Title 4, collection and a long story short...

[xpamarshall]

OK. In August of 2000 I got a financial aid check for $3450. I paid some school associated fees and rent for the semester and then I was transferred across the country for my job so I had to withdraw. I called the financial aid office and they said that I would just go into repayment. I thought "Okay, no big deal" and I've been making tiny $25 a month payments since.

 

On my Equifax credit report there is a collection through Crowne Collections in Idaho for ISU for $1750ish dollars. I called the ISU business office today and the lady that I spoke with said that it was for an original amount of $1175 and that's it's 'title 4' money that the university had to repay when I withdrew. I asked her if there was anything that she could do to help me remedy the situation (such as pull it back from the CA). She said no. That they still own the debt (they don't sell it) and that their contract with the CA would not allow them to take it back since it has been in collection for 5 years.

 

I have never received anything from the CA. If I DV them I know that they can provide validation (whether or not it would be correct or timely, who knows). I won't call them so obviously I need to send them something. I did dispute last month and they verified it and raised the amount due to $1750 (from $1175).

 

I would like to get a mortgage in December. What is the best way to go about this? Should I send a PFD since I know that the school can get them validation? Would you offer the PFD for the original amount only??

 

Thanks so much for your advice,

Kel

[LynnInMN]

OK.  In August of 2000 I got a financial aid check for $3450.  I paid some school associated fees and rent for the semester and then I was transferred across the country for my job so I had to withdraw.  I called the financial aid office and they said that I would just go into repayment.  I thought "Okay, no big deal" and I've been making tiny $25 a month payments since.

 

On my Equifax credit report there is a collection through Crowne Collections in Idaho for ISU for $1750ish dollars.  I called the ISU business office today and the lady that I spoke with said that it was for an original amount of $1175 and that's it's 'title 4' money that the university had to repay when I withdrew.

 

This means that due to your withdrawal date, the school had to send back part of your financial aid.  You should have had credit with your lender that you are paying $25/month on. 

 

 

I asked her if there was anything that she could do to help me remedy the situation (such as pull it back from the CA).  She said no.  That they still own the debt (they don't sell it) and that their contract with the CA would not allow them to take it back since it has been in collection for 5 years.

 

This is pretty standard with schools.  We had 4 collection agencies that we had contracts with.  Part of the contract involved non interferance with their effort to collect. 

 

I have never received anything from the CA.

]Did you ever supply the school with your current address??  Your file would have been transmitted with the address on the schools file.

 

If I DV them I know that they can provide validation (whether or not it would be correct or timely, who knows).  I won't call them so obviously I need to send them something.  I did dispute last month and they verified it and raised the amount due to $1750 (from $1175).

 

The CA charges the school collection costs which are passed on to you.  33% is average.

 

I would like to get a mortgage in December.  What is the best way to go about this?  Should I send a PFD since I know that the school can get them validation?  Would you offer the PFD for the original amount only??

 

You might get some of the collection costs waived but generally not all.  PFD is basically a matter of policy.  It can also be written into the contract with the CA that it not be deleted.

 

Thanks so much for your advice,

Kel

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[xpamarshall]

Thanks Lynn. I'm going to try to PFD. If they say no then they won't get paid until my mortgage closes in February. I guess I can drag it out time with DVs if I need to.

 

Kel

[LynnInMN]

Thanks Lynn.  I'm going to try to PFD.  If they say no then they won't get paid until my mortgage closes in February.  I guess I can drag it out time with DVs if I need to.

 

Kel

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A word of warning...if a mortgage company contacts them for a pay off balance, you will not get a settlement. Since they know they have you over a barrel, they will not settle off on any of the collection costs. You are better off trying to settle with them now yourself...save yourself some money!

[xpamarshall]

Oh, I am Lynn. I'm not applying for a mortgage until December. Hopefully, this will be resolved by then!

 

Kel