Help us with her student loans!
November 22, 2015 8:26 PM Subscribe
My girlfriend attended a top US private university. In the middle of her undergraduate education, she suffered a stroke that left her with significant written and verbal communication difficulties. Medical and family problems compounded, and she ended up getting kicked out of school for poor grades. Now she owes the university a lot of money...
Fast forward almost ten years. Girlfriend is trying to go back to school, and realizes that she owes the university almost $23,000. Her transcripts, from what I can tell, are essentially held hostage until she pays the university back. She has no savings to speak of right now. To make matters worse, she missed several payments in a row, and now has started to receive some threatening letters from a lawyer representing the university.
So she owes the university something to the tune of 25k. I'm assuming this was financial aid that she is being forced to pay back due to being kicked out of school mid-year.
On the plus side, girlfriend has a good job, one that earns her enough to have a chance of paying back the university over the course of several years. I have some extra money to throw at the problem, too - not enough to pay off the entire debt, but at least enough to see a good lawyer if need be.
So how does my girlfriend get right with the university, free her transcripts, and move on with her life? As far as I can see it, the options are: 1) try to renegotiate a payment plan with the university such that the transcripts get freed up, 2) hire a lawyer and see if we can sue our way out of the debt on the basis that she was kicked out of school due to medical problems, 3) refinance the student loan so that the university gets their money and we get to pay the loan back on more transparent terms...
Are any of the above good options? Any others that we're not thinking of? Thanks!!
Fast forward almost ten years. Girlfriend is trying to go back to school, and realizes that she owes the university almost $23,000. Her transcripts, from what I can tell, are essentially held hostage until she pays the university back. She has no savings to speak of right now. To make matters worse, she missed several payments in a row, and now has started to receive some threatening letters from a lawyer representing the university.
So she owes the university something to the tune of 25k. I'm assuming this was financial aid that she is being forced to pay back due to being kicked out of school mid-year.
On the plus side, girlfriend has a good job, one that earns her enough to have a chance of paying back the university over the course of several years. I have some extra money to throw at the problem, too - not enough to pay off the entire debt, but at least enough to see a good lawyer if need be.
So how does my girlfriend get right with the university, free her transcripts, and move on with her life? As far as I can see it, the options are: 1) try to renegotiate a payment plan with the university such that the transcripts get freed up, 2) hire a lawyer and see if we can sue our way out of the debt on the basis that she was kicked out of school due to medical problems, 3) refinance the student loan so that the university gets their money and we get to pay the loan back on more transparent terms...
Are any of the above good options? Any others that we're not thinking of? Thanks!!
Is this a university that might respond to a publicity campaign arguing that they should forgive the debt? This sounds like a situation where they absolutely should do so, so you could consider whether you might want to try to garner support online to pressure them to do the right thing.
posted by andoatnp at 8:55 PM on November 22, 2015 [2 favorites]
posted by andoatnp at 8:55 PM on November 22, 2015 [2 favorites]
Response by poster: Decathecting, it seems that ACS is the loan provider, but it's a little tough to determine. When my girlfriend missed her payments she started getting correspondence from a lawyer representing the university. She worked out a payment plan, and now, oddly, has been paying this law firm directly. We'll follow up with more clear information tomorrow when we are able to make some phone calls.
posted by chickenandwine at 9:05 PM on November 22, 2015
posted by chickenandwine at 9:05 PM on November 22, 2015
Look into appeal options that would have been in place had she immediately dropped the semester due to her exceptional circumstances. If the debt is for 3 semesters that her health was ok, plan to pay that, she had full benefit. The semester of the stroke & after is where the mercy is most negotiable. The timing is a challenge, but getting a payment plan underway might be the key to the transcript access. Keep talking & work your way up the chain until there is movement. Establish good faith if there has been no payment.
I'm glad to hear she has been able to recover and reclaim a robust life. Best wishes.
posted by childofTethys at 9:10 PM on November 22, 2015
I'm glad to hear she has been able to recover and reclaim a robust life. Best wishes.
posted by childofTethys at 9:10 PM on November 22, 2015
(It's not odd that payments on negotiated debt settlments in the US are made directly to the law firm representing the creditor. It's pretty standard practice for various reasons including but not limited to 1) ease of paying the legal fees from the collected debt and 2) record-keeping for future legal action if the debtor once again stops paying, which is a common risk in debt settlements.)
posted by crush-onastick at 9:10 PM on November 22, 2015 [3 favorites]
posted by crush-onastick at 9:10 PM on November 22, 2015 [3 favorites]
Reading the body of the question more closely, it appears that these may not actually be student loans, but may be some sort of debt that the university alleges she owes directly to them. In order for her to owe anyone money, one (or both) of two things should have occurred: she signed a contract saying that she would owe the money if X occurred and then X occurred, and/or she was sued and either lost or defaulted on the lawsuit. Either way, there should be a lot of paperwork about how this alleged debt came to be, and the circumstances, and the payoff conditions. I think it's worth gathering up all the paperwork she has, dating back to the time the debt was allegedly incurred, and consulting a lawyer. There are lawyers who specialize in educational debt issues. There is no harm in talking to one to find out more about how this alleged debt came to be, whether she actually owes it and to whom, and what the options are.
And until you have a handle on the details, she should consider whether or not she should be sending checks to a random law firm that called her on the phone threatening her when she doesn't understand what she owes and to whom and whether or not the law firm is actually paying the debt. There are scams that involve people claiming to be collecting debts, and actually they just pocket the money and you still owe the debt. She should make certain she is not being scammed. It may be possible to make payments to a law firm, but depending on what information she actually has about the debt right now (and it sounds like, at least, you don't know, and it's not clear based on your question whether she knows), it could be that this law firm is actually paying down the debt, or it could be a scam, or the law firm could be fake, or there could be some resale of debt issue that she needs to understand. She should know who she is paying and how they came to be the payee and how much she owes and how the payments she's making are being applied.
IAAL, IANYL, IANACivil/EducationL, TINLA
posted by decathecting at 9:16 PM on November 22, 2015 [19 favorites]
And until you have a handle on the details, she should consider whether or not she should be sending checks to a random law firm that called her on the phone threatening her when she doesn't understand what she owes and to whom and whether or not the law firm is actually paying the debt. There are scams that involve people claiming to be collecting debts, and actually they just pocket the money and you still owe the debt. She should make certain she is not being scammed. It may be possible to make payments to a law firm, but depending on what information she actually has about the debt right now (and it sounds like, at least, you don't know, and it's not clear based on your question whether she knows), it could be that this law firm is actually paying down the debt, or it could be a scam, or the law firm could be fake, or there could be some resale of debt issue that she needs to understand. She should know who she is paying and how they came to be the payee and how much she owes and how the payments she's making are being applied.
IAAL, IANYL, IANACivil/EducationL, TINLA
posted by decathecting at 9:16 PM on November 22, 2015 [19 favorites]
Information about how to find an attorney (including for consumer rights) is available at the MeFi Wiki Get a lawyer page.
It's not clear from your question or update about whether the loans are federal, or private, or both, but it may be helpful to review information about Income-Based Repayment Plans and getting out of default for federal loans, as well as getting out of default for private loans.
posted by Little Dawn at 9:21 PM on November 22, 2015 [1 favorite]
It's not clear from your question or update about whether the loans are federal, or private, or both, but it may be helpful to review information about Income-Based Repayment Plans and getting out of default for federal loans, as well as getting out of default for private loans.
posted by Little Dawn at 9:21 PM on November 22, 2015 [1 favorite]
For so many reasons, your extra money is better spent on a lawyer rather than trying to negotiate this directly.
posted by jbenben at 9:32 PM on November 22, 2015 [6 favorites]
posted by jbenben at 9:32 PM on November 22, 2015 [6 favorites]
(If they're Perkins loans, they would be made directly by the University.)
posted by listen, lady at 3:35 AM on November 23, 2015 [1 favorite]
posted by listen, lady at 3:35 AM on November 23, 2015 [1 favorite]
If these aren't federally guaranteed student loans I'd look into bankruptcy.
Then I'd pretend that year and a half never happened and just enroll in a 2-year college to easily make up those credits, then transfer to a 4-year university to finish the degree.
Ask yourself, 'are 36 credits worth $25,000?' As a person who took 7 years to get my undergrad degree, I posit that they are not.
posted by Ruthless Bunny at 4:18 AM on November 23, 2015 [2 favorites]
Then I'd pretend that year and a half never happened and just enroll in a 2-year college to easily make up those credits, then transfer to a 4-year university to finish the degree.
Ask yourself, 'are 36 credits worth $25,000?' As a person who took 7 years to get my undergrad degree, I posit that they are not.
posted by Ruthless Bunny at 4:18 AM on November 23, 2015 [2 favorites]
Ruthless Bunny, private student loans (if they are, in fact, student loans) are also not dischargeable in bankruptcy (unless you are permanently and totally disabled, same standard as for federal loans). It's one of the special perks the big banks wrung out of Congress a decade or so ago.
posted by decathecting at 5:30 AM on November 23, 2015 [3 favorites]
posted by decathecting at 5:30 AM on November 23, 2015 [3 favorites]
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posted by decathecting at 8:49 PM on November 22, 2015 [4 favorites]