Thursday, March 24, 2016

A Story of Student Loan Hell

Occasionally I receive emails from people who have read the blog wanting to share their stories or objecting to what I wrote about their case.    They are a poignant reminder that the legal issues we deal with affect real people.   When I write about a case, I am writing about the facts as found by the Court.   The story that comes out of the official court record may be very different from how the individuals involved saw it.   Today I received an email from a woman who offered to share her story about her 30 year ordeal with student loans.   I am reprinting it below as received except that I explained some of the abbreviations she used.  While I can't vouch for the accuracy of the account, I do believe that she is describing how it looks to her.   Here is a story of student loan hell from Florida:

Dear Bankruptcy Attorney:
I'm in Florida but all bankruptcies are thru the Federal court system.  I have old student loans (taken out 1981-1983) for a total of $8,000 at 9% interest ($720 per year for 10 years) thru the GSL program (which was not Stafford at the time).  The promissory note (“PN”) said the Department of Education (“DOE”), my bank and I had to be in agreement if the note was to be changed.  The PN said (on the back) that the loans even if not repaid in full should not go past 15 years in repayment.

The school I attended, Garfield Senior College (“GSC”), was for the final 2 years of schooling, but since we were full time employed business people GSC said in their catalog they wanted us to do this schooling over 3 years instead of 2, thru night school.  When I got down to the end of the schooling I still had 2 "required" courses to take but they weren't offering them, and to my knowledge never did at that time, then the school closed in 1985 before I could get those two courses. In 1984 I found myself without employment ("work at will" laws here) and so when in Dec. of 1984 I was hit with a repayment booklet I did not reaffirm repayment of my student loans, but attempted to make a few payments even though I had not graduated yet.  The main school (a separate entity they said) called Lake Erie College said to take a miscellaneous course (only one) then they would say I graduated anyway, and they gave me "their" sheepskin from Lake Erie College by mail.
While I was waiting for the required courses to be scheduled, and while I was unemployed I requested a deferment and I think I got 3-6 months (can't remember which) prior to graduation, prior to finishing school. Then the school closed.  I had made $590 in payments and while working for an attorney I went bankrupt for the purpose of discharging the student loans, and for paying my ex's truck.
So in 1990 I filed for chapter 7 and it was discharged (my boss signed off on the Ch 7), leaving the student loans.  My attorney boss said to file an adversary proceeding to file for undue hardship which I did. The judge wanted an attorney to represent me for the undue hardship and I hadn't the money to do that.  My boss suggested I do a Chapter 13 for repayment of the student loans so there would be an eventual end to them, but the OSLC/DOE attorney stopped attending the hearings after he said DOE disapproved of my repayment plan.  The case is still able to be revisited if an attorney represents me.
In the meantime I've made a total of $30,272.88 in payments on that total of $8,000 loans and have had over time 10 collectors, the DOE defaulted me (which I believe was in error), and even though I've been disabled, on welfare and now retired the DOE has taken thru their aggressive ECMC collector during this past 15 years money which they call "income" and which the government calls "benefits" an amount of 15%, now at $200.55 a month thru offsets of the IRS, the SS disability and now SS retirement.  So it's been in collection for about 27 years now.
I've tried for a disability discharge but they wanted a doctor's signature and I was unable to get any doctor to re-do an MRI so it's current so they could determine on it.  You'd think they would trust the federal SS court judge's opinion and that of the federal government's doctors, but ECMC/DE refused.
A couple of years ago ECMC told me I still owed over $4,000 and said they wanted to charge me an additional $1,000 for their services if I wanted to apply for forgiveness.  I said "but I've been paying ECMC a LOT of money over the past 15 years already.  They said the forms (which didn't fit my situation) required 2 people they could contact if I defaulted again, and they wanted my bank account number.  I backed out because they were attempting to screw me again.
The DE has stopped the ombudsman group and ECMC from responding to me. So I got on the phone and asked to talk with the attorney at ECMC and got her assistant who asked why my loans were defaulted, and I said in a letter from the DC years ago they specifically said it was because I fell to half time, but since I was not a full time student I couldn't have fallen to half time.  I was a part time student and that was all that was required of me.  She said I could "dispute it."  So I sent in a "dispute" with pertinent backup October 3, 2016. ED's rules say for a dispute they will respond in 30 days.  I sent the letter to ECMC and got ahold of my Senator's office (who has by the way dropped the ball).
On the 17th of October I again phoned the attorney's office at ECMC asking why they refuse to follow the Department of Education's policies.  I was told by the assistant in the legal department that the loans are not dischargeable, that falling to half time didn't matter (even though that was the reason the DOE defaulted me they said), and that she will get to reviewing the entire 35 years of my loans and get back with me.
I owed only $8,000 plus $7,200 in interest, but have paid $30,272.88 and so now am in debt over $11,000 and I need my money and I feel that my loans should never have been defaulted because I couldn't finish schooling because the school was winding down then closed.
Now I come to find that loans prior to 1986 have fallen thru the cracks and nothing in the laws have helped us to solve, discharge, or end what pain the government has done to me.
They stopped me from going for an MBA, they lost me jobs, they contacted my employers, and they led me astray continually over the years and cost me thousands to try and solve these loans, and they and I took on the cost of warehousing our files on this matter, and how many support people's time I've taken up to try to solve this matter has surely cost the government in wages, plus postage, and transportation costs, and being on welfare for years, and being disabled with tremors, and inability to hire an attorney, well I want the $15,072.88 back that they owe me from overpayment.
ECMC finally said Oct 17 that they are not going to return my student loan case back to the DOE (they refuse to).  When I had problems I'd contact the DOE and they sent me to solve it with ECMC, and then ECMC would tell me to solve it with the DOE, so it's been a vicious circle for the 15 years it's been with ECMC.  Finally DE instructed that no one talk with me.
I want to know why the federal government has let us who have loans out prior to 1986, fall thru the cracks.  We can't afford attorneys as we're disabled and on welfare and government benefits.  As far as I'm concerned I've paid my debt 4 times already and they say I still owe $1700.  I want them to pay for the $11,000 debt I've incurred to live while they stole my $15,072.88.
There aren't even any government forms for us whose school closed in 1985 (and we didn't finish, even though we received a degree from another school in their stead).  There is no one but congress who could solve this and we can't reach congress to get that done.  Our president Obama continues to help out students with later loans but neglects the rest of us.
Thanks for listening.


Marc Goldbach said...

I can't believe that they call her employer and she lost her job. Instead of resolving her debt by staying on the job that she worked. It's really a nightmare, I feel bad for her. Many will get a lesson from your experience. For sure looking for the right job is very hard for her. Sometimes bad luck happens to us but I hope you find your way out on this mess.

jack wilson said...

As a Newbie, I am always searching online for articles that can help me. Thank you

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Bookmark Butterfly said...

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Laura | Dutch insolvency law said...

Interesting story, good to hear it from the other side.