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  1. #1
    Join Date
    Jul 2010
    Posts
    1

    Default Principal Balance Different then Collection Agency Says

    My question involves collection proceedings in the State of Hawaii:

    Hello, I have a question pertaining to my Federal Student Loan. I have been having different collection agencies harassing me for the past 15 years about my Federal Student Loan. The problem is the collection agencies all have different "Principal Balances" then what I originally took out. I originally took out a Student loan for $1,500.00 in 1994. I was going to school full time when I was hit by a car while riding my motorcycle. I didn't graduate in 1994 as planned due to skull fractures and brain damage as well as nerve damage to my right side. I did end up graduation in 1995 and had my loan deferred to a later date. In 1996 my loan was already sold off to a collection agency and this is where my problem starts. AFSA DATA CORPORATION sends me a payment slip for $1,500.00 plus interest of $20.75. At this time I am still under a Total Disability Deferment Agreement and have no way to pay the loan back. The second collection agency, USA Services said I have a principal balance of $2,663.67 plus interest of $234.70 for a total of $2,898.37. This amount is almost double of what my principal balance was. In February 5, 1997 my University sends me a letter stating I have a Federal Perkins Loan for the amount of $1,500.00 and I need to pay it off. At this point I am still disabled and not working. On December 10, 1999 a third collection agency sends me a letter stating I owe $9,999.49 for outstanding principal and interest plus $2,419.69 collection costs for a total of $12,419.18. In, 2002 I moved to Australia and live there until September 2008 in which I move back to Hawaii. I now get letters from US Department of Education stating I owe $2,090.71 plus $1,383.33 interest and $845.58 fees and costs for a total of $4,319.62. I figured I would write them a check for the total amount when a week later I get another letter from the same place stating I owe $7,776.33 principal balance, plus $5,860.15 for interest and $3,319.11 for fees and costs for a total of $16,955.59. A month later I get another letter from the same place but this time they say I owe $9,697.27 principal balance plus $6,368.38 for interest and $3,889.19 for fees and costs for a total of $19,994.68.

    The US Department of Education calls me up today asking when I'm going to pay off my $19,994.68 student loan. I told the guy when they are able to show me that my original principal balance was $9,697.27. He then states they don't need to provide me with any of that information. He also states that the principal balance is different from what I borrowed because of interest and penalties. I guess he doesn't know the meaning of principal balance because that amount should never change only the total amount accrued with interest and penalties.

    So my question is what can I do about the amount of my student loan? Obviously I didn't borrow what they are claiming and they are charging me interest and penalties on an amount I never borrowed. I need to talk to a Lawyer about this but I don't know where to find one in the State of Hawaii/Honolulu or what type to even look for? I have no problems paying back the original principal balance of $1,500.00 plus interests and penalties, but I don't think I should have to pay back on something I never borrowed in the first place.

  2. #2
    Join Date
    Sep 2005
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    Behind a Desk
    Posts
    98,846

    Default Re: Principal Balance Different then Collection Agency Says

    You can ask whomever you're dealing with to document that they're authorized to settle the loan, and to provide an accounting of the amount they're claiming is due.

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