Dear Ms***,
Update
I received an update on July 1, 2016, from a representative from *** *** *** ***, which is a contractor for the U.SDepartment of Education (Department), that the ticket to split Ms***’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 correctedPlease be advised, however, that the correction has been made on *** ***’ databased
NSLDS is a database maintained by the Department, which tracks all Title IV student loans for each borrower in the program.
Credit Reporting for 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. *** *** 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 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***’s concerns regarding *** ***’ 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 *** *** 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,
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), *** *** is not required to report monthly payment amounts to the credit bureaus. *** *** does, however, report outstanding balance information on accounts it holds on a monthly basisAlso, please bear in mind that *** *** 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***’s *** ***’ two federal student loans, their credit history may remain on her credit report for seven years from the date of delinquency in order to reflect her payment history to future creditors
I would like to clarify that *** *** and *** ***, Inc(***), formerly known as ***, Inc(***) are not affiliated companies. *** *** does, however, contract with *** for certain administrative functions, including the collection of delinquent and defaulted student loans.
If Ms*** 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:
*** ***
Attn: Susan L***, MC P.OBox Indianapolis, IN 46206-
If you have further concerns or questions, please contact me at (317) 806-or at susan.l***@usafunds.org.
Sincerely,
Susan L***
***
*** ***
Thank you for your inquiry dated May 14, regarding Ms. ***'s concerns. Based upon the information provided by Ms*** in her inquiry, we are unable at this time to find any data associated with her name or phone number. If Ms*** is able to
provide the name (s) and/or number (s) of the individuals or entities that are calling her, we may be able to better research her concerns and rectify the problem.Ms*** may respond with this information via the Revdex.com's portal.Kind regards, Susan L***OmbudsmanUSA Funds
Revdex.com:
I have reviewed the response made by the business in reference to complaint ID ***, and have spoken to Ombudsman on June 29th and was assigned a case number and is in the process of submitting my documents to themI will find this resolution being satisfactory to me upon them correcting this account with Equifax, Experian & TransUnionI have provided a copy of how this account how it's being reported with all three credit bureaus negatively & inaccurately and affecting my credit scoreRegards,
*** ***
Dear Ms***,The attached letter, and the enclosures identified in the letter, were mailed to Mr*** regarding his allegation of fraud on May 19, 2015. Included in this response are Mr*** Federal Stafford Application and Promissory Note signed and dated on
February 27, and two Notices of Loan Guarantee and Disclosure Statements dated April 14, 2008. USA Funds’ position regarding the validity of the default has not changed and remains as conveyed to Mr*** in this letter. While we sympathize with Mr*** 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*** 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*** may wish to consider loan consolidation through the WilliamDFord 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*** 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.Effective January 4, 2015, Mr*** account was placed in collections with Enhanced Recovery Company, LLC (ERC). We encourage Mr*** to contact ERC at their toll-free number 800-893-regarding payment options and any questions he may have. The longer Mr*** delays in contactingERC or establishing a payment plan, the higher his balance will become due to daily accruing interest. In addition, ifa voluntary payment plan is not established, collections will continue through involuntary measures such as the offset of Mr*** federal taxes or administrative wage garnishment. If Mr*** disagrees with USA Funds’ handling of his account, as a student loan borrower he has the right to contact the U.SDepartment 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 [email protected] or in writing. The mailing address is: Office of the OmbudsmanU.SDepartment of EducationFirst Street, N.E.Mailstop 5144Washington, DC 20202-5144 I hope this matter satisfactorily addresses Mr*** questions and concerns and we appreciate you allowing us the opportunity to assist you. Sincerely,Susan L***OmbudsmanUSA Funds
I am sorry for the length of time it has taken USA Funds to research and resolve this complaintHowever, as I let you know a couple of weeks ago, we have been attempting to obtain agreement from *** to repurchase the affected loan and return it to servicingAs you and I discussed, my review of the servicer's (***) collection activities did show that the borrower's phone number used by the servicer was not the one that Mr*** provided in his complaintMy research shows that Mr*** was in contact with *** with respect to this loan as evidenced by payments made in and several phone contacts to *** initiated by the borrower in that year that resulted in forbearance being granted on this loanIt appears that Mr*** returned to school and his loan was forborne and deferred for several yearsThe next due date set on his loan following the forbearance/deferment end was 05/24/*** did conduct all appropriate delinquency servicing on this account, including appropriate skip-tracing activity throughout Mr***'s delinquencyIn addition, *** sent multiple letters, both to the references provided on the loan application, as well as to the last-known address Mr*** confirmed for himself, in their efforts to contact Mr*** and assist him in resolving the growing delinquency status of his loan We conclude that the default status on this loan is validIt appears that Mr*** simply lost track of this particular loan since, as he pointed out, all of his other loans are in deferment, and of course, it makes sense that he would not have chosen to default on one while keeping the others in good standing, as he asserts in his complaintTherefore, in an effort to resolve this situation for Mr***, I contacted *** (the previous owner of this loan) and requested that they repurchase this loan and return it to servicingToday, *** confirmed that they agree to do so, and informed me that they have already restored the loan to servicing on their systemMr*** should be receiving correspondence from *** informing him of his new repayment termsUpon the completion of the repurchase process, USA Funds will delete our default reporting from Mr***'s credit reportsWith respect to Mr***'s other educational loans, I'd like to make sure that he is aware of the US Department of Education's National Student Loan Database System (NSLDS)This system was developed specifically to assist borrowers keep track of all of their federal student loans and is useful in identifying the loans' servicers and the last reported status of each loanI hope this information is useful to Mr***If I can be of further assistance in this matter, I can be reached at the phone number belowSincerely,
Barbara W***
Director, Claim Management
USA Funds, Inc(317) 578-
Better Busin
0.05pt;">ess Bureau Attn: [redacted] 151 N. Delaware Street, Suite 2020 Indianapolis, IN 46204-2599 Re: # [redacted] - [redacted]
Dear Ms. [redacted]: Thank. you for your inquiry dated November 14, 2016 regarding Ms. [redacted]'s concerns. As the guarantor of five of Ms. [redacted]'s federal student loans, United Sn1dent Aid Funds, Inc. (USA Funds) offers the following information related to Ms. [redacted]'s account. According to our records, beginning December 2007 through September 2009, USA Funds guaranteed five federal student loans totaling $19,000 for Ms. [redacted]'s attendance at the University of [redacted] and [redacted] University through the SLM Education Trust and serviced by Navient Solutions, Inc. (Navient), formerly lmown as SallieMae, In.c. (SallieMae). These loans included two subsidized Stafford loans for $4,500 and $3,500, respectively, and three unsubsidized Stafford loans for $4,000, $1,000, and $6,000, respectively. • I would like to clarify that USA Funds and Navient are not aff iliated companies. USA Funds does, however, contract with Navient for certain administrative functions, including the collection of delinquent and defaulted student loans. The lender's history also reflects the following disbursements were canceled: the third disbursement for $1,166 of the second subsidized loan for $3,500, and the third disbursement for $2,000 of the third unsubsidized loan for $6,000. Ultimately, USA Funds guaranteed a total amount of $15,834 for these five loans. Enclosed are copies of Ms. [redacted]'s Federal Stafford Loan Master Promissory Notes signed and dated on December 4, 2007 and September 30, 2008', and the corresponding five Notices of Loan Guarantee and Disclosure Statements . 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 fonn or because an electronic signature or electronic record was used in its formation. 111e 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.
usAfunds United Student Aid Funds, In Mailing Address c. Corporate Headquarters
Thank you for your inquiry dated April 25, 2016 regarding Ms. [redacted]'s concerns. As the guarantor of Ms. [redacted]' federal consolidation loan, United Student Aid Funds, Inc....
(USA Funds) offers the following information related to Ms. [redacted]'s loan account. · I would like to clarify that USA Funds is a national guarantor of student loans based in Indianapolis; in its role as a guarantor, USA Funds administers FFELP loans on behalf of the U.S. Department of Education (Department), including the federal consolidation loan that is cited in Ms. [redacted]'s inquiry. Also, for purposes of explanation, USA Funds does not play the role in the Federal Family Education Loan (F1±L) program as a banker or lender. In addition, [redacted] Solutions, Inc. ([redacted]), formerly known as SallieMae, Inc. (SallieMae), is not affiliated with USA Funds. USA Funds does, however, contract with [redacted] for certain administrative functions, including the collection of delinquent and defaulted student loans. According to our records, on November 6, 2001, USA Funds guaranteed Ms. [redacted]'s federal consolidation loan. Enclosed is the Federal Consolidation Loan Application and Promissory Note signed and dated on June 22, 2001. The total consolidation loan amount, originally obtained through [redacted] as the lender and serviced by ACS Education Services (ACS), was $14,037.36. According to our records, on April 1, 2011 Ms. [redacted] filed a Chapter 13 bankruptcy and her loan servicer at the time - ACS - promptly suspended Ms. [redacted]'s account from further servicing, as required by the automatic stay provision of the U.S. Bankruptcy Code, and filed a bankruptcy claim with USA Funds, as required by the Higher Education Act of 1965, as amended, in the amount of $12,693.48. The amount of the claim purchased included $12,285.30 in loan principal and $408.18
in unpaid accrued interest. On May, 9, 2011, [redacted] acting on behalf of USA Funds, filed a Proof of Claim for $12,285.30 (the principal due at the time of the bankruptcy filing date) with the Bankruptcy Court in order to share in payments made through Ms. [redacted]'s bankruptcy plan. Federal consolidation loans are simple interest loans and interest accrues daily on the unpaid outstanding principal balance. There is no provision in federal regulation to prohibit the assessment of additional accruing interest during a bankruptcy stay, thus, interest continued to accrue on Ms. [redacted]'s outstanding principal balance during the bankruptcy action. 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.
During the bankruptcy stay, USA Funds received a total of $1,904.22 in payments from the bankruptcy court. During that same period, Ms. [redacted]'s loan had accrued approximately $3,294 in additional accrued interest (see attached copy of Ms. [redacted]'s Statement of Account (SOA) dated January 6, 2016 fora summary of payments received). Since the Proof of Claim was not paid in full through the plan, Ms. [redacted] was still responsible for the remaining balance of the claim plus accrued interest at the conclusion of the bankruptcy action.
Under bankruptcy law, student loans are non-dischargeable debts unless an adversary proceeding (hardship petition) is filed with the court to determine if exempting the loan from discharge would impose an undue hardship on the borrower to repay. While a review of the bankruptcy court documents shows that Ms. [redacted] received a general discharge on December 23, 2015, from the bankruptcy court there was no evidence to show that Ms. [redacted] filed an adversary proceeding to show cause fora hardship petition. Specifically, the Bankruptcy Code at Section 523(a)(8) states:
"(a) A discharge under Section 727, 1141, 1228(a), or 1328(b) of this title does not discharge an individual debtor from any debt—
**
"(8) for an educational benefit overpayment or loan made, insured or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or a non-profit institution; or for an obligation to repay funds received as an educational benefit, scholarship or stipend, unless excepting such debt from discharge under this paragraph will impose an undue hardship on the debtor and the debtor's dependents
The loan in question qualifies under this section of the Bankruptcy Code because it is an education loan insured by the federal government, made under a program funded in part by the federal government and in part by USA Funds, a private non-profit corporation. In order to qualify for the exception provided by this provision, Ms. [redacted] must have filed an adversary proceeding and proved undue hardship. No complaint or petition alleging undue hardship was filed in this bankruptcy action; therefore, this loan was not discharged in her bankruptcy case.
At the conclusion of the bankruptcy proceedings, federal regulations require the loan to be repurchased by a lender and returned for servicing. USA Funds requested that the loan be repurchased and the repurchase of the account was completed on March 11, 2016, and [redacted] became Ms. [redacted]'s new servicer on her loan and commenced servicing on Ms. [redacted]'s account
· For questions regarding the current status of her federal consolidation loan, or repayment options, Ms. [redacted] should contact [redacted], Office of the Customer Advocate, at (888)5454199 or advocateasalliemae.com.
If you have further concerns or questions, please contact me at (317) 806-1265. I hope this matter satisfactorily addresses Ms. [redacted]'s questions and concerns and we appreciate you allowing us the opportunity to assist you.
Sincerely,
Susan [redacted] USA Funds
Revdex.com:
I have reviewed the response made by the business in reference to complaint ID [redacted], and find that this resolution would be satisfactory to me.
Regards,
[redacted] I already gave the telephone number so I don't understand what the problem is but I shall do so again. 866-497-8723. The only people to ever pick up the phone were "Mark" and "Monica". Upon looking deeper I called my bank, NONE of my student loan payments have EVER been late. Which was what these people were implying. I begged "Monica" to leave me alone because I had just had surgery and couldn't use good judgement. She refused to leave me alone and was demanding I had to make a payment. I hung up on her because I knew she was lying.
Thank you for your inquiry dated August 15, 2016 regarding Mr. [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 Mr. [redacted]’s inquiry. We appreciate Mr. [redacted]’s and the Revdex.com’s patience and we expect to have a complete review and response to you by September 8, 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.
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 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.
Better Busi[redacted]s Bureau:
I have reviewed the response made by the busi[redacted]s 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.
Regards,
[redacted]
I am rejecting responce because of the collection practices. I am sick and tired of this company threatening me with garnishment over and over again. I don't care how much paperwork they have sent me period, this is considered harassment and the interest that has been collected on this loan is completely unheard of. I should not have to contact them by letter again when I just sent them a letter on 10-17-15, they didn't respond to that letter at this time and now in order for me to stop another possible threat of a garnishment, I have to send them another letter. After I received this response, someone by the name of Katie contacted my mother's home. Whomever it was should not have contacted my mother place PERIOD and once again, this is considered harassment. My mother has nothing to do with this loan, so you can tell USA Funds\Coast Professional to stop contacting my mother's place because I don't live there. This is why I need an attorney to stop these collection practices of both companies and just because this is a student loan from the government, you can't just take something just because you can and will and you can't do anything about it. If this loan is to be taken care of, I am not going to send them anything about my finances because it is none of their business(there are privacy laws out there) and I know what I can and can't afford. Like I said before, I have other financial responsibilites to take of, so hopefully they will accept the agreement that I have stated on the letter I sent to Coast 3+ weeks ago. Thank you.
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.
Sorry. Let I said. I have NEVER given my information to nor have I attended any classes with WGU. why woukd I when ihave been only oclass away from a BS on management at the University of [redacted]? The m o have everdone with [redacted] is request information. I have never signed up for classes. Why would I when wgu dies not transfer credits anywhere. Ie: their credits ate invaluable at other colleges. This is one school loan that is not my responsibility.
Regards,
[redacted]
New Roman'">Thank you for your inquiry dated June 27, 2014 regarding Ms. [redacted]'s concerns. As the guarantor of several of Ms. [redacted]'s federal Stafford loans, United Student Aid Funds, Inc. (USA Funds) offers the following information related to Ms. [redacted]'s loan account. For purposes of clarification, please be advised that SallieMae, Inc. (SallieMae) and USA Funds are two separate and unaffiliated entities.
I have contacted SallieMae in order to resolve Ms. [redacted]'s issues and was advised on July 3, 2014, that SallieMae has written off the balances remaining on the loans that were guaranteed by USA Funds. In addition, SallieMae has tried to reach Ms. [redacted] at two different phone numbers they have on file for her, and by email, in order to provide her with an update.
If you have further concerns or questions, please contact me at (317) 806-1265. I hope this matter satisfactorily addresses Ms. [redacted]'s questions and concerns and we appreciate you allowing us the opportunity to assist you.
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 was unable to view the response. The pdf file was locked.
Regards,
[redacted]
Thank you for your inquiry on behalf of Ms. [redacted]. As I understand it, Ms. [redacted] believes she should not be responsible for paying the loan balance that remains following her attendance at [redacted] University As the guarantor of Ms. [redacted]'s federal loan, USA Funds offers the following response to Ms. [redacted]'s concerns, We would like to clarify that USA Funds is a national guarantor of student loans based in Indianapolis, IN and that USA Funds and Navient Solutions, Inc. (Navient), formerly known as SallleMae, Inc. (SallieMae) are not affiliated companies. USA Funds does, however, contract with Navient for certain administrative functions, including the collection of delinquent and defaulted student loans. For purposes of explanation, GC Services is one of many collection agencies utilized by Navient to collect defaulted student loan accounts on USA Funds' behalf. According to our records, weguaranteed a loan for Ms. [redacted] to attend [redacted] University This loan was originally guaranteed in the amount of $6625; subsequently $5474.78 was cancelled, resulting in an adjusted loan guarantee amount of $115022, disbursed on 10/13/05 for Ms. [redacted]'s attendance for the school term of September 2005 through February 2006. In our research of Ms. [redacted]'s concerns, we have obtained records from the school (enclosed). The first attachment is the financial transaction history This document shows the school's receipt of Ms. [redacted]'s unsubsirlirpd Stafford loan in the original amount of $3213.61, That payment was posted on October 14, 2005. Subsequently, there is a refund of her Stafford loan in the amount of $2097.90, leaving a loan balance at that time of $1115.71. I'd like to bring your attention to the Official Transcript, which shows that Ms. [redacted] transferred a total of 25 hours to this school, and she did complete 1 credit hour during the period of time she attended this school (note that it also appears that her work was through their on-line program). The school reported that Ms. [redacted] withdrew from the school on October 17, 2005. That can be found on the second attachment, which is the Official Transcript from [redacted] University You can see the refunds and credit adjustments that were made to Ms. [redacted]'s account following that date, on the financial transaction history Ultimately the total fees charged to Ms. [redacted] for the period of time that she was enrolled in this school is $1180.71, which can be found at the bottom the document. In summary, it appears that Ms. [redacted] did enroll and also, did attend the school (working through their on-line program, it appears) for a short period of time. It also appears that the school refunded the monies according to their refund policy, in a timely manner after Ms. [redacted]'s withdrawal from the school. Schools have the right to refund less than the full amount charged and paid for their program once the student enrolls and attends, and different schools have different policies on how they calculate the amount to refund. Any questions Ms. [redacted] may have related to how the refund amount was calculated would have to be discussed with [redacted] University as we do not have that information. With respect to Ms. [redacted]'s federally guaranteed loan, we confirm that the remaining balance is a valid debt. Our records show that this loan is currently in default. We paid the default claim to Navient, her loan holder at the time, in the amount of $1282.49 on 11/22/13. I have enclosed a Statement of Account demonstrating all financial activity-that has occurred with the loan since. I would to provide some information regarding federally guaranteed loans, and also provide Ms. [redacted] with a list of options she has to return the loan to good standing and restore her credit rating. · Federal student loans are simple interest loans on which interest accrues daily With regard to payment application, payments arc applied in the following order as required by federal regulations: portion of each payment is first applied to outstanding collection costs, next to outstanding interest, and the remaining amount to principals. · USA Punds is required by federal regulations to assess collection costs on defaulted loans, which adds to the loan's payoff balance. · USA Funds is required by federal regulations to conduct Administrative Wage Garnishment to collect the balance on defaulted loans, should the borrower fail to establish satisfactory repayment arrangements on the loan. · USA Funds is also a participant in the US. Department of the Treasury's (Treasury) federal tax offset program administered by the Department. As such, USA Funds may be required to offset Ms. [redacted]'s tax returns unless she makes satisfactory repayment arrangements with her collection agency. For these reasons, we strongly encourage Ms. [redacted] to contact her collection agency and work toward resolving this loan obligation. 7%3Vbile we sympathize with Ms. [redacted]'s circumstances, we are bound by the federal regulations that govern the Federal FamilyEducation Loan program, which require us to diligently collect against this outstanding loan obligation. Ms. [redacted]'s loan is currently in collections with GC Services and we encourage her to contact GC Services to discuss the options that exist to assist her with her repayment obligation Accordingly Ms. [redacted] may wish to consider the payment options that are available to defaulted borrowers as described in the enclosed Attachment A. Ms. [redacted] can contact GC Services at their toll -free number, 800-753-8354, to discuss any of these options. The longer Ms. [redacted] delays in contacting GC Services or establishing a payment plan, the higher her 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 offset of Ms. [redacted]'s federal taxes or benefits. If you have further concerns or questions, please contact me at (317) 578-6060. I hope this matter satisfactorily addresses Mr. Baker's questions and concerns and we appreciate you allowing us the opportunity to assist you.
Sincerely,
Barbara W[redacted], Director, Claim Management
Dear Ms***,
Update
I received an update on July 1, 2016, from a representative from *** *** *** ***, which is a contractor for the U.SDepartment of Education (Department), that the ticket to split Ms***’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 correctedPlease be advised, however, that the correction has been made on *** ***’ databased
NSLDS is a database maintained by the Department, which tracks all Title IV student loans for each borrower in the program.
Credit Reporting for 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. *** *** 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 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***’s concerns regarding *** ***’ 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 *** *** 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,
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), *** *** is not required to report monthly payment amounts to the credit bureaus. *** *** does, however, report outstanding balance information on accounts it holds on a monthly basisAlso, please bear in mind that *** *** 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***’s *** ***’ two federal student loans, their credit history may remain on her credit report for seven years from the date of delinquency in order to reflect her payment history to future creditors
I would like to clarify that *** *** and *** ***, Inc(***), formerly known as ***, Inc(***) are not affiliated companies. *** *** does, however, contract with *** for certain administrative functions, including the collection of delinquent and defaulted student loans.
If Ms*** 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:
*** ***
Attn: Susan L***, MC P.OBox Indianapolis, IN 46206-
If you have further concerns or questions, please contact me at (317) 806-or at susan.l***@usafunds.org.
Sincerely,
Susan L***
***
*** ***
Thank you for your inquiry dated May 14, regarding Ms. ***'s concerns. Based upon the information provided by Ms*** in her inquiry, we are unable at this time to find any data associated with her name or phone number. If Ms*** is able to
provide the name (s) and/or number (s) of the individuals or entities that are calling her, we may be able to better research her concerns and rectify the problem.Ms*** may respond with this information via the Revdex.com's portal.Kind regards, Susan L***OmbudsmanUSA Funds
Revdex.com:
I have reviewed the response made by the business in reference to complaint ID ***, and have spoken to Ombudsman on June 29th and was assigned a case number and is in the process of submitting my documents to themI will find this resolution being satisfactory to me upon them correcting this account with Equifax, Experian & TransUnionI have provided a copy of how this account how it's being reported with all three credit bureaus negatively & inaccurately and affecting my credit scoreRegards,
*** ***
Dear Ms***,The attached letter, and the enclosures identified in the letter, were mailed to Mr*** regarding his allegation of fraud on May 19, 2015. Included in this response are Mr*** Federal Stafford Application and Promissory Note signed and dated on
February 27, and two Notices of Loan Guarantee and Disclosure Statements dated April 14, 2008. USA Funds’ position regarding the validity of the default has not changed and remains as conveyed to Mr*** in this letter. While we sympathize with Mr*** 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*** 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*** may wish to consider loan consolidation through the WilliamDFord 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*** 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.Effective January 4, 2015, Mr*** account was placed in collections with Enhanced Recovery Company, LLC (ERC). We encourage Mr*** to contact ERC at their toll-free number 800-893-regarding payment options and any questions he may have. The longer Mr*** delays in contactingERC or establishing a payment plan, the higher his balance will become due to daily accruing interest. In addition, ifa voluntary payment plan is not established, collections will continue through involuntary measures such as the offset of Mr*** federal taxes or administrative wage garnishment. If Mr*** disagrees with USA Funds’ handling of his account, as a student loan borrower he has the right to contact the U.SDepartment 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 [email protected] or in writing. The mailing address is: Office of the OmbudsmanU.SDepartment of EducationFirst Street, N.E.Mailstop 5144Washington, DC 20202-5144 I hope this matter satisfactorily addresses Mr*** questions and concerns and we appreciate you allowing us the opportunity to assist you. Sincerely,Susan L***OmbudsmanUSA Funds
I am sorry for the length of time it has taken USA Funds to research and resolve this complaintHowever, as I let you know a couple of weeks ago, we have been attempting to obtain agreement from *** to repurchase the affected loan and return it to servicingAs you and I discussed, my review of the servicer's (***) collection activities did show that the borrower's phone number used by the servicer was not the one that Mr*** provided in his complaintMy research shows that Mr*** was in contact with *** with respect to this loan as evidenced by payments made in and several phone contacts to *** initiated by the borrower in that year that resulted in forbearance being granted on this loanIt appears that Mr*** returned to school and his loan was forborne and deferred for several yearsThe next due date set on his loan following the forbearance/deferment end was 05/24/*** did conduct all appropriate delinquency servicing on this account, including appropriate skip-tracing activity throughout Mr***'s delinquencyIn addition, *** sent multiple letters, both to the references provided on the loan application, as well as to the last-known address Mr*** confirmed for himself, in their efforts to contact Mr*** and assist him in resolving the growing delinquency status of his loan We conclude that the default status on this loan is validIt appears that Mr*** simply lost track of this particular loan since, as he pointed out, all of his other loans are in deferment, and of course, it makes sense that he would not have chosen to default on one while keeping the others in good standing, as he asserts in his complaintTherefore, in an effort to resolve this situation for Mr***, I contacted *** (the previous owner of this loan) and requested that they repurchase this loan and return it to servicingToday, *** confirmed that they agree to do so, and informed me that they have already restored the loan to servicing on their systemMr*** should be receiving correspondence from *** informing him of his new repayment termsUpon the completion of the repurchase process, USA Funds will delete our default reporting from Mr***'s credit reportsWith respect to Mr***'s other educational loans, I'd like to make sure that he is aware of the US Department of Education's National Student Loan Database System (NSLDS)This system was developed specifically to assist borrowers keep track of all of their federal student loans and is useful in identifying the loans' servicers and the last reported status of each loanI hope this information is useful to Mr***If I can be of further assistance in this matter, I can be reached at the phone number belowSincerely,
Barbara W***
Director, Claim Management
USA Funds, Inc(317) 578-
Better Busin
0.05pt;">ess Bureau Attn: [redacted] 151 N. Delaware Street, Suite 2020 Indianapolis, IN 46204-2599 Re: # [redacted] - [redacted]
Dear Ms. [redacted]: Thank. you for your inquiry dated November 14, 2016 regarding Ms. [redacted]'s concerns. As the guarantor of five of Ms. [redacted]'s federal student loans, United Sn1dent Aid Funds, Inc. (USA Funds) offers the following information related to Ms. [redacted]'s account. According to our records, beginning December 2007 through September 2009, USA Funds guaranteed five federal student loans totaling $19,000 for Ms. [redacted]'s attendance at the University of [redacted] and [redacted] University through the SLM Education Trust and serviced by Navient Solutions, Inc. (Navient), formerly lmown as SallieMae, In.c. (SallieMae). These loans included two subsidized Stafford loans for $4,500 and $3,500, respectively, and three unsubsidized Stafford loans for $4,000, $1,000, and $6,000, respectively. • I would like to clarify that USA Funds and Navient are not aff iliated companies. USA Funds does, however, contract with Navient for certain administrative functions, including the collection of delinquent and defaulted student loans. The lender's history also reflects the following disbursements were canceled: the third disbursement for $1,166 of the second subsidized loan for $3,500, and the third disbursement for $2,000 of the third unsubsidized loan for $6,000. Ultimately, USA Funds guaranteed a total amount of $15,834 for these five loans. Enclosed are copies of Ms. [redacted]'s Federal Stafford Loan Master Promissory Notes signed and dated on December 4, 2007 and September 30, 2008', and the corresponding five Notices of Loan Guarantee and Disclosure Statements . 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 fonn or because an electronic signature or electronic record was used in its formation. 111e 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.
usAfunds United Student Aid Funds, In Mailing Address c. Corporate Headquarters
Thank you for your inquiry dated April 25, 2016 regarding Ms. [redacted]'s concerns. As the guarantor of Ms. [redacted]' federal consolidation loan, United Student Aid Funds, Inc....
(USA Funds) offers the following information related to Ms. [redacted]'s loan account. · I would like to clarify that USA Funds is a national guarantor of student loans based in Indianapolis; in its role as a guarantor, USA Funds administers FFELP loans on behalf of the U.S. Department of Education (Department), including the federal consolidation loan that is cited in Ms. [redacted]'s inquiry. Also, for purposes of explanation, USA Funds does not play the role in the Federal Family Education Loan (F1±L) program as a banker or lender. In addition, [redacted] Solutions, Inc. ([redacted]), formerly known as SallieMae, Inc. (SallieMae), is not affiliated with USA Funds. USA Funds does, however, contract with [redacted] for certain administrative functions, including the collection of delinquent and defaulted student loans. According to our records, on November 6, 2001, USA Funds guaranteed Ms. [redacted]'s federal consolidation loan. Enclosed is the Federal Consolidation Loan Application and Promissory Note signed and dated on June 22, 2001. The total consolidation loan amount, originally obtained through [redacted] as the lender and serviced by ACS Education Services (ACS), was $14,037.36. According to our records, on April 1, 2011 Ms. [redacted] filed a Chapter 13 bankruptcy and her loan servicer at the time - ACS - promptly suspended Ms. [redacted]'s account from further servicing, as required by the automatic stay provision of the U.S. Bankruptcy Code, and filed a bankruptcy claim with USA Funds, as required by the Higher Education Act of 1965, as amended, in the amount of $12,693.48. The amount of the claim purchased included $12,285.30 in loan principal and $408.18
in unpaid accrued interest. On May, 9, 2011, [redacted] acting on behalf of USA Funds, filed a Proof of Claim for $12,285.30 (the principal due at the time of the bankruptcy filing date) with the Bankruptcy Court in order to share in payments made through Ms. [redacted]'s bankruptcy plan. Federal consolidation loans are simple interest loans and interest accrues daily on the unpaid outstanding principal balance. There is no provision in federal regulation to prohibit the assessment of additional accruing interest during a bankruptcy stay, thus, interest continued to accrue on Ms. [redacted]'s outstanding principal balance during the bankruptcy action. 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.
During the bankruptcy stay, USA Funds received a total of $1,904.22 in payments from the bankruptcy court. During that same period, Ms. [redacted]'s loan had accrued approximately $3,294 in additional accrued interest (see attached copy of Ms. [redacted]'s Statement of Account (SOA) dated January 6, 2016 fora summary of payments received). Since the Proof of Claim was not paid in full through the plan, Ms. [redacted] was still responsible for the remaining balance of the claim plus accrued interest at the conclusion of the bankruptcy action.
Under bankruptcy law, student loans are non-dischargeable debts unless an adversary proceeding (hardship petition) is filed with the court to determine if exempting the loan from discharge would impose an undue hardship on the borrower to repay. While a review of the bankruptcy court documents shows that Ms. [redacted] received a general discharge on December 23, 2015, from the bankruptcy court there was no evidence to show that Ms. [redacted] filed an adversary proceeding to show cause fora hardship petition. Specifically, the Bankruptcy Code at Section 523(a)(8) states:
"(a) A discharge under Section 727, 1141, 1228(a), or 1328(b) of this title does not discharge an individual debtor from any debt—
**
"(8) for an educational benefit overpayment or loan made, insured or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or a non-profit institution; or for an obligation to repay funds received as an educational benefit, scholarship or stipend, unless excepting such debt from discharge under this paragraph will impose an undue hardship on the debtor and the debtor's dependents
The loan in question qualifies under this section of the Bankruptcy Code because it is an education loan insured by the federal government, made under a program funded in part by the federal government and in part by USA Funds, a private non-profit corporation. In order to qualify for the exception provided by this provision, Ms. [redacted] must have filed an adversary proceeding and proved undue hardship. No complaint or petition alleging undue hardship was filed in this bankruptcy action; therefore, this loan was not discharged in her bankruptcy case.
At the conclusion of the bankruptcy proceedings, federal regulations require the loan to be repurchased by a lender and returned for servicing. USA Funds requested that the loan be repurchased and the repurchase of the account was completed on March 11, 2016, and [redacted] became Ms. [redacted]'s new servicer on her loan and commenced servicing on Ms. [redacted]'s account
· For questions regarding the current status of her federal consolidation loan, or repayment options, Ms. [redacted] should contact [redacted], Office of the Customer Advocate, at (888)5454199 or advocateasalliemae.com.
If you have further concerns or questions, please contact me at (317) 806-1265. I hope this matter satisfactorily addresses Ms. [redacted]'s questions and concerns and we appreciate you allowing us the opportunity to assist you.
Sincerely,
Susan [redacted] USA Funds
Revdex.com:
I have reviewed the response made by the business in reference to complaint ID [redacted], and find that this resolution would be satisfactory to me.
Regards,
[redacted] I already gave the telephone number so I don't understand what the problem is but I shall do so again. 866-497-8723. The only people to ever pick up the phone were "Mark" and "Monica". Upon looking deeper I called my bank, NONE of my student loan payments have EVER been late. Which was what these people were implying. I begged "Monica" to leave me alone because I had just had surgery and couldn't use good judgement. She refused to leave me alone and was demanding I had to make a payment. I hung up on her because I knew she was lying.
Re: #[redacted] – [redacted]...
[redacted]
Dear Ms. [redacted]:
Thank you for your inquiry dated August 15, 2016 regarding Mr. [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 Mr. [redacted]’s inquiry. We appreciate Mr. [redacted]’s and the Revdex.com’s patience and we expect to have a complete review and response to you by September 8, 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]
Ombudsman
USA Funds
/smf
s/investig/official/smf-[redacted].doc
Three emails have been sent, two resent, which include the original email and passwords, to [redacted] with the Revdex.com.
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]
Please refer to the attachment. If an original is needed, please let me know.
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]
Ombudsman
USA Funds
/smf
s/investig/official/smf-[redacted].doc
Better Busi[redacted]s Bureau:
I have reviewed the response made by the busi[redacted]s 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.
Regards,
[redacted]
I am rejecting responce because of the collection practices. I am sick and tired of this company threatening me with garnishment over and over again. I don't care how much paperwork they have sent me period, this is considered harassment and the interest that has been collected on this loan is completely unheard of. I should not have to contact them by letter again when I just sent them a letter on 10-17-15, they didn't respond to that letter at this time and now in order for me to stop another possible threat of a garnishment, I have to send them another letter. After I received this response, someone by the name of Katie contacted my mother's home. Whomever it was should not have contacted my mother place PERIOD and once again, this is considered harassment. My mother has nothing to do with this loan, so you can tell USA Funds\Coast Professional to stop contacting my mother's place because I don't live there. This is why I need an attorney to stop these collection practices of both companies and just because this is a student loan from the government, you can't just take something just because you can and will and you can't do anything about it. If this loan is to be taken care of, I am not going to send them anything about my finances because it is none of their business(there are privacy laws out there) and I know what I can and can't afford. Like I said before, I have other financial responsibilites to take of, so hopefully they will accept the agreement that I have stated on the letter I sent to Coast 3+ weeks ago. Thank you.
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.
Sorry. Let I said. I have NEVER given my information to nor have I attended any classes with WGU. why woukd I when ihave been only oclass away from a BS on management at the University of [redacted]? The m o have everdone with [redacted] is request information. I have never signed up for classes. Why would I when wgu dies not transfer credits anywhere. Ie: their credits ate invaluable at other colleges. This is one school loan that is not my responsibility.
Regards,
[redacted]
New Roman'">Thank you for your inquiry dated June 27, 2014 regarding Ms. [redacted]'s concerns. As the guarantor of several of Ms. [redacted]'s federal Stafford loans, United Student Aid Funds, Inc. (USA Funds) offers the following information related to Ms. [redacted]'s loan account. For purposes of clarification, please be advised that SallieMae, Inc. (SallieMae) and USA Funds are two separate and unaffiliated entities.
I have contacted SallieMae in order to resolve Ms. [redacted]'s issues and was advised on July 3, 2014, that SallieMae has written off the balances remaining on the loans that were guaranteed by USA Funds. In addition, SallieMae has tried to reach Ms. [redacted] at two different phone numbers they have on file for her, and by email, in order to provide her with an update.
If you have further concerns or questions, please contact me at (317) 806-1265. I hope this matter satisfactorily addresses Ms. [redacted]'s questions and concerns and we appreciate you allowing us the opportunity to assist you.
Sincerely,
Susan L[redacted]
Ombudsman
USA Funds
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 was unable to view the response. The pdf file was locked.
Regards,
[redacted]
Thank you for your inquiry on behalf of Ms. [redacted]. As I understand it, Ms. [redacted] believes she should not be responsible for paying the loan balance that remains following her attendance at [redacted] University As the guarantor of Ms. [redacted]'s federal loan, USA Funds offers the following response to Ms. [redacted]'s concerns, We would like to clarify that USA Funds is a national guarantor of student loans based in Indianapolis, IN and that USA Funds and Navient Solutions, Inc. (Navient), formerly known as SallleMae, Inc. (SallieMae) are not affiliated companies. USA Funds does, however, contract with Navient for certain administrative functions, including the collection of delinquent and defaulted student loans. For purposes of explanation, GC Services is one of many collection agencies utilized by Navient to collect defaulted student loan accounts on USA Funds' behalf. According to our records, weguaranteed a loan for Ms. [redacted] to attend [redacted] University This loan was originally guaranteed in the amount of $6625; subsequently $5474.78 was cancelled, resulting in an adjusted loan guarantee amount of $115022, disbursed on 10/13/05 for Ms. [redacted]'s attendance for the school term of September 2005 through February 2006. In our research of Ms. [redacted]'s concerns, we have obtained records from the school (enclosed). The first attachment is the financial transaction history This document shows the school's receipt of Ms. [redacted]'s unsubsirlirpd Stafford loan in the original amount of $3213.61, That payment was posted on October 14, 2005. Subsequently, there is a refund of her Stafford loan in the amount of $2097.90, leaving a loan balance at that time of $1115.71. I'd like to bring your attention to the Official Transcript, which shows that Ms. [redacted] transferred a total of 25 hours to this school, and she did complete 1 credit hour during the period of time she attended this school (note that it also appears that her work was through their on-line program). The school reported that Ms. [redacted] withdrew from the school on October 17, 2005. That can be found on the second attachment, which is the Official Transcript from [redacted] University You can see the refunds and credit adjustments that were made to Ms. [redacted]'s account following that date, on the financial transaction history Ultimately the total fees charged to Ms. [redacted] for the period of time that she was enrolled in this school is $1180.71, which can be found at the bottom the document. In summary, it appears that Ms. [redacted] did enroll and also, did attend the school (working through their on-line program, it appears) for a short period of time. It also appears that the school refunded the monies according to their refund policy, in a timely manner after Ms. [redacted]'s withdrawal from the school. Schools have the right to refund less than the full amount charged and paid for their program once the student enrolls and attends, and different schools have different policies on how they calculate the amount to refund. Any questions Ms. [redacted] may have related to how the refund amount was calculated would have to be discussed with [redacted] University as we do not have that information. With respect to Ms. [redacted]'s federally guaranteed loan, we confirm that the remaining balance is a valid debt. Our records show that this loan is currently in default. We paid the default claim to Navient, her loan holder at the time, in the amount of $1282.49 on 11/22/13. I have enclosed a Statement of Account demonstrating all financial activity-that has occurred with the loan since. I would to provide some information regarding federally guaranteed loans, and also provide Ms. [redacted] with a list of options she has to return the loan to good standing and restore her credit rating. · Federal student loans are simple interest loans on which interest accrues daily With regard to payment application, payments arc applied in the following order as required by federal regulations: portion of each payment is first applied to outstanding collection costs, next to outstanding interest, and the remaining amount to principals. · USA Punds is required by federal regulations to assess collection costs on defaulted loans, which adds to the loan's payoff balance. · USA Funds is required by federal regulations to conduct Administrative Wage Garnishment to collect the balance on defaulted loans, should the borrower fail to establish satisfactory repayment arrangements on the loan. · USA Funds is also a participant in the US. Department of the Treasury's (Treasury) federal tax offset program administered by the Department. As such, USA Funds may be required to offset Ms. [redacted]'s tax returns unless she makes satisfactory repayment arrangements with her collection agency. For these reasons, we strongly encourage Ms. [redacted] to contact her collection agency and work toward resolving this loan obligation. 7%3Vbile we sympathize with Ms. [redacted]'s circumstances, we are bound by the federal regulations that govern the Federal FamilyEducation Loan program, which require us to diligently collect against this outstanding loan obligation. Ms. [redacted]'s loan is currently in collections with GC Services and we encourage her to contact GC Services to discuss the options that exist to assist her with her repayment obligation Accordingly Ms. [redacted] may wish to consider the payment options that are available to defaulted borrowers as described in the enclosed Attachment A. Ms. [redacted] can contact GC Services at their toll -free number, 800-753-8354, to discuss any of these options. The longer Ms. [redacted] delays in contacting GC Services or establishing a payment plan, the higher her 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 offset of Ms. [redacted]'s federal taxes or benefits. If you have further concerns or questions, please contact me at (317) 578-6060. I hope this matter satisfactorily addresses Mr. Baker's questions and concerns and we appreciate you allowing us the opportunity to assist you.
Sincerely,
Barbara W[redacted], Director, Claim Management