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Student loan in collections past statute

Your FICO® Scores can impact your loan interest rates, terms, approvals and more.
New Contributor

Student loan in collections past statute

My husband had a private student loan with Navient for $9,000. He has not paid on it since joining the military in 2010. He thought the loan was paid by the army but now 9 years later Navient contacted him and said they are sending it to collections. They claim they never contacted him about it being in default because he asked them not to call him anymore. (???) Anyway. The collection agency letter he receives states right in the beginning that they cannot sue or anything because the statute of limitations is passed (it’s 4 years here). They are offering him a settlement amount of $1700. (He is only 70% disabled so he doesn’t qualify for the disability discharge.) What are the pros and cons of paying the settlement vs paying nothing? His score was 700 prior to this showing up a few months ago.
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Established Contributor

Re: Student loan in collections past statute

Private loans are not what I know well so hopefully someone can provide a better answer.
First, I would double check that it really is a private loan and/or that he doesn't have any federal loans hanging out there. He can check this on the NSLDS, National Student Loan Database gov website. It's nothing's there, he's in the clear.
My understanding is that if the loan is beyond the SOL and they haven't sued, they won't be able to do so. No lawsuit and judgement... No way to connect. Yes, he will always owe the debt, they just have no way of making him pay. It's best to run this by a lawyer though, such a on AVVO since it's free.
He can attempt pay for delete anything he might want to get it in writing. I'm not sure if anyone had success with that though. If you're sure about the SOL I'd personally ignore it if it couldn't be enforced.



Message 2 of 3
Valued Contributor

Re: Student loan in collections past statute


@Sabii wrote:
Private loans are not what I know well so hopefully someone can provide a better answer.
First, I would double check that it really is a private loan and/or that he doesn't have any federal loans hanging out there. He can check this on the NSLDS, National Student Loan Database gov website. It's nothing's there, he's in the clear.
My understanding is that if the loan is beyond the SOL and they haven't sued, they won't be able to do so. No lawsuit and judgement... No way to connect. Yes, he will always owe the debt, they just have no way of making him pay. It's best to run this by a lawyer though, such a on AVVO since it's free.
He can attempt pay for delete anything he might want to get it in writing. I'm not sure if anyone had success with that though. If you're sure about the SOL I'd personally ignore it if it couldn't be enforced.

What Sabii said ^

If it is well and truly a private loan (and please be sure, first), then you can treat it like any other debt.
If you can find out what the DOFD is, that would be REALLY helpful.
If it's been 7 years (or close to it, and it sounds like it might be) then it can't/won't be put back on his credit report (and if it is, it will fall off at ~7y or 7y+180d).

Settling for $1700 sounds like a great deal to me, if it's something you have to worry about or if you feel you should pay it (I won't go into morality of whether or not you should here, that's up to you).   

So many "if"s in this story, good luck!





Garden goal: Completely clean reports and a gold spade (which, at my current rate, is never going to happen...)
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