My father signed for some Parent Plus Loans in the mid 90's that he has recently defaulted on. I was not aware of this fact until NCO called me today trying to get some money out of me. (Set up a payment plan...etc) I want to help my father out who is on social security (permanently disabled) but I'm not taking the CA's word for it....NCO was very forceful on the phone today so I told them to send me whatever documentation they have stating my obligation to the loan in writing and not to call me anymore. They evidently also called my wife about a dozen times, who I was not married to when we were in college when the loans were taken out. Do I need to send a C&D to NCO for them to leave her alone?

My question is, if a parent defaults on a plus loan is there any liability for the beneficiary of the loan proceeds? (ie the student?) I was under the impression that this was only the signee of the loan, as I couldn't transfer it to my name even if I wanted to.

The rep from NCO also mentioned specific details about the loan, delinquency status, amount due, etc. Isn't this 3rd party disclosure if I have no legal obligation of the debt?

Any advice from the SL experts would be appreciated.

After reading the information about PLUS loans, the borrower, in this case, your father, can have the loans discharged based on the same criteria as for Stafford loans. This includes disability.

I couldn't find any information whether or not you are responsible for these loans. You may need to call the DofEd about this.

Also, definitely send a limited C&D.

Call the servicer of the loan - AES (PHEAA), ACS, Great Lakes, Sallie Mae - whoever is sending your father the bills, and tell them that he is disabled. They will help clear this up. Your father may have to be on the line as well.

I work in student loans and this should be no problem if you cut the collection agency out of the loop.

If NCO contacted you or your wife WITHOUT your fathers permission, they violated FDCPA third party disclosure. As the student, you have no liability to the loan nor are you party to the loan. The parent is the borrower....period.


I would recommend cancelling any payments ASAP. They cannot dunn you for the payments either. I would recommend finding an NACA attorney and filing suit.

Thanks for info all. I found a form online for cancellation of SL's due to permanent disability. I will get this info to my dad and have him file the paperwork. NCO was taking money out of his SS Disability check. They stopped getting their money when he changed bank accounts. If they want to go after him, the most they could do is a 15% administrative garnishment, correct? If they clean out his new bank account, is that a violation? Hopefully it won't get to that point if he can file the paperwork and get the cancellation granted. Thanks again.

NCO was not taking money from his SS check...that would have been the guarantor.....that would have been admin wage garnishment .
Dont know how changing a bank account would stop it.

Now, getting a loan cancelled for perm disability is very difficult. Being on SSDI is not a factor. Did he have the condition when he signed for the loan???

Just spoke to my mom about this. My dad was on disability at the time, but not declared totally disabled when the loans were dispersed. He doesn't want to cancel the loans, just pay them off. The money that is coming out of his check is some sort of payment arrangement he made with the DOE when it was delinquent. (He was in the hospital for several surgeries...) The details are sketchy as my parents are not completely on top of this.

This is getting kind of strange. She says that my dad agreed with the DOE to have a set amount of his SS check taken out for the loan. ($85 a month.) NCO had the loan for a short time but DOE was supposed to recall the loan, which they did when the payment agreement was reached. I'm kind of scratching my head at this point. I think NCO still thinks they have the loan, or they are trying to get some free money. I should quiz them a bit further when they call me again.

In the meantime should I tell my dad to send an unknown debt letter to NCO? I want to help out here, but I can't call the OC (DOE) without my dad's consent. Next time I am home we will call together.