Unpaid tuition now in Collections, need some advice!

Hi I hope someone on here can answer these questions!

I have unpaid tuition that is now being handled by a collection agency. I have learned from Soaplady's posts that
1) tuition has no SOL
2) they are not "sold" to the CA, they are just under contract
3) the fees that are added on are "collection fees" (up to 50%), not "interest".

My question is this - is the 50% "collection fees" supposed to based on the Original Amount owed for tuition (in my case about $1500), or the amount after years of interest added on (in my case, the University had added about $1400 in past due charges totalling $2900 - before it was sent to a collection agency).

Also, if the collection agency can't charge interest, why did the collection lady tell me that I need to pay this ASAP otherwise I will keep accruing interest to what is owed (and true to this fact - each month statement I get from them is about $40 more than the month before)? Does that mean the university is still adding on monthly interest & fees even while the account is with the collection agency?

Any advice would be helpful!

hi ktsweets--

Remember, as you noted, the account is not sold to the CA--they are assigned the account to collect on, on behalf of the entity that still owns the debt. So, even though it may be assigned to the CA to collect, that doesnt change the ownership of the debt, and it doesnt change anything about the interest being added. Remember when you took out the financial aid that there was interest? That interest is legally acceptable because you agreed to the interest when the loan began.

As for the 50% fee, I am only guessing here, but I would imagine that it would be up to 50% of whatever the amount owed is at the time the CA gets the account, because that is the actual amount owed. Whatever was owed before is different and has no bearing on what is placed with the CA now--what is owed now does. Like I said, just a guess, but thats probably how they work it. There is a specific section on this forum for dealing with student loans--you might find more help there. Pretty much everything about collections is different with student loans--even the laws that govern it--because student loan collections as far as I recall are not subject to the fdcpa.

MOD COMMENT...student loan collector ARE subject to the FDCPA.

i am not able to pay off this tuition loan right now. I don't mind paying it, but it is stopping me from completing my degree requirements. what can I do ? if i complete my studies, i can earn more money and pay off the loan.

Is your tuition past due already?? Tuition is due each semester, not pay after you get your tuition. Are you borrowing or have you borrowed student loans to pay for your tuition?

You will not be able to continue on if you have past due tuition. You will have a lock on your account.

Agreed, the only way to get the financial hold of your student account is to settle the balance. Some schools offer a payment plan set up through a third party. This allows you to pay your tution an fees each semster in portions rather than the whole balance upfront. Also you can enroll in classes for the semester to continue your degree. Caution is you cannot default from the plan. All payments must be made timely.

My school offers the Academic Management Services (AMS) payment plan. They advised me to enroll in the paymet plan at the beginning of the semester. AMS required a portion payment upfront. Then I made regular payments therafter untill it was paid off by the next semester.

I do not think you can apply this to your past due tution and fees. I believe that has to be settled before you can re-enroll for the next semester

this is on an old tuition debt. I dropped out 1 week after the allowed "drop date" when I finally got the news that my student loan wouldnt go through (my fault for procrastination, I applied late) so at the point I owed the university the full amount of that semesters tuition, even though I received no credits for it. I have another question though to add on - this went to collections May of '02, however for the past year has not been reported to the credit bureau. Now it is with a new collection agency - can they report to the credit bureau now? I know there's no SOL for them to collect however do they have to follow the 7 year cbr deragatory reporting rule?

By the way - the original debt is actually paid off now (from past years of having my tax refunds confiscated), I just hadn't paid the collection agency fees. But now they have transferred to a new collection agency?

I'm in a similiar situation, I owe my undergraduate school a little over $ 5000, I graduated in 07 but I really what to enrolled into grad school. I currently have a descent job but I want to get my masters, I don't have the money to pay them off, what should I do? I need my diploma and transcript.

The only thing you can do it pay it off if you ever want to go to grad school. Take a second job and apply it all to the debt.

My daughter has a student loan in default. Allied is the CA. The original amount was fairly small, about $2600. When she was contacted by Allied the first time we discussed a down payment and agreed to the rehab program. I made the suggested down payment for her and charged it to my credit card. After the charge was executed Allied called and said it was $200 too much in order to qualify for the rehab program citing a $50 minimum monthly payment and a $500 balance at the end of 10 months. I disputed $200 with my credit card company and received a refund but the monthly payments never started (Aug 200. Allied refuses to acknowledge the $200 reversal and demands the BIF because she doesn't meet the rehab program requirements. We're at a loss for what to do. I would just pay the $800 balance but she wants the rehab program to help her credit report. Any advice?

It would have been your daughters responsibility to submit her monthly payment or submit an autodraft...they cannot automatically charge a credit card monthly. If the payments were not made, she cannot do the rehab and whatever was paid last summer is irrevelant.

SoapLady, Thanks for your response. She never signed the rehab docs or agreed upon a monthly payment because Allied shut down the process when they realized the monthly minimum and balance requirements would not be met until the $200 credit card charge was reversed. They claim it wasn't reversed even though my credit card account was refunded. We're at an impass. Are you familiar with the minimum $50 monthly/$500 balance after 9 monthly payments requirement? This is a legitimate requirement?

I apologize this is getting long but have one more question. Is the credit score benefit of the rehab program versus paying the loan in full sans the rehab program worthwhile enough to keep arguing with Allied?

It used to be $800-$1000 for a rehab although things might have changed.,

Rehab docs, the official ones are not signed until much later, closer to the completion of the 9 payments.

If the $200 was reversed, it should have charged back. However since it was done on YOUR card and not hers, they may not be able to trace it back to her. Your name is not on file so the accounting department might not know who to debit.
The agency I worked at used to have a "lost and found" file...payments and transfers that came in with no account numbers/names they couldnt trace to an account number.

I have an unpaid tuition bill of 1,750. It is presently in Collections. Collections is now saying that if I don't pay the balance OR a portion of the balance + monthly payments by TOMORROW, they are sending my file to their legal department. Even if I could raise the portion (which I can't), I wouldn't be able to afford the monthly payments. My plan was to pay it all off with my tax refund, but that's 3-4 months away. What usually happens next - when it goes to the Legal Dept?

They could end up suing you.

...and if they sue me and win? What should I expect and what's my time frame? I just want to be prepared. My biggest fear (and I hope I don't sound silly for saying/suggesting this) is jail time.

Debts are civil, not criminal. Debtors prison went away with the dark ages.

If they sue you they could garnish your wages and/or your bank account.