New York State Higher Education Services Corporation Wants Student Loan Money From Me


Dear Steve,

In 1994 I filed bankruptcy in Federal Court. Included was my student loan (Sallie Mae) All debts including student loan were discharged. Five years later New York State Higher Education threatened me with prison, garnishment and repossession if I didn’t rehab the original loan. I’ve sent them several copies of the bankruptcy. But no avail

My student loan bankruptcy was discharged in 1995. I’ve been threatened with prison, garnishment, and repossession if i did not rehab the loan. Apparently the loan has gone to the treasury department, and NYSHE is trying to collect on the loan. They have been given 4 different copies of the discharge, yet they still harass me. What can I do to get this off my back and to clear up my credit report



Dear Charles,

It appears the New York State Higher Education Services Corporation is a federal loan servicer.

I’m going to try and pull up my bankruptcy knowledge from back then but you should absolutely confirm my recollections with a bankruptcy attorney who is licensed in your state.

As I recall, back then, a federal student loan could be discharged in bankruptcy if it had been in repayment for at least seven years or if the court determined the repayment would be an undue hardship.

Simply including a federal student loan in a bankruptcy back then in 1994, without filing any additional court procedures, would probably not have discharged it.

Before 1976, federal student loan debt was fully dischargeable without any additional requirements. That changed in 1978 when federal student loans were made dischargeable in some situations.

My opinion is your loans may not have been discharged but that does not mean there are not things you can do now. If you are sued over this debt you can attempt to negotiate a settlement at that time, you could always rehabilitate the loans and enter an income driven repayment plan, or you could file another bankruptcy and attempt to have the loans discharged using an Adversary Proceeding if the repayment of the loans is an undue hardship.

See also  This Student Loan Bankruptcy Discharge May Change the Lives of Student Loan Debtors

I would certainly urge you to confer with a licensed bankruptcy attorney in your state.


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Steve Rhode

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