Sallie Mae Private Company Dec. 29, 2004
I literally found this out today. My student loan is not governed by the Department of
Education. Sallie Mae is a totally private
company as of december 29, 2004. My question is 1.Does that remove the Department of Human Services from recourse.
2. Since Sallie Mae is private and has no
affiliation with the United States Government what does that mean in regards
to my 1982 student loan. Can I file straight bankruptcy. Do the hardship laws apply.
Which chapter should I file? What about Chapter 11? Can they still, since they are not part of the US government prevent me from participating in medicare/medicaid
reimbursement. Why are they stating they are in contact with the Department of Justice?
Last, should I file chapter before Oct.
17th or wait to be sued?
A few observations...
Yes, Sallie Mae is no longer an agency within the federal government. It has been privatized. That does not mean that your loan is not "governed" by the Department of Education. The DoE retains regulatory authority over student loans guaranteed by the federal government. We cannot provide professional legal opinions to individual borrowers. We do not have sufficient information regarding your circumstances to provide professional opinions. Regarding your questions:
1. What you mean by "recourse" in this context is not clear. Borrowers must look to the terms of their promissory notes to determine the latitude provided to HHS under their agreements. Sallie Mae going private does not affect any of the terms of student loan borrowers' promissory notes. Borrowers' obligations and the government's rights under your loan agreement are unchanged by Sallie Mae's change in status.
2. Sallie Mae's change in status has no impact on the bankruptcy laws. HEAL loans (if that is what we are talking about here) require sufficient evidence (under the "preponderance of the evidence" civil standard) that a failure to discharge a loan in bankruptcy will have an unconscionable result on a borrower. That is higher than the "hardship" standard generally applicable to other student loans. Re-read my reply to your prior post related to HEAL loans if that is the type of loan under discussion here. As I've said in other posts, the bankruptcy laws effectively limit discharge of student loans to Chapter 13 under the bankruptcy code. Sallie Mae cannot exclude a borrower from participating in Medicare/Medicaid, but the federal government acting through the HHS Centers for Medicare and Medicaid Services (CMS) potentially can. As a student loan servicing organization, Sallie Mae has the ability to be in contact with various federal agencies that have an interest in the status of an individual borrower's student loans. The DOJ may be one of those agencies depending upon the circumstances in your case.
3. You need to seek the advice of an attorney regarding particular actions you should or shouldn't take by particular dates of interest. The consequences of your actions or inactions are too significant to relegate to responses to a forum post where responders don't have a full understanding of the circumstances in your case.