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gowithapro2015

Student Loan Business Model who is on first

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I have defaulted student loans. With the intention of rehabbing these loans, (2) Under student status it gives an incorrect withdraw date. The report also states my direct loans as FFEL loans. Additionally, since there is an offset taken from Tax Returns since 2005, I can't seem to get any verification this money was applied. I called the University as they were the receptors of the loans, I requested verification concerning the withdraw date, and why direct loans were FFEl. There response was the withdraw date was correct, and that I had no FFEL but Direct loans. Basically they repeated my questions back to me.

 

Before I go any further, as a consumer what are my rights regarding these loans? When I ask for verification are they required to actually tell me how this was verified, basically she just went to the same website I did. I mean it behooves them to be correct because if they are incorrect there is a refund due to the loans they received.

 

Also I requested how the direct loans became FFEL? No response from the U.

 

Additionally I asked if I could access the applications themselves to see how I was even eligible for the loans since I was failing? The point is, do I have a right to see how my eligibility was determined?

 

Bottom line, they told me to contact Department of Education. Who are they in the stream of this collection process. Where does the buck stop? Thanks

 

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I have defaulted student loans. With the intention of rehabbing these loans, (2) Under student status it gives an incorrect withdraw date. The report also states my direct loans as FFEL loans. Additionally, since there is an offset taken from Tax Returns since 2005, I can't seem to get any verification this money was applied. I called the University as they were the receptors of the loans, I requested verification concerning the withdraw date, and why direct loans were FFEl. There response was the withdraw date was correct, and that I had no FFEL but Direct loans. Basically they repeated my questions back to me.

 

First the withdrawal date is not always the date you actually stop going to class or when you submit the request to withdraw from the class/school.  It is when the paperwork to formally withdraw is processed and approved.  That is likely why the date is different from what you believe.

 

Second:  ANY tax refund they applied to a defaulted loan quickly was swallowed by the accumulating interest and late fees while in default.  You will not see any change in the balance until you make consistent payments for 6-9 months and get ahead of this issue.

 

Before I go any further, as a consumer what are my rights regarding these loans? When I ask for verification are they required to actually tell me how this was verified, basically she just went to the same website I did. I mean it behooves them to be correct because if they are incorrect there is a refund due to the loans they received.

 

There are 2 problems with this:  one is that the lender is the Federal Government which makes them an original creditor and not subject to the FDCPA.  The other problem is that they don't have to sue you to collect.  The government has a myriad of draconian ways of collecting on defaulted federal loans and none of them involve court or the methods of dealing with debt you see on sites like this one because they are federally backed loans not defaulted credit cards.

 

The school is NOT the recipient of the loans YOU are.  That is why you are supposed to be repaying them.  The school received the money for your tuition which is what the loan was for.  The school is no longer a party to this issue.  This is between you and the lender now.  Also, there is no refund due to you or the school.  When you withdraw the school is supposed to refund the loan amount (depending on WHEN you stop attending) and then you still owe the tuition to the school even though you withdrew from classes.  The school can then report that tuition due and sue you for the money though many schools don't.  You are much better off owing the government who has a rehab program that will clear up much faster than a collection agency trade line from the school.

 

Also I requested how the direct loans became FFEL? No response from the U.

 

Additionally I asked if I could access the applications themselves to see how I was even eligible for the loans since I was failing? The point is, do I have a right to see how my eligibility was determined?

 

Most likely the loan(s) you received at the end were FFEL due to the fact you were failing.  When a student is no longer making sufficient academic progress they can get one maybe two more semesters of loans to try and get back on track before even the government will stop supporting the situation.  Typically at the point of failing though they convert the loans to FFEL to put parents on the hook as well.

 

You do know how your eligibility was determined:  you filled out the FAFSA.  Go back to that account and it clearly lays out how and what you applied for and how they determined what loans you were granted.

 

Bottom line, they told me to contact Department of Education. Who are they in the stream of this collection process. Where does the buck stop? Thanks

 

The DOE is the lender/creditor.  That is who you deal with now.  They have an excellent rehab program where you if you make your payments on time for 6-12 months they eliminate the added on interest, penalties, and fees and restore the loan to a pays as agreed status removing the late(s) etc.  When it comes to federal loans I recommend getting into rehab as soon as you can because the government can seize wages, bank accounts, and tax refunds with no notice and without having to sue you first.  

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