I am fairly new in this student loan thread, but after reading multiple threads.. I've finally gotten the courage to post a question and take steps to fixing my student loans.
Long story short, I received a student loan ($5000) through my school's FinAid that would cover my Spring2016 semester. I was taking some classes as a part time student and dropped a one credit course. This resulted in FinAid reducing my student loan amount b/c I did not qualify as part time anymore. I understood that portion.
During that time, I used the rest of my loan money ($1700) for a laptop and a important entrance exam fee for professional school.The following week, my school dropped my classes and I was no longer able to attend. My FinAid said I owed them that $1700 and need to pay them back. At the time I wasn't working because I was studying for an entrance exam. I ended up not paying the school thinking I can pay them back as soon as I get a job after my test. What I thought was a genius plan at the time.... totally BACKFIRED on me. I check my school account and it indicated that my student loan was sent to collections!
I wasn't even aware that it was sent to collections until I received one random letter in the mail from a CA. I thought it was odd that the balance I owed was $1700 and now that it was sent to collections.. the balance owed is $5000+. Can the interest rates increase that much ?!?!
Now I'm in a dilemma.. my school cannot send my transcripts out to professional school until my loans have been paid for. Application cycle for the professional school I want to get into opens this June.
does anyone have any solid advice for me??? I am new to this and would appreciate any help or wisdom.
Should I call my school and see if they can take back the money I owe and try to work out a deal for me to do a payment plan? Or do I just call the collection agency? Also, I find it odd that the collection agency for my student loan is only showing up in my EQ report.
Also can someone give me advice on what a Student loan rehab is?
Hi, thanks for posting and welcome to the Student Loan threads.
First step is to go out to the National Student Loan Database:
Review the student loan for the semester in question, and determine if those funds were dispersed to the school, or if the funds were returned back to the federal government.
It sounds to me that when the government received the report that you were no longer half time, they "took back" the student loan funds from the school. This left a deficite with the school as they had already given you part of that student loan money and you were still enrolled in courses. If you dropped the courses after the date in which you could get a refund, then the school still charges you as if you'd taken the course. Some schools only charge a percentage, and others just the full tuition.
So, now on top of the $1700, you owe the tution from that term, which is probably why you are seeing such a large amount as it relates to collections. Also remember that collection companies have fees and other things that get added on.
After reviewing the NSLD, let us know what you see and then we can talk about next steps as these steps are different if you owe the school money verses owing the government money.