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Knowledge Kick

Can Money Owed To School NOT Students Loans Hurt Me

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Can debts owed to a school for tuition show up on your credit report? I'm not talking about student loans through the school or through a bank or the government. What happened was...back in 2005 I received a scholarship from a school. I went there for a brief stint before withdrawing from classes. Upon withdrawing, I lost my scholarship and the classes that were covered by the scholarship were no longer paid for and became a balance owed to the school.

 

My question is, does this balance have a chance of affecting my credit in the future if I do not pay it? I have been in college (at another school) since then, so I have not worried about it because debt collectors tend not to bother you for education debts while you're a full time student. The balance owed for that particular school is about $1,500.

 

I also had a similar situation last summer. I attended a local, county college to take 1 class over the summer. They didn't make me pay upon registration because a Pell grant was in place. I took the class and completed it, receiving course credit at my University. Turns out, the full Pell grant was applied to my tuition costs at the university. I had already transfered the credits to my school. Normally, the county college won't give you any of your info or transfer your credits until they're paid. I had already transfered the credits over though, so I had no incentive to pay them yet (they gave me my transfer letter because they thought they were paid by Pell). This is about $1,000.

 

So I have 2 separate cases here. The original school in 2005 ($1,500 owed to them) and the county college last summer ($1,000 owed to them).

 

Will these ever show up on my credit report? They usually control the situation by telling you that you can't get your grades or register for classes until they're paid. I don't ever need to go back there though and I have all my info already. I'm in good standing with my university. I graduated in May and don't owe them a balance (only Federal loans).

 

Should I be worried about this? I have an old letter from 2006 from a debt collector for the first school, haven't heard from them since. I just got a letter from a debt collector for the county school.

 

What do you think?

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I have worked at a college for over 13 years. I have never seen us go after a student for money they owe us related to tuition. We place a hold on their transcript. We will not send it unless they pay us what they owe. I imagine most colleges work the same way.

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I have worked at a college for over 13 years. I have never seen us go after a student for money they owe us related to tuition. We place a hold on their transcript. We will not send it unless they pay us what they owe. I imagine most colleges work the same way.

 

That's what I assumed too. However, I have received letters from collection agencies for both of these schools. I know that I never need transcripts from either school and will never attend either in the future. My only concern is my credit report. Will my credit be affected? Can they take the money from my state tax return for the debts owed?

Edited by Knowledge Kick

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Your problem is probably going to be the overpayment of the Pell Grant. It is not the school's money. It is the fed's money. If you were paid more than you should have received on the Pell Grant, the school will have to pay it back. They more than likely may come after you to get their money back.

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One school is a local, country college. The other is a small, public university. The Pell Grant was awarded to me at the county college but then rescinded later because I maximized the grant at my University.

 

So, I don't owe money to the government, but I do owe money to the college. It is now an outstanding tuition payment because of the Pell grant being taken back.

 

I know they obviously want the money, because I was contacted by a debt collector asking for it. I just want to know what they can do to me, aside from withholding my transcripts and not letting me register for classes, neither of which concern me.

 

I am only concerned about it showing up on my credit report or being taken from me via income taxes. Are these likely to happen?

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I had a collection on my report for a debt owed to a community college for tuition from 2008. They had a contract with a collection agency and would not let me pay the school. I had to pay the CA, but I was a litigious pain in the butt about it and the CA finally agreed to PFD.

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Can debts owed to a school for tuition show up on your credit report?

 

Should I be worried about this?

 

maybe and yes

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It absolutely can show up on your credit report. I owed 2 community colleges about ~1500 a piece. They showed up on my credit report and the JDB that owns the debt has taken to calling me incessantly and harassing me. Theyre the only two baddies left on my report

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It absolutely can show up on your credit report. I owed 2 community colleges about ~1500 a piece. They showed up on my credit report and the JDB that owns the debt has taken to calling me incessantly and harassing me. Theyre the only two baddies left on my report

 

 

You haven't at least sent them a limited C&D?

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Can debts owed to a school for tuition show up on your credit report?

 

Should I be worried about this?

 

maybe and yes

 

Hege is correct. It's yes and yes.

 

When you went to your community college, Pell didn't cover the class and the school must return Title IV money to the Feds within 5 days of discovering you were not eligible. They send school dollars back to the Feds and in turn will get it from you. Same thing with a scholarship. When you no longer qualify for the scholarship (low gpa, changed programs, etc) then the school returns the scholarship money to the fund. The cover the debt with school dollars. You do owe the schools for tuition in both cases.

 

They may not turn up on your credit reports but if these are public schools (taxpayer funded) they will come for their money. If not now, then later when they're hard up. Some states have decided to turn these accounts over to their respective Attorney Generals for collection. The AG's get a piece of the action ($) and they have cut out the collection agencies. They'll take your state tax returns.

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So instead of waiting for them to take these amounts out of my state tax returns, should I just negotiate a reduced payment with the collection agencies? Will they settle for a less than full amount? I rather pay $800 of the $1,500 and have it be done with then getting $1,500 taken out of my state tax return without notice.

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