Re-ID'd and Defaulted

[Anonymous]

I signed up for federal student loans when I enrolled in school a few years ago while a stalker was destroying my life.  In the middle of my first semester, I had to leave the state without identification while federal/state/local agencies gave me a new one.  This process took about 6 months just for a new driver license and social security number/card to be issued so I could prove my identity and get a job (the way they protect victims and witnesses on television is NOT how it really happens).  It would probably have taken much longer but I wrote my senator and he was able to "make some calls" which helped immensely.  My university, however, had no way of dealing with the crime or its implications and I was simply told to walk away to take care of the more pressing safety/survival issues - perhaps because they already had their tuition money.

Now, it's a couple years since all that happened and I am just about done getting accounts back in order, etc.  My only outstanding financial issue (other than never having enough money) is that of the student loans even though it's one of the first I started on - neither the lender nor the guarantor had any process of dealing with this kind of issue, and both fumbled around until the lender decided to cut its losses and report a default as soon as I sent them everything with my new information on it.  

I had acted in good faith to get this resolved, and neither party would have known what had happened unless I came forward.  Now that's in default, all parties are refusing to cooperate, acting as though I am some deadbeat/criminal for not doing anything even though the information was "processing" for well over a year.  Recently, I heard about the Ombudsman with the Dept. of Education, but over several conversations I can't seem to get a firm answer (other than a lecture about personal responsibility) from anyone.  The best answer I've gotten so far is that I may be able to rehabilitate my loans, but that program has been suspended due to the economic crisis.

While trying to get things straightened out, my credit scores have dropped an average of 124 points due to a reported default.  So, I may end up declaring bankruptcy if rates start changing on me, as I haven't really had much time to rebuild an emergency fund after the turmoil.  I worked really hard to get this far - does anyone know another resource to tap that can get this straightened out?  I can't afford an attorney, and no one is willing to work for free in this environment - I've heard so many awful stories about how student loans are treated in court that I'm not even sure it would be worth it.  This is a real shot in the dark, but I'm open to ANY suggestions (and yes, I already wrote my senator asking for help in this issue, as well).  I almost wish I'd never said anything, but I really want to go back to school!

Some lessons I've learned in the process:

#1 - Get a background check on every one you date.  There is no such thing as "too much information".

#2 - Don't get entangled in government benefits, including guaranteed student loans, if you have ANY other pending business with ANY government agency at ANY level...except taxes, of course.

Thanks 

[LynnInMN]

When I was working as a financial aid officer, I had a student go thru something similiar.  Unfortunately, there is no recourse for the student loans....there just are no provisions. The student in my case, ended up suing the other party and recovered her funds civilly.

Bankruptcy wont help...student loans are non dischargable in bankruptcy.

Rehabilitation has NOT been suspended, except for the Texas guarantor.  There is always consolidation....that will get you out of default quickly.

[Anonymous]

Well I would have sued but the other party had no "real" money and turned out to be involved in insurance fraud.  Also, I am in Texas, so rehabbing isn't an option at this point.  Having spoken with the Dept of Ed Ombudsman, consolidation would take care of the balance and get TGSLC off my back, but there would still be a default on my credit report.  This is what I'm trying to avoid - I am at a point where I can pay the debt easily, but the report of default poses a huge threat to my ability to stay financially sound and repay anything at all.

I am considering a DV, because there are no documents that explicitly link my new ID info to the old debt.  There's a name change order with my old social security number on it, and then a letter from the SSA stating that a number has been assigned to my (current) name.  It never states that I've been assigned a new number or that it replaced my old one, which is why I'd be free and clear if I hadn't said anything in the first place.  I wonder if that would at least keep the wolves at bay.  What do you think?  Again, I'm not trying to skip out on a debt, but I do believe extenuating circumstances should be taken into consideration regarding repayment.  Thanks for your input!

[LynnInMN]

You will never be free and clear of this...and delaying paying it is only going to make matters worse with accrued interest and penalties.   These are governement loans.....eventually they will cross reference you and your SS number change will come up and name changes are public information since they are filed with the court system. Yes I agree you have extenuately circumstances, but the loan holder is party to it. The only way you will get any relief is if the school agrees to give you a refund.....but I can assure you that the loan holder won't. 

[MattH]

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@LynnInMN wrote:
You will never be free and clear of this...and delaying paying it is only going to make matters worse with accrued interest and penalties.   These are governement loans.....eventually they will cross reference you and your SS number change will come up and name changes are public information since they are filed with the court system. Yes I agree you have extenuately circumstances, but the loan holder is party to it. The only way you will get any relief is if the school agrees to give you a refund.....but I can assure you that the loan holder won't. 

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I would suggest original poster try to get local TV or newspapers interested in this case, because it sounds like standard legal mechanisms offer little hope.  In such cases, the best option may be get sufficient publicity that somebody with substantial clout gets involved, cause it's gonna take major clout to make bureaucrats budge.

[LynnInMN]

OP was a stalking victim....I really doubt she wants to media attention.

I spoke with my old office mate at the university I used to work at.  What happened to the OP comes under "life circumstances." and fits in the same classification as a divorce, unplanned or difficult pregnancy or financial hardship.  Nobody plans on their marriage breaking down, or the condom breaking or the economy failing.  It may not be the borrowers fault, but it is also not the schools fault either.  Schools would go bankrupt if they refunded for every "life event" that caused a student to withdraw. 

[MattH]

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@LynnInMN wrote:

OP was a stalking victim....I really doubt she wants to media attention.

I spoke with my old office mate at the university I used to work at.  What happened to the OP comes under "life circumstances." and fits in the same classification as a divorce, unplanned or difficult pregnancy or financial hardship.  Nobody plans on their marriage breaking down, or the condom breaking or the economy failing.  It may not be the borrowers fault, but it is also not the schools fault either.  Schools would go bankrupt if they refunded for every "life event" that caused a student to withdraw. 

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It's too bad the same Federal Government that can afford a bazillion dollars to bail out reckless financiers cannot find a way to help innocent victims in situations like that of this person!