In 1988, entering my last year in a Bachelor of Arts program, just weeks before classes were to begin, I was told my Pell Grant was denied due to Federal budget cuts. My only alternative was a Stafford Student Loan (now known as a Guaranteed Student Loan.) I borrow $6000 at 8% interest to cover the first semester. I was denied a loan for my second semester. Maxed out on credit cards and without any means of paying tuition I left college only three classes shy of a degree.

I paid on my loan for two years without incident. A layoff and subsequent year of unemployment put my loan in default. I attempted to bankrupt the loan in 1993 and the discharge was accepted by the local bankruptcy court, but denied by the DOE. That same year the DOE issued a Warrant in Debt for $6513.61. I received the notice only two days prior to the court date. To contest would require travel across four states and was financially impossible for me to attend.

My tax refunds have been ceased since 1993. With check payments and federal offsets of my tax refunds I’ve paid over $10,000 against this debt. With interest and fees my outstanding balance has grown to over $14,000. Collectcorp calls every other day trying to get me to settle for $8,400 lump sum payment. That would mean paying almost $20,000 for a $6,000 dollar loan.

Throughout the years collection agencies (most recently Collectcorp) have threatened to garnish my wages (I’m self employed for that reason), take my home, take my drivers license, ruin my credit, have me thrown in jail and the straw that broke the camels back…they threatened to have my kid placed in foster care. None of this has happened. When I went for a car loan and a mortgage, both times, I was told - “don’t worry about student loans…everyone has them on their credit record, we don’t even look at them anymore.”

I’ve kept all my documentation, including the actual cancelled checks and phone logs. I’ve sent them with letters over and over again with no response. Usually, within a few months of sending my documentation, the loan is passed to yet another collection agency. So far I have dealt with 12 different collection agencies. I have recently begun to record the phone conversations; although they usually hang up as soon as I notify them they are being recorded. I attempted to contact the ombudsman at one point and did not receive a response. I am going to try again and see what happens.

I too would like to participate in a class action lawsuit. I’ve tried several times to negotiate this debt, but am unwilling to accept $8,400. According to my promissory note they cannot charge above 25% of the principle and interest. I am resolved not to pay one more red cent until I can testify before Congress. Please contact me at Chip@Bytemeworld.com if you’re a lawyer willing to take this on.