in the note or agreement signed by the debtor. (notice how the ACT says "If provided for in the agreement signed by the debtor") [1977 ex.s. c 18 § 1.] SEC. 1998 Amendments to Higher Education Act of 1965 420. FEDERAL CONSOLIDATION LOANS. I found no reference in the HEA, Consolidation sections (subsection 420), of additional student loan collection fees AND paid in full receipts. Also, pursuant to the financial responsibility standards described in section 498(c). I found no reference to monies owed after a paid in full receipt. The HEA plus the terms for FFEL,Stafford and Perkins are all found here. http://www.ed.gov/legislation/HEA/index.html Hope this helps some...... Kristi Steve A wrote: ------------------------------- I saw a post on another board about restrictive agreements. So, I wondered if you could help on this. I paid a student loan off 5+ years ago through reconsolidation. They reported a zero balance soon after to the credit bureaus, gave me a letter 3/97 stating paid in full, another letter 2/99 paid in full, reported paid in full to credit bureaus later, and other letters stating the same since. Does independent confirmation of "paid in full" serve the same as a restrictive endorsement? In the State of Washington, are there other requirements that must also be met for a restrictive endorsement to work? I mean, later can the guarantee agency say, "well, paid in full only refers to principal balance. You never paid all the collection fees. So, we never falsely reported you because you really did have open balances, past due status, etc." 1) Does there have to be a documented dispute for the restrictive endorsement ot work? 2) Does the creditor have to acknowledge independently that ....
I hope this helps to answer your question. When you do a consolidation of Federally Insured Student Loans, the servicer/lender informs the consolidator of the entire amount owed to them by the student borrower. This includes any late fees or any other type of charges owed to them. This is done under Federal Guidelines. I hope that this helps you. BTW, I deal with Federally Guaranteed Student Loan Consolidations daily. If anyone out there needs any assistance in this area, please contact me by email at bbourjaily@hotmail.com This is a free service that my company offers. Brian Bourjaily Snior Loan Specialist
Jeez, Kristi. I'm really touched that you took the time to research that question for me. In fact, I'm astonished. To Brian: According to AFSA, "paid in full" only refers to principal balance. Collection fees are assessed by the guarantor (regarding defaults) and can be assessed after consolidation. I have independent confirmation of "paid in full" only referring to principal balance from a former worker in the Seattle Pacific University business office. In fact, he said once the Dept. of Ed issued a form letter to give to borrowers which stated "paid in full" but was meant to apply only to principal balance. However, he could have been confused. It might have been made up by a guarantee agency (in my case NELA). Can you direct me to the Federal Guidelines that state the whole loan including additional fees must be included in the consolidation loan? Thanks.
Why? Because so many companies are TOO busy to help! (LOL) Anytime Steve. Steve A wrote: ------------------------------- Jeez, Kristi. I'm really touched that you took the time to research that question for me. In fact, I'm astonished. To Brian: According to AFSA, "paid in full" only refers to principal balance. Collection fees are assessed by the guarantor (regarding defaults) and can be assessed after consolidation. I have independent confirmation of "paid in full" only referring to principal balance from a former worker in the Seattle Pacific University business office. In fact, he said once the Dept. of Ed issued a form letter to give to borrowers which stated "paid in full" but was meant to apply only to principal balance. However, he could have been confused. It might have been made up by a guarantee agency (in my case NELA). Can you direct me to the Federal Guidelines that state the whole loan including additional fees must be included in the consolidation loan? Thanks.
