Revdex.com:
I have reviewed the response made by the business in reference to complaint ID [redacted], and have determined that the response would not resolve my complaint. For your...
reference, details of the offer I reviewed appear below.
This is not a duplicate because there was missing information that was requested and has been added to my original complaint.
Regards,
[redacted]
Revdex.com:
I have reviewed the response made by the business in reference to complaint ID [redacted], and have determined that the response would not resolve my complaint. For your reference, details of the offer I reviewed appear below.
I have called numerous times to handle this complaint, and each day that goes by, you are adding interest to a debt that I have tried for months to handle. If it takes you that long to do research, I request that there be a hold placed on my account with no additional interest fees occurring while you do your research.
Regards,
[redacted]
Revdex.com:I have reviewed the response made by the business in reference to complaint ID [redacted], and have spoken to Ombudsman on June 29th and was assigned a case number and is in the process of submitting my documents to them. I will find this resolution being satisfactory to me upon them correcting this account with Equifax, Experian & TransUnion. I have provided a copy of how this account how it's being reported with all three credit bureaus negatively & inaccurately and affecting my credit score.Regards,[redacted]
Re: #[redacted] – [redacted] Dear Ms. [redacted]: Thank you for your inquiry dated June 2, 2016 regarding Ms. [redacted]’s concerns. Based upon a review of our systems and records, we will require a longer period of time to research and respond to Ms. [redacted]’s...
inquiry. Further, it appears that Ms. [redacted] has made previous inquiries with [redacted], Inc. ([redacted]), formerly known as [redacted], Inc. ([redacted]) regarding the issues she has described in her most recent inquiry with your office. For purposes of explanation, [redacted] and [redacted] are not affiliated companies. [redacted] does, however, contract with [redacted] for certain administrative functions, including the collection of delinquent and defaulted student loans. We appreciate Ms. [redacted]’s and the Revdex.com’s patience and we expect to have a complete review and response to you by June 15, 2016. If further time is needed, we will notify you accordingly. If you have further concerns or questions, please contact me at (317) 806-1265. Sincerely, Susan L[redacted] /smf s/investig/official/smf-[redacted].doc
Since USA Funds is not the guarantor or current holder of Ms. [redacted]’ loan(s), we are unable to assist her further. We will again advise Ms. [redacted] to access the information found on the National Student Loan Data System (NSLDS), a database maintained by the U.S. Department of Education (Department), which tracks all Title IV student loans for each borrower in the program. We encourage Ms. [redacted] to access NSLDS via https://www.nslds.ed.gov/nslds_SA/ to review the current holder, contact information and statuses of all her federal student loans. We believe that such a review would assist her in identifying all of the monies that are still owed on the loans that she borrowed. Furthermore, if not previously made clear, USA Funds and Navient Solutions, Inc. (Navient), formerly known as SallieMae, Inc. (SallieMae) are not affiliated companies. If for some reason Ms. [redacted] is unable to access NSLDS, I encourage her to contact the Department, Federal Student Aid Ombudsman's office for further assistance. The ombudsman may be contacted in writing at the following address: U.S. Department of EducationFSA OmbudsmanP.O. Box 1843Monticello, KY 42633 Ms. [redacted] may also contact their office via e-mail at http//studentaid.gov/repay-loans/disputes/prepare or toll-free at 877-557-2575 or fax 606-396-4821.
Dear Ms. [redacted], UpdateI received an update on July 1, 2016, from a representative from [redacted], which is a contractor for the U.S. Department of Education (Department), that the ticket to split Ms. [redacted]’s two federal student loans from one loan belonging to another borrower on the National Student Loan Data System is still open. Further, because of the complexity of the issue, she is unable to give me an estimated date of completion, but will notify me when the records have been corrected. Please be advised, however, that the correction has been made on [redacted]’ databasedNSLDS is a database maintained by the Department, which tracks all Title IV student loans for each borrower in the program. Credit Reporting for 2 Valid Loans The consequences of default are severe under the federal student loan programs, and include the requirement to report delinquency and default information to the national consumer reporting agencies. [redacted] is a provider of information to the consumer reporting agencies for the loans that it holds, and as required by federal regulations, both lenders and guarantors are required to report to consumer reporting agencies when a student loan becomes 90 days or more delinquent and when a loan defaults, respectively. In cases of default, a separate trade line will be reflected for both the lender, and the guarantor that purchased the default claim, on a borrower’s credit record. In response to Ms. [redacted]’s concerns regarding [redacted]’ credit notation as it appears on her credit report, federal regulations governing federal student loans require the guarantor to report to all national credit bureaus on a regular basis information regarding loans purchased due to default. The default notation reported by [redacted] to the credit bureaus and in accordance with federal law may remain on the account for seven years from the date her two federal student loans became delinquent on August 18, 2011. The Higher Education Act (HEA) also requires guarantors to report the total amount of loans made to the borrower, the date of default, the collection status of the loan, and the date the loan was repaid by the borrower. Under the Fair Credit Reporting Act (FCRA), [redacted] is not required to report monthly payment amounts to the credit bureaus. [redacted] does, however, report outstanding balance information on accounts it holds on a monthly basis. Also, please bear in mind that [redacted] has no authority in relation to credit reporting data made by any previous loan holders. Although the previous lender(s) may no longer hold Ms. [redacted]’s [redacted]’ two federal student loans, their credit history may remain on her credit report for seven years from the 2011 date of delinquency in order to reflect her payment history to future creditors. I would like to clarify that [redacted] and [redacted], Inc. ([redacted]), formerly known as [redacted], Inc. ([redacted]) are not affiliated companies. [redacted] does, however, contract with [redacted] for certain administrative functions, including the collection of delinquent and defaulted student loans. If Ms. [redacted] still discovers discrepant information being reported in her credit file, she can mail a copy of the credit information to the following address for review: [redacted]Attn: Susan L[redacted], MC 8516P.O. Box 6028Indianapolis, IN 46206-6028 If you have further concerns or questions, please contact me at (317) 806-1265 or at susan.l[redacted]@usafunds.org. Sincerely, Susan L[redacted]
Re: #[redacted] – [redacted] Dear Ms. [redacted]: Thank you for your inquiry dated August 8, 2016 regarding Ms. [redacted]’s concerns. Based upon a cursory review of our systems and records, we will require a longer period of time to research and respond to Ms. [redacted]’s...
inquiry. We appreciate Ms. [redacted]’s and the Revdex.com’s patience and we expect to have a complete review and response to you by September 1, 2016. If further time is needed, we will notify you accordingly. If you have further concerns or questions, please contact me at (317) 806-1265. Sincerely, Susan L[redacted]OmbudsmanUSA Funds /smf s/investig/official/smf-[redacted].doc
Thank you for your inquiry dated October 19, 2015 regarding Mr. [redacted] concerns. As the guarantor of two federal Stafford loans for Mr. [redacted], United Student Aid Funds, Inc. (USA Funds) offers the following information related to Mr. [redacted] loan account.
· For...
purposes of explanation, [redacted], Inc. ([redacted]) and Coast Professional, Inc. (Coast) are two of the many collection agencies utilized by Navient Solutions, Inc. (Navient), formerly known as SallieMae, Inc. (SallieMae) to collect defaulted student loan accounts on USA Funds' behalf. USA Funds and Navient are not affiliated companies. USA Funds does, however, contract with Navient for certain administrative functions, including the collection of delinquent and defaulted student loans.
According to our records, on November 17, 1997, USA Funds guaranteed two federal student loans totaling $6,625 for Mr. [redacted] attendance at DeVry University through Nations Bank, which were later transferred or sold to Navient Federal Loan Trust and serviced by Navient. These loans 'A-lauded one subsidized Stafford loan for $2,625 and one unsubsidized Stafford loan for $4,000. The lender's history also reflects that the second disbursement of both loans were canceled. Ultimately, USA Funds guaranteed a total amount of $3,313. Enclosed is a copy of Mr. [redacted] Application and Promissory Note for Federal Stafford Loans, which was signed and dated on October 16, 1997, and two Notices of Loan Guarantee and Disclosure Statements.
Mr. [redacted] federal student loans were first declared in default after 270 days of non-payment on a next-payment-due date of December 23, 20041. On December 8, 2005 a default claim was filed with
USA Funds, and on January 31, 2006 USA Funds purchased the loans from Navient. In accordance with federal regulations', unpaid interest was capitilized (added to the principal balance of the loan at the time of claim purchase), creating Mr. [redacted] new principal balance of $5,287.97 on which interest began to accrue and on which collection costs would be assessed. The assessment of collection costs against defaulted federal student loan borrowers is also required by federal regulation? USA Funds' collection costs as of January 2006 were 22.5%; however, they are recalculated semi-annually as a percentage of a borrower's outstanding principal and interest balance. These collection costs add to the total payoff amount applicable to defaulted loans, in addition to interest which continues to accrue on a daily basis.
Beginning in April 2006 and prior to Mr. [redacted] successfully rehabilitating his loans on February 15, 2007, $805 in payments were credited to Mr. [redacted] account. Of that amount, $364.96 was applied to unpaid accrued interest, $145.47 was applied to collection costs, and $294.57 was applied to the outstanding principal. Federal student loans are simple interest loans on which interest accrues daily. With regard to payment application, payments are applied in the following order as required by federal regulations: a portion of each payment is first applied to outstanding collection costs, next to outstanding interest, and the remaining amount to principal'.
Mr. [redacted] actively participated in the loan rehabilitation program, and was still responsible for collection costs until he had successfully completed the program. After Mr. [redacted] made his qualifying payments, his loans were successfully rehabilitated on February 15, 2007, in the amount of $5,939.35, representing the total amount of principal, collection costs, and interest accrued through the date the new lender purchased the loans, through FinanSure Student Loans, LLC and serviced by ACS Education Services (ACS).
· In keeping with federal requirements, collection costs are reduced on the final payoff of the loan by the new lender and can only be assessed at 18.5%5, regardless of the percentage used for borrower payments made prior to and during the rehabilitation cycle. Also, as required by federal regulation with Mr. [redacted] rehabilitation agreement signed and dated on July 7, 2006, the 18.5% in collection costs assessed are capitalized when the loans were purchased out of default. A signed agreement must be received to show aware[redacted]s of and agreement with the terms of rehabilitation, and contains all the critical information required for Mr. [redacted] to understand the commitment and consequences of proceeding with the Loan Rehabilitation program.
ACS serviced the newly rehabilitated loans with a next-payment-due-date set for April 28, 2007. Mr. [redacted] failed to make his payment and the lender began diligent efforts to resolve the growing delinquency on his account, however, his federal loans were declared in default a second time after 270 days of non-payment.
On April 7, 2009, the lender filed a default claim with USA Funds, and on May 29, 2009, USA Funds purchased the loans. Again, in accordance with federal regulations, unpaid interest was capitalized (added to the principal balance of the loan at the time of claim purchase), creating Mr.
[redacted] new principal balance of $6,755.23 on which interest began to accrue and on which collection costs would be assessed. As noted above, the assessment of collection costs against defaulted federal student loan borrowers is required by federal regulation and USA Funds' collection costs are currently 223%, and they are re-calculated semi-annually based on a borrower's outstanding principal and interest balance.
Enclosed are two copies of Mr. [redacted] Statement of Accounts (SOA), one dated February 2, 2007 chronicling Mr. [redacted] payments after his first default in 2006, and another dated October 20, 2015, which illustrates the payments applied to Mr. [redacted] loans beginning after the claim was purchased by USA Funds a second time in 2009.
· In reviewing Mr. [redacted] complaint, I see that he is requesting information on how his payments were applied to the balance of the loans. I'd like to direct his attention to the Statements of Account, which breaks down each payment received on these loans and how those payments were applied to collection costs, interest, and principal amounts. I hope that resolves his questions related to payment application.
According to our records, Mr. [redacted] account was assigned to [redacted] for collections effective March 24, 2014, following the conclusion of a bankruptcy action during which time (October 27, 2009 through March 11, 2014) during which payments were made to reduce the balance on the loans. In reviewing Mr. [redacted] account history and inquiry with [redacted], I understand [redacted] made numerous attempts to reach Mr. [redacted] by phone and mail. Subsequently, federal regulations governing the 1-1-EL program require guarantors to initiate administrative wage garnishment (AWG) proceedings against all eligible borrowers.6 For purposes of clarification, before an AWG can be commenced against a borrower, collection agencies are required to request authorization from USA Funds to proceed with an AWG and to follow procedures based on federal regulations. If a borrower disputes the debt or their balance, a mandatory requirement is to schedule an administrative hearing with an impartial judge to discuss these concerns. It is also an opportunity for the borrower to set up a payment arrangement, which can rescind the AWG order. Consequently, on July 24, 2014 Mr. [redacted] was mailed a Notice Prior to Wage Withholding; however, it was not until Mr. [redacted] contacted [redacted] in writing, in a letter dated August 22, 2014 and offering to submit a $100 monthly payment, that [redacted] had any contact from him. On August 26, 2014, [redacted] mailed Mr. [redacted] the first of several loan rehabilitation information packets for him to complete. Unfortunately, Mr. [redacted] did not complete and return the rehabilitation agreement.
· For clarification purposes, it is important for Mr. [redacted] to understand that once a voluntary monthly payment was requested, a rehabilitation agreement must be completed by each potential borrower entering in to the Loan Rehabilitation program. As stated previously, this agreement contains all the critical information required for a borrower to understand the commitment and consequences of proceeding with the Loan Rehabilitation program. The federal regulations governing this program require a signed agreement to be completed and returned that demonstrates aware[redacted]s of and agreement to the terms of rehabilitation, and in order for a borrower to enter into the Loan Rehabilitation program. The rehabilitation agreement advises borrowers that in keeping with federal requirements for Loan
34 CFR 682.405(a)(2)Rehabilitation, once the qualified payments are made, a borrower's account then becomes eligible for purchase by an eligible lender.'
· Mr. [redacted] did not return a signed rehabilitation agreement to [redacted], which prevented Mr. [redacted] from entering the Loan Rehabilitation program. Subsequently, Mr. [redacted] account was recalled from [redacted] and placed with Coast effective August 17, 2015.
· In Mr. [redacted] inquiry to the Revdex.com, he states he submitted 8 payments to [redacted]. On the SOA dated October 20, 2015, beginning September 15, 2014, our records reflect the receipt of only 7 payments. If he believes he made a payment which was not posted to his loan balance, Mr. [redacted] may provide copies of front and back canceled checks for further research to our office at the following address:
USA Funds
Attn: Susan [redacted], MC 8516 P.O. Box 6028
Indianapolis, IN 46206-6028
While we sympathize with Mr. [redacted] frustration and circumstances, USA Funds is bound by the federal regulations that govern the FFELP, which requires us to diligently collect against this outstanding loan obligation. Mr. [redacted] may wish to consider the payment options that are available to defaulted borrowers as described in the enclosed Attachment A. For more information, he may log onto USA Funds' website at www.usafunds.org for additional information on these programs. Mr. [redacted] may wish to consider loan consolidation through the William D. Ford Direct Loan Program and specifically request the income contingent repayment (ICR) plan option. Under ICR, repayment is based on a borrower's income. For additional information about this program, Mr. [redacted] may log onto the Department's website regarding Direct Consolidation at www.loanconsolidation.ed.gov or call their toll-free number at 800-557-7392.
We encourage Mr. [redacted] to contact Coast at their toll-free number 800-965-4379 regarding payment options described in Attachment A and any questions he may have. The longer Mr. [redacted] delays in contacting Coast or establishing a payment plan, the higher his balance will become due to daily accruing interest. In addition, if a voluntary payment plan is not established, collections will continue through involuntary measures such as the offset of Mr. [redacted] federal taxes or administrative wage garnishment.
Finally, we understand that the federal student loan regulations governing the federal student loan program are complex and can be confusing. If Mr. [redacted] disagrees with USA Funds' handling of his account, as a student loan borrower he has the right to contact the U.S. Department of Education's Office of the Ombudsman to discuss his concerns. He may contact the Ombudsman toll-free at (877) 557-2575, via e-mail at sfaombudsmanofficea ed.gov or in writing. The mailing address is:
Office of the Ombudsman U.S. Department of Education
830 First Street, N.E.
Mailstop 5144
Washington, DC 20202-5144
I hope this matter satisfactorily addresses Mr. [redacted] questions and concerns and we appreciate you allowing us the opportunity to assist you.
Sincerely,
Susan [redacted]
Thank you for your inquiry dated October 5, 2015, addressed to United Student Aid Funds, Inc. (USA Funds), regarding Ms. [redacted]'s concerns. As the guarantor of the two federal student loans in question, USA Funds offers the following information related to Ms. [redacted]'s loan...
account.
· For purposes of clarification, we reviewed the information found on the National Student Loan Data System (NSLDS), a database maintained by the U.S. Department of Education (Department), which tracks all Title IV student loans for each borrower in the program NSLDS reflect that Ms. [redacted] also obtained federal student loans currently held by or guaranteed by other agencies that are not associated with Ms. [redacted]'s current inquiry with the Revdex.com (Revdex.com). Enclosed is a copy of Ms. [redacted]'s NSLDS report which was printed on October 5, 2015. The two federal student loans identified in Ms. [redacted]'s inquiry have been highlighted for your reference. I encourage Ms. [redacted] to access NSLDS via https://www.nslds.ed.gov/nslds_SA/ to review the current holders and statuses of all her federal student loans.
With respect to the two loans identified as guaranteed by USA Funds, and mentioned in Ms. [redacted]'s inquiry to the Revdex.com, we provide the following information:
According to our records, on May 11, 2006, USA Funds guaranteed two federal student loans totaling $6,045 for Ms. [redacted]'s attendance at Rio Salado Community College (Rio Salado) through the Bank of New York Trust and serviced by the former Affiliated Computer Services, Inc. (ACS). These loans included one subsidized Stafford loan for $2,625 and one unsubsidized Stafford loan for $3,420. The lender's history also reflects the receipt of a partial refund from Rio Salado of the unsubsidized Stafford loan for $3,420 in the amount of $213.40. Ultimately, after the refund was processed, Ms. [redacted]'s federal student loan obligation related to these two loans decreased from $6,045 to $5,831.60. Enclosed is a copy of Ms. [redacted]'s Federal Stafford Loan Master Promissory Note, which was signed electronically on May 11, 2006, and two Notices of Loan Guarantee and Disclosure Statements.
ACS serviced Ms. [redacted]'s loans while they were in repayment; however, Ms. [redacted] subsequently failed to make timely payment on these loans and they were declared in default after 270 days of non-payment on a next-payment-due date of November 14, 2011. On October 10, 2012, ACS filed a default claim on the federal student loans with USA Funds, and on December 7, 2012 USA Funds purchased the federal student loans from ACS. In accordance with federal regulations', unpaid interest was capitalized (added to the principal balance of the loan at the time of claim purchase), creating Ms. [redacted]'s new principal balance of $7,068.13 on which interest began to accrue and on which collection costs would be assessed. The assessment of collection costs against defaulted federal student loan borrowers is also required by federal regulation' and are assessed after the 60th day from claim purchase.
Subsequently, Ms. [redacted] elected to participate in the Federal Direct Loan Consolidation Program, which paid-in-full to USA Funds, by way of loan consolidation, Ms. [redacted]'s two federal defaulted student loans effective December 12, 2013. Enclosed is a copy of Ms. [redacted]'s Statement of Account (SOA) dated October 5, 2015. Please note, the entry on the SOA dated December 12, 2013 is not a payment from Ms. [redacted], but the payment the Department made to USA Funds in order to process Ms. [redacted]'s Federal Direct Consolidation Loan. Should Ms. [redacted] have further questions regarding the current repayment status of her consolidation loan, balance or payment options, she is encouraged to contact the Department's Direct loan servicer at (888)-545-4199.
The consequences of default are severe under the federal student loan programs, and include the requirement to report delinquency and default information to the national consumer reporting agencies. USA Funds is a provider of information to the consumer reporting agencies for the loans that it holds, and as required by federal regulations, both lenders and guarantors are required to report to consumer reporting agencies when a student loan becomes 90 days or more delinquent and when a loan defaults, respectively. In cases of default, a separate trade line will be reflected for both the lender, and the guarantor that purchased the default claim, on a borrower's credit record. In response to Ms. [redacted]'s concerns regarding USA Funds' credit notation as it appears on her credit report, federal regulations governing federal student loans require the guarantor to report to all national credit bureaus on a regular basis information regarding loans purchased due to default'. The default notation reported by USA Funds to the credit bureaus and in accordance with federal law, states that the default notation may remain on the account for seven years from the date Ms. [redacted]'s loans became delinquent in 2011.
Please note that consolidation of these two federal student loans into a federal Direct consolidation loan did not remove the default notation from Ms. [redacted]'s credit history. However, USA Funds
With the passage of Electronic Signatures in Global and National Commerce Act (E-Sign Act), lenders and borrowers in the federal student loan programs have the option of using electronic promissory notes and signatures. The E-Sign Act provides, in part, that a signature, contract, or other record may not be denied legal effect, validity, or enforceability solely because it is in electronic form or because an electronic signature or electronic record was used in its formation. The E-Sign Act allows the Department, guaranty agencies, lenders, schools, and borrowers to use electronic records and electronic signatures in place of traditional paper records and handwritten signatures.
2 34 CFR 682.410(b)(4)
3 34 CFR 682.410(6)(2)
4 34 CFR 682.410(b)(5)
reported her loans as paid and closed to the credit bureaus as a result of her consolidation, and Ms. [redacted]'s USA Funds' credit record should reflect a zero balance owed on these two loans. In response to Ms. [redacted]'s inquiry to the Revdex.com, USA Funds also processed an electronic update to ensure these updates where properly processed by the credit bureaus. If Ms. [redacted] still discovers discrepant information being reported in her credit file, she can mail a copy of the credit information to the following address for review:
USA Funds
Attn: Susan Leonard, MC 8516 P.O. Box 6028
Indianapolis, IN 46206-6028
Also, please bear in mind that USA Funds has no authority to mandate the retraction of prior credit reporting data made by any previous loan holders. Although the previous lender may no longer hold these two federal student loans, their credit history may remain on Ms. [redacted]'s credit report for seven years from the November 14, 2011 date of the delinquency in order to reflect Ms. [redacted]'s payment history to future creditors.
Sincerely,
Susan [redacted]
Ombudsman
Revdex.com:
I have reviewed the response made by the business in reference to complaint ID [redacted], and have determined that the response would not resolve my complaint. For your...
reference, details of the offer I reviewed appear below.
This is not a duplicate because there was missing information that was requested and has been added to my original complaint.
Regards,
[redacted]
Revdex.com:
I have reviewed the response made by the business in reference to complaint ID [redacted], and have determined that the response would not resolve my complaint. For your reference, details of the offer I reviewed appear below.
I have called numerous times to handle this complaint, and each day that goes by, you are adding interest to a debt that I have tried for months to handle. If it takes you that long to do research, I request that there be a hold placed on my account with no additional interest fees occurring while you do your research.
Regards,
[redacted]
Revdex.com:I have reviewed the response made by the business in reference to complaint ID [redacted], and have spoken to Ombudsman on June 29th and was assigned a case number and is in the process of submitting my documents to them. I will find this resolution being satisfactory to me upon them correcting this account with Equifax, Experian & TransUnion. I have provided a copy of how this account how it's being reported with all three credit bureaus negatively & inaccurately and affecting my credit score.Regards,[redacted]
Three emails have been sent, two resent, which include the original email and passwords, to [redacted] with the Revdex.com.
Re: #[redacted] – [redacted] Dear Ms. [redacted]: Thank you for your inquiry dated June 2, 2016 regarding Ms. [redacted]’s concerns. Based upon a review of our systems and records, we will require a longer period of time to research and respond to Ms. [redacted]’s...
inquiry. Further, it appears that Ms. [redacted] has made previous inquiries with [redacted], Inc. ([redacted]), formerly known as [redacted], Inc. ([redacted]) regarding the issues she has described in her most recent inquiry with your office. For purposes of explanation, [redacted] and [redacted] are not affiliated companies. [redacted] does, however, contract with [redacted] for certain administrative functions, including the collection of delinquent and defaulted student loans. We appreciate Ms. [redacted]’s and the Revdex.com’s patience and we expect to have a complete review and response to you by June 15, 2016. If further time is needed, we will notify you accordingly. If you have further concerns or questions, please contact me at (317) 806-1265. Sincerely, Susan L[redacted] /smf s/investig/official/smf-[redacted].doc
This appears to be a duplicate of Revdex.com inquiry [redacted]. Please advise.
Since USA Funds is not the guarantor or current holder of Ms. [redacted]’ loan(s), we are unable to assist her further. We will again advise Ms. [redacted] to access the information found on the National Student Loan Data System (NSLDS), a database maintained by the U.S. Department of Education (Department), which tracks all Title IV student loans for each borrower in the program. We encourage Ms. [redacted] to access NSLDS via https://www.nslds.ed.gov/nslds_SA/ to review the current holder, contact information and statuses of all her federal student loans. We believe that such a review would assist her in identifying all of the monies that are still owed on the loans that she borrowed. Furthermore, if not previously made clear, USA Funds and Navient Solutions, Inc. (Navient), formerly known as SallieMae, Inc. (SallieMae) are not affiliated companies. If for some reason Ms. [redacted] is unable to access NSLDS, I encourage her to contact the Department, Federal Student Aid Ombudsman's office for further assistance. The ombudsman may be contacted in writing at the following address: U.S. Department of EducationFSA OmbudsmanP.O. Box 1843Monticello, KY 42633 Ms. [redacted] may also contact their office via e-mail at http//studentaid.gov/repay-loans/disputes/prepare or toll-free at 877-557-2575 or fax 606-396-4821.
Dear Ms. [redacted], UpdateI received an update on July 1, 2016, from a representative from [redacted], which is a contractor for the U.S. Department of Education (Department), that the ticket to split Ms. [redacted]’s two federal student loans from one loan belonging to another borrower on the National Student Loan Data System is still open. Further, because of the complexity of the issue, she is unable to give me an estimated date of completion, but will notify me when the records have been corrected. Please be advised, however, that the correction has been made on [redacted]’ databasedNSLDS is a database maintained by the Department, which tracks all Title IV student loans for each borrower in the program. Credit Reporting for 2 Valid Loans The consequences of default are severe under the federal student loan programs, and include the requirement to report delinquency and default information to the national consumer reporting agencies. [redacted] is a provider of information to the consumer reporting agencies for the loans that it holds, and as required by federal regulations, both lenders and guarantors are required to report to consumer reporting agencies when a student loan becomes 90 days or more delinquent and when a loan defaults, respectively. In cases of default, a separate trade line will be reflected for both the lender, and the guarantor that purchased the default claim, on a borrower’s credit record. In response to Ms. [redacted]’s concerns regarding [redacted]’ credit notation as it appears on her credit report, federal regulations governing federal student loans require the guarantor to report to all national credit bureaus on a regular basis information regarding loans purchased due to default. The default notation reported by [redacted] to the credit bureaus and in accordance with federal law may remain on the account for seven years from the date her two federal student loans became delinquent on August 18, 2011. The Higher Education Act (HEA) also requires guarantors to report the total amount of loans made to the borrower, the date of default, the collection status of the loan, and the date the loan was repaid by the borrower. Under the Fair Credit Reporting Act (FCRA), [redacted] is not required to report monthly payment amounts to the credit bureaus. [redacted] does, however, report outstanding balance information on accounts it holds on a monthly basis. Also, please bear in mind that [redacted] has no authority in relation to credit reporting data made by any previous loan holders. Although the previous lender(s) may no longer hold Ms. [redacted]’s [redacted]’ two federal student loans, their credit history may remain on her credit report for seven years from the 2011 date of delinquency in order to reflect her payment history to future creditors. I would like to clarify that [redacted] and [redacted], Inc. ([redacted]), formerly known as [redacted], Inc. ([redacted]) are not affiliated companies. [redacted] does, however, contract with [redacted] for certain administrative functions, including the collection of delinquent and defaulted student loans. If Ms. [redacted] still discovers discrepant information being reported in her credit file, she can mail a copy of the credit information to the following address for review: [redacted]Attn: Susan L[redacted], MC 8516P.O. Box 6028Indianapolis, IN 46206-6028 If you have further concerns or questions, please contact me at (317) 806-1265 or at susan.l[redacted]@usafunds.org. Sincerely, Susan L[redacted]
USA Funds' response has been mailed to the attention of [redacted] with the Indiana Revdex.com.
Re: #[redacted] – [redacted] Dear Ms. [redacted]: Thank you for your inquiry dated August 8, 2016 regarding Ms. [redacted]’s concerns. Based upon a cursory review of our systems and records, we will require a longer period of time to research and respond to Ms. [redacted]’s...
inquiry. We appreciate Ms. [redacted]’s and the Revdex.com’s patience and we expect to have a complete review and response to you by September 1, 2016. If further time is needed, we will notify you accordingly. If you have further concerns or questions, please contact me at (317) 806-1265. Sincerely, Susan L[redacted]OmbudsmanUSA Funds /smf s/investig/official/smf-[redacted].doc
Thank you for your inquiry dated October 19, 2015 regarding Mr. [redacted] concerns. As the guarantor of two federal Stafford loans for Mr. [redacted], United Student Aid Funds, Inc. (USA Funds) offers the following information related to Mr. [redacted] loan account.
· For...
purposes of explanation, [redacted], Inc. ([redacted]) and Coast Professional, Inc. (Coast) are two of the many collection agencies utilized by Navient Solutions, Inc. (Navient), formerly known as SallieMae, Inc. (SallieMae) to collect defaulted student loan accounts on USA Funds' behalf. USA Funds and Navient are not affiliated companies. USA Funds does, however, contract with Navient for certain administrative functions, including the collection of delinquent and defaulted student loans.
According to our records, on November 17, 1997, USA Funds guaranteed two federal student loans totaling $6,625 for Mr. [redacted] attendance at DeVry University through Nations Bank, which were later transferred or sold to Navient Federal Loan Trust and serviced by Navient. These loans 'A-lauded one subsidized Stafford loan for $2,625 and one unsubsidized Stafford loan for $4,000. The lender's history also reflects that the second disbursement of both loans were canceled. Ultimately, USA Funds guaranteed a total amount of $3,313. Enclosed is a copy of Mr. [redacted] Application and Promissory Note for Federal Stafford Loans, which was signed and dated on October 16, 1997, and two Notices of Loan Guarantee and Disclosure Statements.
Mr. [redacted] federal student loans were first declared in default after 270 days of non-payment on a next-payment-due date of December 23, 20041. On December 8, 2005 a default claim was filed with
USA Funds, and on January 31, 2006 USA Funds purchased the loans from Navient. In accordance with federal regulations', unpaid interest was capitilized (added to the principal balance of the loan at the time of claim purchase), creating Mr. [redacted] new principal balance of $5,287.97 on which interest began to accrue and on which collection costs would be assessed. The assessment of collection costs against defaulted federal student loan borrowers is also required by federal regulation? USA Funds' collection costs as of January 2006 were 22.5%; however, they are recalculated semi-annually as a percentage of a borrower's outstanding principal and interest balance. These collection costs add to the total payoff amount applicable to defaulted loans, in addition to interest which continues to accrue on a daily basis.
Beginning in April 2006 and prior to Mr. [redacted] successfully rehabilitating his loans on February 15, 2007, $805 in payments were credited to Mr. [redacted] account. Of that amount, $364.96 was applied to unpaid accrued interest, $145.47 was applied to collection costs, and $294.57 was applied to the outstanding principal. Federal student loans are simple interest loans on which interest accrues daily. With regard to payment application, payments are applied in the following order as required by federal regulations: a portion of each payment is first applied to outstanding collection costs, next to outstanding interest, and the remaining amount to principal'.
Mr. [redacted] actively participated in the loan rehabilitation program, and was still responsible for collection costs until he had successfully completed the program. After Mr. [redacted] made his qualifying payments, his loans were successfully rehabilitated on February 15, 2007, in the amount of $5,939.35, representing the total amount of principal, collection costs, and interest accrued through the date the new lender purchased the loans, through FinanSure Student Loans, LLC and serviced by ACS Education Services (ACS).
· In keeping with federal requirements, collection costs are reduced on the final payoff of the loan by the new lender and can only be assessed at 18.5%5, regardless of the percentage used for borrower payments made prior to and during the rehabilitation cycle. Also, as required by federal regulation with Mr. [redacted] rehabilitation agreement signed and dated on July 7, 2006, the 18.5% in collection costs assessed are capitalized when the loans were purchased out of default. A signed agreement must be received to show aware[redacted]s of and agreement with the terms of rehabilitation, and contains all the critical information required for Mr. [redacted] to understand the commitment and consequences of proceeding with the Loan Rehabilitation program.
ACS serviced the newly rehabilitated loans with a next-payment-due-date set for April 28, 2007. Mr. [redacted] failed to make his payment and the lender began diligent efforts to resolve the growing delinquency on his account, however, his federal loans were declared in default a second time after 270 days of non-payment.
On April 7, 2009, the lender filed a default claim with USA Funds, and on May 29, 2009, USA Funds purchased the loans. Again, in accordance with federal regulations, unpaid interest was capitalized (added to the principal balance of the loan at the time of claim purchase), creating Mr.
[redacted] new principal balance of $6,755.23 on which interest began to accrue and on which collection costs would be assessed. As noted above, the assessment of collection costs against defaulted federal student loan borrowers is required by federal regulation and USA Funds' collection costs are currently 223%, and they are re-calculated semi-annually based on a borrower's outstanding principal and interest balance.
Enclosed are two copies of Mr. [redacted] Statement of Accounts (SOA), one dated February 2, 2007 chronicling Mr. [redacted] payments after his first default in 2006, and another dated October 20, 2015, which illustrates the payments applied to Mr. [redacted] loans beginning after the claim was purchased by USA Funds a second time in 2009.
· In reviewing Mr. [redacted] complaint, I see that he is requesting information on how his payments were applied to the balance of the loans. I'd like to direct his attention to the Statements of Account, which breaks down each payment received on these loans and how those payments were applied to collection costs, interest, and principal amounts. I hope that resolves his questions related to payment application.
According to our records, Mr. [redacted] account was assigned to [redacted] for collections effective March 24, 2014, following the conclusion of a bankruptcy action during which time (October 27, 2009 through March 11, 2014) during which payments were made to reduce the balance on the loans. In reviewing Mr. [redacted] account history and inquiry with [redacted], I understand [redacted] made numerous attempts to reach Mr. [redacted] by phone and mail. Subsequently, federal regulations governing the 1-1-EL program require guarantors to initiate administrative wage garnishment (AWG) proceedings against all eligible borrowers.6 For purposes of clarification, before an AWG can be commenced against a borrower, collection agencies are required to request authorization from USA Funds to proceed with an AWG and to follow procedures based on federal regulations. If a borrower disputes the debt or their balance, a mandatory requirement is to schedule an administrative hearing with an impartial judge to discuss these concerns. It is also an opportunity for the borrower to set up a payment arrangement, which can rescind the AWG order. Consequently, on July 24, 2014 Mr. [redacted] was mailed a Notice Prior to Wage Withholding; however, it was not until Mr. [redacted] contacted [redacted] in writing, in a letter dated August 22, 2014 and offering to submit a $100 monthly payment, that [redacted] had any contact from him. On August 26, 2014, [redacted] mailed Mr. [redacted] the first of several loan rehabilitation information packets for him to complete. Unfortunately, Mr. [redacted] did not complete and return the rehabilitation agreement.
· For clarification purposes, it is important for Mr. [redacted] to understand that once a voluntary monthly payment was requested, a rehabilitation agreement must be completed by each potential borrower entering in to the Loan Rehabilitation program. As stated previously, this agreement contains all the critical information required for a borrower to understand the commitment and consequences of proceeding with the Loan Rehabilitation program. The federal regulations governing this program require a signed agreement to be completed and returned that demonstrates aware[redacted]s of and agreement to the terms of rehabilitation, and in order for a borrower to enter into the Loan Rehabilitation program. The rehabilitation agreement advises borrowers that in keeping with federal requirements for Loan
34 CFR 682.405(a)(2)Rehabilitation, once the qualified payments are made, a borrower's account then becomes eligible for purchase by an eligible lender.'
· Mr. [redacted] did not return a signed rehabilitation agreement to [redacted], which prevented Mr. [redacted] from entering the Loan Rehabilitation program. Subsequently, Mr. [redacted] account was recalled from [redacted] and placed with Coast effective August 17, 2015.
· In Mr. [redacted] inquiry to the Revdex.com, he states he submitted 8 payments to [redacted]. On the SOA dated October 20, 2015, beginning September 15, 2014, our records reflect the receipt of only 7 payments. If he believes he made a payment which was not posted to his loan balance, Mr. [redacted] may provide copies of front and back canceled checks for further research to our office at the following address:
USA Funds
Attn: Susan [redacted], MC 8516 P.O. Box 6028
Indianapolis, IN 46206-6028
While we sympathize with Mr. [redacted] frustration and circumstances, USA Funds is bound by the federal regulations that govern the FFELP, which requires us to diligently collect against this outstanding loan obligation. Mr. [redacted] may wish to consider the payment options that are available to defaulted borrowers as described in the enclosed Attachment A. For more information, he may log onto USA Funds' website at www.usafunds.org for additional information on these programs. Mr. [redacted] may wish to consider loan consolidation through the William D. Ford Direct Loan Program and specifically request the income contingent repayment (ICR) plan option. Under ICR, repayment is based on a borrower's income. For additional information about this program, Mr. [redacted] may log onto the Department's website regarding Direct Consolidation at www.loanconsolidation.ed.gov or call their toll-free number at 800-557-7392.
We encourage Mr. [redacted] to contact Coast at their toll-free number 800-965-4379 regarding payment options described in Attachment A and any questions he may have. The longer Mr. [redacted] delays in contacting Coast or establishing a payment plan, the higher his balance will become due to daily accruing interest. In addition, if a voluntary payment plan is not established, collections will continue through involuntary measures such as the offset of Mr. [redacted] federal taxes or administrative wage garnishment.
Finally, we understand that the federal student loan regulations governing the federal student loan program are complex and can be confusing. If Mr. [redacted] disagrees with USA Funds' handling of his account, as a student loan borrower he has the right to contact the U.S. Department of Education's Office of the Ombudsman to discuss his concerns. He may contact the Ombudsman toll-free at (877) 557-2575, via e-mail at sfaombudsmanofficea ed.gov or in writing. The mailing address is:
Office of the Ombudsman U.S. Department of Education
830 First Street, N.E.
Mailstop 5144
Washington, DC 20202-5144
I hope this matter satisfactorily addresses Mr. [redacted] questions and concerns and we appreciate you allowing us the opportunity to assist you.
Sincerely,
Susan [redacted]
Thank you for your inquiry dated October 5, 2015, addressed to United Student Aid Funds, Inc. (USA Funds), regarding Ms. [redacted]'s concerns. As the guarantor of the two federal student loans in question, USA Funds offers the following information related to Ms. [redacted]'s loan...
account.
· For purposes of clarification, we reviewed the information found on the National Student Loan Data System (NSLDS), a database maintained by the U.S. Department of Education (Department), which tracks all Title IV student loans for each borrower in the program NSLDS reflect that Ms. [redacted] also obtained federal student loans currently held by or guaranteed by other agencies that are not associated with Ms. [redacted]'s current inquiry with the Revdex.com (Revdex.com). Enclosed is a copy of Ms. [redacted]'s NSLDS report which was printed on October 5, 2015. The two federal student loans identified in Ms. [redacted]'s inquiry have been highlighted for your reference. I encourage Ms. [redacted] to access NSLDS via https://www.nslds.ed.gov/nslds_SA/ to review the current holders and statuses of all her federal student loans.
With respect to the two loans identified as guaranteed by USA Funds, and mentioned in Ms. [redacted]'s inquiry to the Revdex.com, we provide the following information:
According to our records, on May 11, 2006, USA Funds guaranteed two federal student loans totaling $6,045 for Ms. [redacted]'s attendance at Rio Salado Community College (Rio Salado) through the Bank of New York Trust and serviced by the former Affiliated Computer Services, Inc. (ACS). These loans included one subsidized Stafford loan for $2,625 and one unsubsidized Stafford loan for $3,420. The lender's history also reflects the receipt of a partial refund from Rio Salado of the unsubsidized Stafford loan for $3,420 in the amount of $213.40. Ultimately, after the refund was processed, Ms. [redacted]'s federal student loan obligation related to these two loans decreased from $6,045 to $5,831.60. Enclosed is a copy of Ms. [redacted]'s Federal Stafford Loan Master Promissory Note, which was signed electronically on May 11, 2006, and two Notices of Loan Guarantee and Disclosure Statements.
ACS serviced Ms. [redacted]'s loans while they were in repayment; however, Ms. [redacted] subsequently failed to make timely payment on these loans and they were declared in default after 270 days of non-payment on a next-payment-due date of November 14, 2011. On October 10, 2012, ACS filed a default claim on the federal student loans with USA Funds, and on December 7, 2012 USA Funds purchased the federal student loans from ACS. In accordance with federal regulations', unpaid interest was capitalized (added to the principal balance of the loan at the time of claim purchase), creating Ms. [redacted]'s new principal balance of $7,068.13 on which interest began to accrue and on which collection costs would be assessed. The assessment of collection costs against defaulted federal student loan borrowers is also required by federal regulation' and are assessed after the 60th day from claim purchase.
Subsequently, Ms. [redacted] elected to participate in the Federal Direct Loan Consolidation Program, which paid-in-full to USA Funds, by way of loan consolidation, Ms. [redacted]'s two federal defaulted student loans effective December 12, 2013. Enclosed is a copy of Ms. [redacted]'s Statement of Account (SOA) dated October 5, 2015. Please note, the entry on the SOA dated December 12, 2013 is not a payment from Ms. [redacted], but the payment the Department made to USA Funds in order to process Ms. [redacted]'s Federal Direct Consolidation Loan. Should Ms. [redacted] have further questions regarding the current repayment status of her consolidation loan, balance or payment options, she is encouraged to contact the Department's Direct loan servicer at (888)-545-4199.
The consequences of default are severe under the federal student loan programs, and include the requirement to report delinquency and default information to the national consumer reporting agencies. USA Funds is a provider of information to the consumer reporting agencies for the loans that it holds, and as required by federal regulations, both lenders and guarantors are required to report to consumer reporting agencies when a student loan becomes 90 days or more delinquent and when a loan defaults, respectively. In cases of default, a separate trade line will be reflected for both the lender, and the guarantor that purchased the default claim, on a borrower's credit record. In response to Ms. [redacted]'s concerns regarding USA Funds' credit notation as it appears on her credit report, federal regulations governing federal student loans require the guarantor to report to all national credit bureaus on a regular basis information regarding loans purchased due to default'. The default notation reported by USA Funds to the credit bureaus and in accordance with federal law, states that the default notation may remain on the account for seven years from the date Ms. [redacted]'s loans became delinquent in 2011.
Please note that consolidation of these two federal student loans into a federal Direct consolidation loan did not remove the default notation from Ms. [redacted]'s credit history. However, USA Funds
With the passage of Electronic Signatures in Global and National Commerce Act (E-Sign Act), lenders and borrowers in the federal student loan programs have the option of using electronic promissory notes and signatures. The E-Sign Act provides, in part, that a signature, contract, or other record may not be denied legal effect, validity, or enforceability solely because it is in electronic form or because an electronic signature or electronic record was used in its formation. The E-Sign Act allows the Department, guaranty agencies, lenders, schools, and borrowers to use electronic records and electronic signatures in place of traditional paper records and handwritten signatures.
2 34 CFR 682.410(b)(4)
3 34 CFR 682.410(6)(2)
4 34 CFR 682.410(b)(5)
reported her loans as paid and closed to the credit bureaus as a result of her consolidation, and Ms. [redacted]'s USA Funds' credit record should reflect a zero balance owed on these two loans. In response to Ms. [redacted]'s inquiry to the Revdex.com, USA Funds also processed an electronic update to ensure these updates where properly processed by the credit bureaus. If Ms. [redacted] still discovers discrepant information being reported in her credit file, she can mail a copy of the credit information to the following address for review:
USA Funds
Attn: Susan Leonard, MC 8516 P.O. Box 6028
Indianapolis, IN 46206-6028
Also, please bear in mind that USA Funds has no authority to mandate the retraction of prior credit reporting data made by any previous loan holders. Although the previous lender may no longer hold these two federal student loans, their credit history may remain on Ms. [redacted]'s credit report for seven years from the November 14, 2011 date of the delinquency in order to reflect Ms. [redacted]'s payment history to future creditors.
Sincerely,
Susan [redacted]
Ombudsman