Need Help. University of Southern California Alum

[Anonymous]

Hey Guys,

   Ok, so I graduated from USC in 2013. Then I get a call from the collections office saying my 2012 financial aid was reversed due to parent SS # being incorrect. Which is weird because I went to school in 2013. Anyway, they are saying if I don't pay the 13k that was reversed it is going to go to collections by Friday. What should I do? There is a institutional loan through USC, called the Reilly Loan that I can do or should I take out a personal loan, pay it all in full and have a little extra to pay down bills, credit cards, etc. I have 665 EQ, 661 TU and 645 EX. I make only 45k a year. I've been at my job ever since graduation, which would be approx 1 year and 3 months. I have two collections, but am disputing one and the other I will pay. Only 300 dollars. AAoA is about 3 years.

Any help is appreciated. Thank you so much

[Luscher]

I would ask for something in writing

[Anonymous]

What exactly should I get in writing? The debt they are supposing I owe? Also, it needs to be repaid or in a payment plan by this Friday.

Thank you for your response

[SCF]

Did you graduate in Spring 2013?  That aid might have been awarded in Fall 2012 for both semesters, hence why they would be calling it "2012" aid.

Have you spoken to the school's financial aid office directly?  What type of aid was reversed?  Was it a Pell Grant?  Some type of grant directly from the school?  Do you still have the paperwork documenting how you covered the costs for the 2012-13 school year?  If you can, I would make an appointment with the financial aid office and visit in-person with that paperwork.  Ask them what items are being reversed and why.  It's fairly unusual for schools to backtrack on aid this far down the line, but it may have been federal money and those do build in quite a bit of time to take them back if the student is found to be ineligible.

Did you speak with a collection agency or the school's finance office on the phone?  I would call the school's finance office, let them know you have made an appointment with financial aid, and that you intend to make this right as soon as you can sort out exactly what happened and what your options are.

[Anonymous]

I graduated in May 2013, so yes, the spring semesteer.I spoke to financial aid, financial services and collections. The aid that was reversed was a stafford loan loan. This was because of a parent information error. I contacted FAFSA but they informed me that it is too late to make a amendment to a aid year that far in the past. I spoke with the collections office but they are firm that if some sort of arrangement is not in place (payment in full or signing promisory note for institutional loan) they will send the account to collections on Friday. So should I take out a personal loan (will I even be approved for one - info is in original message) or should I do the insitutional loan and make payments monthly.

Thanks for responding!

[SCF]

What are the terms on the loan through your school?  If they are fairly close to the original loan, I would just go ahead and refinance the amount with that program.  Personal loans are probably going to have shorter repayment terms and higher interest rates than a loan directed specifically at students for education costs.

I would push the financial aid office a little to show you the mistake that was made, why it was not caught sooner, and the rules that specifically apply in this situation that prevent you from correcting it and maintaining your eligibility for the loan.  The whole thing seems a little odd, but federal programs can have very strict rules that work like this.

[Anonymous]

Update: My Institutional loan through USC was approved on Friday. Unfortunately the Interest rate was 10% but my account is now current and not in jeopardy of going to collections. Thank you all for your advice. Hopefully, I can save up enough and end up just paying the balance, but for now, my monthly payment is 108 dollars.

Thank you!