Decades Old Student Loan in Default

It is my opinion that this was probably not discharged. The laws back then required 7years between the time the loan became due (when you entered into repayment) and the bankrutpcy filing.

You can look up your loan at NSLDS. Were your tax returns ever offset???

There are cases where the prom note cannot be located. However, all they then have to do is show when and how much was paid to the school on your behalf. If you attended a big school, there should be record of the federal payment to your student account.

I know the GI bill was better back then, but it still did not cover everything.

Thank you for your comments, Soaplady.

>>You can look up your loan at NSLDS.<<

I tried to do that but the website asks for a PIN number that was sent to me by ED. I don't think I have a PIN number.

>> Were your tax returns ever offset???<<

No. Which is another strange thing. I haven't exactly been hiding from the government and, for 2010, my federal tax refund exceeded $7k. Furthermore they have never offset my VA disability payment.

>>There are cases where the prom note cannot be located. However, all they then have to do is show when and how much was paid to the school on your behalf. If you attended a big school, there should be record of the federal payment to your student account.<<

It was a trade school that closed years ago. Possibly 20 years ago. It surprises me a little that the CA doesn't have to prove I am responsible for the loan. I understand the preponderance of the evidence thing but Mein Gott, even a low tech guy like me could produce a computer printout that purports payment activity on someone's behalf.

>>I know the GI bill was better back then, but it still did not cover everything. <<

As I recall, not only did it cover everything but the govt actually paid me while I was going to school. I don't know what part of that is attributed to the GI Bill and what part might be attributed to my service connected disability though.

So, what should I do now?

I have applied for a PIN on NSLDS website.

Yet another strange thing on this deal. Even though I have supposedly been in default since 1985 I have heard NOTHING about this until the call from the CA late last year.

When I was working financial aid, it seems to me that VA benefits gave a money stipend in addition to tuition benefits. Even with those benefits, a lot of veterans still had to use stafford loans to meet there cost of attendance. I worked at a public school....tuition for private trade schools even back when you attended was still probably expensive.

As for the CA, they should NOT be contacting you until they validate the debt by whatever means. I would definately suggest filing a complaint with the student loan ombudsman.

You are being most helpful, Soaplady. I really appreciate your effort.

>>As for the CA, they should NOT be contacting you until they validate the debt by whatever means. I would definately suggest filing a complaint with the student loan ombudsman. <<

I thought I read that somewhere. In fact, one time the CA called and the agent apologized immediately saying she wasn't supposed to call me. But they have called several times since.

They are, for the most part, being professional and seem to be trying to work with me to get this resolved. It just doesn't seem to be happening and I don't know what, if anything, I should do.

Again, thanks for your time.

Thought I would take a minute to update you kids on this situation.

About 6 weeks ago I contacted the Department of Education via phone to request a copy of the promissory note. They told me that it would take 3-6 weeks to get it and the agent I spoke to said she had never seen an instance wherein they were unable to locate the note. An agent from the CA also said he had never known them to fail to produce the note.

Additionally, the agent from D of E told me that requesting the promissory note is very reasonable. He said they get asked for the PN all the time and send them out all the time.

Well, between the CA and me, we have been trying to get a copy of the promissory note since the end of January. We still don't have it. I am beginning to think that I am that one in a million for whom they are unable to locate the note. The information I have gather leads me to believe I allegedly signed this note in 1978.

Last night the CA called to see if I had received the promissory note. They have heard nothing from D of E on their many requests for it.

The CA, some weeks back, offered to settle this issue for half of the interest, all of the principal and none of the collection costs. This amounted to about $3800.

When I talked to the CA last night, I told him it is looking like D of E is going to be unable to prove I am responsible for this loan as they haven't produced the note after all this time. I expressed to the CA my concern that even if D of E elects not to pursue this issue because they can't produce the note, that it may in fact turn up 5-10 years down the road and I would owe that much more interest. I offered to settle for $3000. He said that seemed reasonable but was beyond his authority. He said he would contact D of E today with my offer and call me back tonight.

So that's where it's at right now. I will let you know how it resolves.

I, too, was contacted in January by Collections Agency, FMS, regarding defaulted federally insured student loan (FISL) from 30 years ago... $2,300 borrowed in 75/76... Began repayment in 78... Filed bankruptcy in 82/83 due to very inequitable divorce settlement, and do recall it was uncertain whether student loan had been discharged by bankruptcy. It was all very confusing back then as the laws were changing a every couple years. I paid on the loan all through 10 months of bankruptcy proceedings, but when final dishcarge came through, no indication the student loan had not been discharged. Attorney adivsed me to stop payments but hold on to loan records & pmt. coupon book, and wait to see if I heard from ED. Only thing I received after 83 bankruptcy discharge was a single page loan statement from ED in 84, 20 months after discharge. Statement only showed my name, addresss, loan number and a $0.00 balance... no detail or explanation as to what prompted the statement so long after the fact, & no cover letter or directions of any further action required on my part.. I thought it was confirmation the loan had indeed been discharged. A few months later I relocated to another state and never gave it another thought. I've put myself through hell and a fair amount of expense the past 7 months trying to gain an understanding of how this old debt could be hanging out there in default all these years, totally unbeknownst to me... no notices from ED, nothing ever on my credit report. I kept all records of my FISL until 1990, 7 years past my bankruptcy & final payment and 6 years after that $0.00 balance statement had come (the statute of limitations on student loans at that time). Statute of limitations was apparently removed retroactively in 91, which I did not know until just recently. But can't use that as excuse not to pay, per ED regulations. It is, however, my reason for no longer having any student loan records or cancelled checks to prove anything. I kept my overall bankruptcy file for 27 years & never needed it for anything, so shredded it in 2009. Then comes this call from FMS in January of this year. At first I thought it was a scam call so did not get the name, address or phone number of the CA right then, nor did I catch the what the agent told me was the exact $ amount owing. I now know the remaining amount due at bankruptcy dishcharge was close to $1,200. With 30 years interest & collection costs, balance owing is almost $5,000 now. NSLDS lists my bankruptcy as occuring in 84, not 83 when it actually occurred. ED's Default Resolution website shows very limited payment history, which is neither complete or acurate. No statement of debt was mailed to me by FMS within 5 days after initial contact as their required to do. In fact, no basic written statement of debt came for over 4 months. In a second phone contact 3 weeks after 1st call, and in certified, return receipt letters I mailed FMS in Feb. & again in early June, I requested full debt validation to include copy of original promissory note, payment history, copies of previous default letters mailed to me, and any records ED has relative to my bankruptcy. To date I have received nothing except 2 more standard letters from FMS telling me what would happen if I don't pay. I did, through considerable effort, finally receive a copy of my bankruptcy file last week, which it took the court over 5 months to locate my case number and location of the file at Federal Records Center. It cost me $105 to get a certified copy of the complete file. It, more than anything else has helped me fill in some of the blanks as to time-lines, etc. Much to my surprise, it also included a copy of the original student loan promissory note. Neither the promissory note nor anything in my entire bankruptcy file references the student loan as being non-dischargeable. I've received quite an education on the student loan crisis in America this past 7 months... a crisis I was unaware even existed until being contacted by FMS in January. The numerous ED and other websites have been cumbersome to navigate... basic information on each of them, but to get answers to specific more detailed questions, I've had to spend litterally a couple hundred hours researching. What a fricken nightmare! I'm in a holding pattern right now, trying to decide what to do. I, too, am considering just going for a compromise settlement, simply to put this whole ordeal behind me. I've invested way, way too much time, energy and money in dealing with this only to have not gotten much of anywhere except more enlightened... in particular as to the fact this is just one more aspect of our federal government that's really screwed up to the detriment of the people it's supposed to serve. I may ultimately contact my congressional reps... not so much about resolving my issue, but to put in my 2 cents worth as to why the ED loan system needs to be revamped to include restoring most, if not all, consumer credit protections that have gradually been taken away over the past several decades. I haven't yet registered on this site, but have bookmarked it and will check back to see if there are any further comments on this overall subject. Not sure my comments here will post without registering??? Until today, I have been completely unable to find anyone's story who came close to mine. It's seemed everyone else with old student loan debt knew they were in default. Thank you for sharing yours!

Your bankrutpcy discharge states "all dischargable debts are discharged". Your loan was not dischargeable. Back then you had to be in active repayment for 7 years in order to qualify for bankrutpcy discharge. Your attorney is at fault for not looking up the proper statutues.
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