28 year old paid federal student loan now in collection

[Frannieb]

28 years ago I applied for an $800 federal student loan to attend a state college in MA. Shortly after graduating, it was paid off and I hadn't given it a second thought since. Yesterday, more than 25 years since I mailed my last payment, I received a letter from the college stating that a review of their records show that my loan is unpaid. It also stated that my loan was sent to University Accounting services for collection and will be reported to the credit agencies. They apologize for the late notice and because of that, I would not be responsible for any interest since 1987 but will be responsible for interest from this point forward. At first I thought it was a scam but a copy of the note I signed in 1986 was enclosed. I understand that there is no statute of limitations for federal student loans, but because I paid my loan and had no indication for more than 25 years that there even was an issue, I did not think about saving cancelled checks from that far back. My bank from that time period no longer exists. I have absolutely no proof that I paid this loan. Why would I? I, like most people, do not save financial records for more than 25 years. Shouldn't the bookkeeping dept be investigated? What happened to my payments? How can it take more than 25 years to notify someone that there is a problem? I already pulled one credit report and it's not there yet. I will check again next month. I plan to wait and see what happens next. Is it a scam?

I believe that in the end, I will be forced to cut a check for the $800+ so that my credit score isn't jeopardized. $800 may not seem like a lot to some, but it is to me and I already paid it. Has this ever happened to anyone? Is there anything I can do besides paying it? This is so aggravating.

 

[single317dad]

Sorry to hear you're being pursued by a creditor you've already paid in full. That's never any fun, and can be difficult to resolve.

Have you talked to the institution yet? If so, what was the result?

If you weren't satisfied with the result of a conversation with the college, have you asked to speak to someone else?

The US Department of Education's debt collection service can be reached at 1-800-621-3115 if you wish to try to verify whether this loan is actually in collections or you're being targeted for some kind of scam.

What state do you currently live in?

If you really are being pursued for payment on an old loan, you'll be wise to consult with an attorney.

I would strongly encourage you to try to recover your records of payment if there really is a case. If your bank was bought or absorbed by another institution, contact the new bank. It is wise to keep records of certain transactions for the rest of your life; unfortunately, this may be one of those.

Research "Laches", a defense which centers on unreasonable delay.

 

[LdiJ]

28 years ago I applied for an $800 federal student loan to attend a state college in MA. Shortly after graduating, it was paid off and I hadn't given it a second thought since. Yesterday, more than 25 years since I mailed my last payment, I received a letter from the college stating that a review of their records show that my loan is unpaid. It also stated that my loan was sent to University Accounting services for collection and will be reported to the credit agencies. They apologize for the late notice and because of that, I would not be responsible for any interest since 1987 but will be responsible for interest from this point forward. At first I thought it was a scam but a copy of the note I signed in 1986 was enclosed. I understand that there is no statute of limitations for federal student loans, but because I paid my loan and had no indication for more than 25 years that there even was an issue, I did not think about saving cancelled checks from that far back. My bank from that time period no longer exists. I have absolutely no proof that I paid this loan. Why would I? I, like most people, do not save financial records for more than 25 years. Shouldn't the bookkeeping dept be investigated? What happened to my payments? How can it take more than 25 years to notify someone that there is a problem? I already pulled one credit report and it's not there yet. I will check again next month. I plan to wait and see what happens next. Is it a scam?

I believe that in the end, I will be forced to cut a check for the $800+ so that my credit score isn't jeopardized. $800 may not seem like a lot to some, but it is to me and I already paid it. Has this ever happened to anyone? Is there anything I can do besides paying it? This is so aggravating.

This doesn't make sense. Why would a college contact someone about a federal student loan? Federal loans are used to pay colleges and colleges have nothing to do with collecting on those loans. I could see a college having a copy of your original application if a financial aid advisor helped you apply for the loan, but again, they would not be the ones collecting on the loan.

I would try contacting the college, but NOT using any telephone numbers provided on the letter, but using numbers obtained from other sources to verify that this is real and not some sort of scam.

 

[Frannieb]

The letter from the college indicates that the review of their records was conducted with the assistance of the UAS and US dept of Education. The letter indicates tha UAS will contact me. I just received the letter Friday so have not called anyone. When I receive further communication, I will call the college first. I did reach out to the bank that bought out my old bank. I'm not optimistic but hopeful that they have old records. Lesson to everyone, when it comes to federal student loans, keep everything, no matter how old it is. My kids are in the midst of enrolling in college and applying for loans and it makes me sick to know we can pay off everything and then after 30 years, they can be called on it to pay again. I will save all of their records and advise them to do the same. I will also demand written notification upon full payment. I was young and stupid and didn't demand anything back then. I was preoccupied with planning a wedding and purchasing a home and was just happy to make the last payment and be debt free at the time. Other than store credit cards, this was the first real bill I had and it really didn't dawn on me to ask for a discharge letter. Lesson learned.

 

[Mark Maroon]

This doesn't make sense. Why would a college contact someone about a federal student loan? Federal loans are used to pay colleges and colleges have nothing to do with collecting on those loans. I could see a college having a copy of your original application if a financial aid advisor helped you apply for the loan, but again, they would not be the ones collecting on the loan.

I would try contacting the college, but NOT using any telephone numbers provided on the letter, but using numbers obtained from other sources to verify that this is real and not some sort of scam.

I agree with LdiJ. It doesn't make sense that the college would contact you about an unpaid federal student loan. You should contact the college, but NOT by using any telephone numbers provided in the letter, to see if they can verify this debt and that someone associated with the college sent you the letter. Also, as suggested by single317dad, you should contact the US Department of Education's debt collection service at 1-800-621-3115, and see if they can verify this debt.

If it turns out that nobody can verify that this debt exists, then you should send copies of the letter to the college, the US Department of Education, and the FTC so that they can possibly investigate this scam - and the potential leak of presumably confidential financial information (ie. the copy of the note that you signed in 1986).

 

[Mark Maroon]

The letter from the college indicates that the review of their records was conducted with the assistance of the UAS and US dept of Education. The letter indicates tha UAS will contact me.

What is the "UAS"?

Does the letter suggest that you contact anyone or do anything? Or is the letter only "informational" with the indication that the "UAS" will contact you?

 

[Frannieb]

What is the "UAS"?

Does the letter suggest that you contact anyone or do anything? Or is the letter only "informational" with the indication that the "UAS" will contact you?

UAS is University Accounting Services, a collection agency.

 

[Mark Maroon]

UAS is University Accounting Services, a collection agency.

The names "UAS" and "University Accounting Services" are VERY generic names. It is common for scammers to provide realistic sounding names that cannot be independently verified because they are too common or vague. There is an actual "University Accounting Services, LLC" that uses the web site www.uaservice.com, so it's certainly possible that this is who they are referring to.

Did they provide any contact information for this supposed "UAS / University Accounting Services"? Like an address, telephone number, or web site that matches up with the actual entity "University Accounting Services, LLC" that is using the web site www.uaservice.com?

Did they provide any other address or telephone number that you are supposed to contact about this supposed debt?

 

[Frannieb]

The names "UAS" and "University Accounting Services" are VERY generic names. It is common for scammers to provide realistic sounding names that cannot be independently verified because they are too common or vague. There is an actual "University Accounting Services, LLC" that uses the web site www.uaservice.com, so it's certainly possible that this is who they are referring to.

Did they provide any contact information for this supposed "UAS / University Accounting Services"? Like an address, telephone number, or web site that matches up with the actual entity "University Accounting Services, LLC" that is using the web site www.uaservice.com?

Did they provide any other address or telephone number that you are supposed to contact about this supposed debt?

Yes they provide the number that is also shown on the UAS website. I do not plan to call anyone until/if I receive additional communication. This letter was sent via regular mail and for now I am not going to acknowledge receiving it. In the meantime I am contacting my old bank to see if records from 25 years ago are accessible.

 

[Frannieb]

My bank saves no records beyond 7 years so I have no proof of payment other than my memory. Waiting it out to see if I'm contacted or if it gets added to my credit report and will update the post with any outcomes. I was hoping that this has happened to someone before. Thanks for the advice.

 

[csi7]

Do. Not. Pay. Any. Funds. Do. Not.

There are way too many red flags on this issue. First, statute of limitations on OLD DEBTS ... so debt collectors who buy up bad debts are restarting the clock IF the person they're attempting to coerce into paying starts negotiating or otherwise reset the clock.

Any communication should be in writing ONLY. Keep copies of everything. The debt collector can be required to show you physical evidence of the actual debt. In other words, they must prove their case, from the original debt.

 

[Zigner]

Do. Not. Pay. Any. Funds. Do. Not.

There are way too many red flags on this issue. First, statute of limitations on OLD DEBTS ... so debt collectors who buy up bad debts are restarting the clock IF the person they're attempting to coerce into paying starts negotiating or otherwise reset the clock.

Any communication should be in writing ONLY. Keep copies of everything. The debt collector can be required to show you physical evidence of the actual debt. In other words, they must prove their case, from the original debt.

Federal student loans have different rules. There is no statute of limitations for federal student loans.

 

[Frannieb]

I have an attorney friend looking into it for me but I expect I'll be paying it. It made the local news and 1900 other people got the same letter. It just stinks because I made all of my payments from a payment book and believe I already paid this. I had no reason to keep cancelled checks from 25 years ago so have no way to prove anything. Even though there is no statute of limitations on federal student loans, there should be some limit as to when you have to notify someone. It's not fun getting an unexpected bill. I absolutely believe people should pay their loans. I just think notifying someone after 28 years is ridiculous. Warning to anyone taking a federal student loan. Save all your records!! Who knows when they'll claim you owe something and it would be nice for you to compare your records with their information. I'm supposed to trust that after 28 years their information is now accurate. There is a problem with this system.

 

[LdiJ]

I have an attorney friend looking into it for me but I expect I'll be paying it. It made the local news and 1900 other people got the same letter. It just stinks because I made all of my payments from a payment book and believe I already paid this. I had no reason to keep cancelled checks from 25 years ago so have no way to prove anything. Even though there is no statute of limitations on federal student loans, there should be some limit as to when you have to notify someone. It's not fun getting an unexpected bill. I absolutely believe people should pay their loans. I just think notifying someone after 28 years is ridiculous. Warning to anyone taking a federal student loan. Save all your records!! Who knows when they'll claim you owe something and it would be nice for you to compare your records with their information. I'm supposed to trust that after 28 years their information is now accurate. There is a problem with this system.

If 1900 other people also got a similar letter then I feel even more strongly that this could be a scam of some sort. Think about it? It would be weirder than heck for a single student loan to pop up 28 years later as legitimately unpaid. What are the odds that their would be 1900 of them?

 

[Frannieb]

If 1900 other people also got a similar letter then I feel even more strongly that this could be a scam of some sort. Think about it? It would be weirder than heck for a single student loan to pop up 28 years later as legitimately unpaid. What are the odds that their would be 1900 of them?

Definitely not a scam, just ridiculous. Fox News interviewed the college and the school is on the hook for all the interest from all those loans. I guess there was an issue between 1984 -1990. I am waiting to see what my friend tells me to do.