Question:
I want to know what you would do. If you had a federal perkins education loan and refused to pay and the university igned it to 2 different collection agencies and you still refused, can he university do anything else by law to collect? What if you were paying back a student loan when you were sentenced to a year in jail and for no apparant reason the sl(student loan) people stopped sending their monthly bill.

Then fast forward 5 years and suddenly there is a bill from a collection agency for this sl. This agency is claiming an amount more than the original loan and has no info on how much of the loan had been paid off. A verbal agreement is reached with a rep of this agency of a payoff amount. The very next day when trying to reach this rep again you are given to the supervisor who states that the rep had no authority to make this agreement (after approx 6 mos negotiating with that rep). Then no contact about sl for 4 more years. Started receiving recorded messages to call about an overdue bill. You called and talked to someone who called you a deadbeat, etc. then hung up on you. You called back, talked to supervisor, told them to stop calling. Calls stopped for a while but then started up again about once every two weeks (recorded msg). Did they breach their contract or did you?

Answer:
Yep. First of all, the collection agency would be the federal student loan agency itself. Defaulting on a student loan is a federal offense. Once you default, you can never get another student loan. However, if the student loan was offered by the school, and not a federal program, then it's handled as any other debt. You signed a legal binding contract, took the money and used it. Failure to repay is a breach of the contract and they do have recourse on you.

Consult a licensed attorney for the advice. I'm not sure how it all works, but if you are incarcerated, I believe they can not continue to collect until after your release. Since the agency made no attempt to contact you within a reasonable time after your release, 5 years is not reasonable, then it's likely they have breached the contract. However, it could also be seen that you failed to notify the loan source that you have acquired your freedom once more and wish to reinstate the payments. Making no contact on your part could be seen as a breach of contract on your part. That would be determined by the courts as to who did what.

First of all, the collection agency would be the federal student loan agency itself. Defaulting on a student loan is a federal offense. Once you default, you can never get another student loan.

I am not a lawyer, but I think you are wrong. Here is a quote from a web page by the NorthWest Justice Project ( http://www.nwjustice.org/docs/1170.html ) on defaulted student loans: <start quote> "It is often very important to take care of a student loan default. As you may already know, ****while you have a loan in default you are ineligible for other student loans**** and grants that would help you get the training or education you need to make a livable wage. Further, a default damages your credit rating, and can lead to interception of your earned income tax credit, wage garnishment, aggressive collection efforts, and assessment of high collection fees" <end quote> So, yes, obviously, as the quote above clearly implies, you CAN get another loan once you are no longer in default.

And as to the "federal offense" remark, that is clearly wrong: defaulting on a student loan is NOT a crime. Period. With the federal consolidation loan program, it's quite possible that a debt of this nature could be lessened to a point where payments are extremely low, and makes it a whole new ball game. Now that would put the royal screws to the debtor wouldn't it?