We Didn’t Anyone Tell Me About My Old Student Loans?

Question:

Dear Steve,

Situation *
In 1974 I took out a Federal School Loan at McMahon Court Reporting School. The school was closed in 1975. I did not think I owed the loan because of school closure and had to endure additional expense to attend a like school 600 miles from my home. I never heard from anyone concerning this loan until 38 years later after I had become disabled and began receiving Social Security Disability.

I was 62. At age 66 my SS Disability converted to Retirement. I filed a TPD Loan Discharge.

Nelnet, the loan servicing company for the Dept of Education denied my discharge because my Disability Award Letter does not have a review date.

Social Security has explained in a letter that there is no review date due to my permanent disability and my age so no review was necessary.

Why does Nelnet insist on a review date before my loan can be discharged?

And why did they wait 38 years to notify me, causing the principal of $3400 to escalate to over $17,000?

Ed

Answer:

Dear Ed,

You ask some excellent questions that only have an unacceptable and ridiculous answer.

The truth is loan servicers often can’t tell an apple from a bird. It sure sounds like some clerk is giving you a process-based answer.

It sure sounds like you should be eligible to make this loan vanish.

There is an easy way and a harder way. You could contact Social Security in writing and ask them for a written response when your next Continuing Disability Review (CDR) date is. They should either say never or seven-years. Either way, you’ll have a review date answer or a spot on some future waiting list.

If the Social Security offset is creating financial hardship, you can ask that the benefits offset is stopped.

Another way to deal with this is to play the administrative process game and see if the loans are eligible for rehabilitation and get them in a current status, then enroll them in an Income-Driven Repayment program and if you don’t have more income or assets you can shoot for the zero dollar monthly payment.

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Here is the bottom line, this is a stupid situation created out of a flawed administrative process. It makes no sense and trying to resolve this is logic is going to be frustrating. However, there are some options.

Sincerly,


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

Damon Day - Pro Debt Coach

Steve Rhode

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