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Sending a DV to the Dept. of Education???

Valued Member

Sending a DV to the Dept. of Education???

Can I send a DV to the U.S. Dept. of Education?  I will make this as short as possible.  Around 1986 I took out a student loan ( original principal 3,656.72).  In 1996 I consolidated the loan (4,938.50).  on 02/14/03 my employer received an Order Of Withholding From Earnings (wage garnishment) from USA Funds through GC Services to withhold 10% of my earnings for the amount 8,990.14.  For 2 years my wages were garnished.  On 03/24/05 USA Funds through GC Services sent a Release Of Order Of Withholding From Earnings letter stating " From and after the date of this release, the employer is no longer required to withhold income from the debtor's pay."  I was under the impression that this was over, until May of this year when I noticed that Diversified Collection Services conducted a hard pull on my CR, saying they had pp.  I sent them a pp letter, they never replied until the BBB contacted them on this matter.  They said they are working for US Dept. of Education, they also sent along a copy of my signature on the consolidation form loan, and a history printout of payments, but no where on this printout does it reflect the 8,990.14 that was garnished.  I called the dept., and they are saying they bought the account from USA Funds in 08/28/06 (1year, 5months, and 4days) after the last letter to my Employer.  Today I was sent a letter from the dept. of education saying "If, after reviewing this account history, you believe ED has not credited one or more payments to your account or that your balance is otherwise incorrect, please send us proof that supports your dispute".  The account history is a computer printout, and does not in any way reflect the money that was garnished.  With all that said, can I dv the dept. of education on this matter, or what should I do?  And if so, is there a sample letter around to go by.  All suggestions are welcome.  Oh before I forget, this was on my CR, but after the garnishment was paid, it was off.

Starting Score: 689/693
Current Score: 689/735
Goal Score: 720/720


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Message 1 of 5
4 REPLIES
Frequent Contributor

Re: Sending a DV to the Dept. of Education???

 
 
Ok...to me it sounds that a release of garnishment was done too early. 
 
Ed subrogated the account from USAF.When this occurs, your payment history from USAF does not transfer over to ED so the argument on making paymnets to ED holds no water since they did not administer the original garnishment. 
 
Have you done any calculations as to how much was actually garnished from your wages?  How much do you owe now?  Interest would have continued to accrue during your garnishment period so if just the original $8990 balance quoted was paid, you definately would still have a balance.  At the time your garnishment started, you were probably accruing interest at a rate of about $60/month or more...and that is taking a guess at a 1996 consolidation insterest rate of 8%.
 
ED will argue that a garnishment release is not a paid in full letter.  They will place the onus on you for not keeping track of the balance with USAF.
 
What you need is a detailed payment history from USAF.


Message Edited by LynnInMN on 09-05-2008 04:41 AM
Ex-Financial Aid Officer

Ex-Student Loan Collector
Message 2 of 5
Valued Member

Re: Sending a DV to the Dept. of Education???

8,990.14 was actually garnished from my wages, they are saying I owe 696.43 (principal) 202.39 (interest) total 898.82.  Why would it take 3 years for someone to contact me in regards to this matter?  If I still owed on this account why USAF didn't contact myself, or my employer saying this account still has a balance?  Thank you very much for your response on my matter, it does give me some direction.  So, I need to contact USAF and get a detailed payment history, correct?

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Current Score: 689/735
Goal Score: 720/720


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Message 3 of 5
Moderator Emeritus

Re: Sending a DV to the Dept. of Education???

First off, DVing is allowed by the FDCPA and that states only CAs can be DV'd. So, the Dept of Ed can't be DV'd but GC Services could have, for example.
 
The best way to handle any OC is to simply write them with your request. Since you already gained contact with them, I'd do as they requested and send proof of payment. The Dept. of Ed isn't known for cheating people, if you know what I mean.
 
As Lynn mentioned, maybe the CA (GC Svcs) ended their collection process early. It is possible GC was under a contract for a finite amount of time. Maybe there is a paperwork error somewhere.
 
I'd send the Dept. of Ed copies of payments and a copy of the release order and put the ball in their court.
Message 4 of 5
Valued Member

Re: Sending a DV to the Dept. of Education???

Thank you very much for your quick response.  I will do just that.  Thank you as well LynninMN for your expert opinion.

Starting Score: 689/693
Current Score: 689/735
Goal Score: 720/720


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