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  1. #1
    Join Date
    Jan 2011
    Posts
    4

    Default I Messed Up with My Student Loan - Now the State is Going to Charge Me

    My question involves collection proceedings in the State of: MN


    Hello all, new to the boards. I have a question regarding student loans and the collections from the state (taxes and such)

    So here is my situation: Before going to school, I knew that I was going to need student loans. In MN, and I'm sure in other states, you have to go through loan counseling before you can get student loans. During the process, I was told that if I were to fail any classes, (get an F) I would need to pay for that class out of pocket, as student loans would not cover it.

    With this knowledge in mind, I'll continue my experience. I was going to school, taking a full semester, when I got very sick mid-way through the semester (we're talking MRI's, hospitalization, the whole nine yards.) I was able to provide documentation for my illness, and some professors were very nice about it, while others were not. One particular professor told me to withdraw from his class because I had fallen so far behind. It's his class, what he says goes, so I did.

    I finished the rest of my semester with C's or higher, with the exception of my one W (withdrawl.) I asked my school if this would affect my student loans. They said NO. Withdrawls do not count against a person, especially with the documentation I was able to provide. I thought I had asked the right questions.

    Anyway, I decided to transfer schools, to another MN college within the state system. I applied for financial aid, was approved, even got an award letter. I took another semester of classes, and had some pretty strange and unusual circumstances occur during the semester (was living with someone who didn't tell me that the place I was living in was in foreclosure and that I would have to find a new place to live within a week, that's my own fault, I should have asked more questions) I moved, and had all my mail forwarded to my new address. Anyway, at the end of the semester, I thought I was in good standing with my student loans and with the school. I had no reason to question my situation, so why would I?

    Well I received a letter from the collections department at the state of MN saying that I owed $3000 total from both schools - the amount for the class I withdrew from at the first school, and then for my entire semester at the other school. I about had a stroke. I couldn't believe what I was reading. I started shaking and crying and heaving. They said that they were going to charge me with a crime and come after me for the entire amount, and that they were going to levy my paychecks, revoke my driver's license, come after any assets that might be of value, and a whole bunch of other scary things.

    I called the state and told them that I wanted to set up a payment plan. I told them that I was willing to surrender my MN tax refund to go towards the payment of my debt, as well as give them 10% of each paycheck. The man on the phone let me explain my situation (illness, withdrawl, transfer schools, moved to a new place) and told me that sometimes life happens, you deal with it, and you move on. I told him that I felt like a dirty, awful person for letting something like this happen, and I really do. I've been crying everyday about it since it happened.

    My question is, can the state come after me through the courts even though I have already agreed to a payment plan and to surrender my state tax refund? I'm interested in becoming a police officer at some point (obviously my life is not stable enough for this to occur right now) but I don't think I will be able to now with something like this on my record. (EDIT: Will I have a record now because of this?) I also want to know if my employer will find out? I work at a place where police frequent, and they could easily run a background on me and I want to know if this will show up. I told the state to take it out of a checking account that is not connected to my direct withdrawl from my job to try to prevent my employer from finding out. Another question is, is this going to affect my chances of being able to go to school in the future, even if I don't attend a school affiliated with the MN college system?

    I looked myself up under the MN courts page and haven't found anything yet, but I guess the state tried to contact me a few times but couldn't because I had moved. I feel so so so bad, I never would have tried to intentionally defraud the schools (or unintentionally defraud them, for that matter) because they know who I am, they have my social security number, they know (for the most part, I guess) where to find me!!!!!

    Sorry it's so long, I tried to give as many specifics without sharing too many personal details or identifying myself. I know you probably hear it on here all the time, but this was a truly honest mistake. I messed up, I didn't ask enough questions, I didn't ask the right questions, and I am so ashamed. Any information would be greatly appreciated. Thank you!

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

    Default Re: I Messed Up with My Student Loan - Now the State is Going to Charge Me

    If you are paying as agreed on a payment plan, the state would have no need to litigate. Is it within the realm of possibility? Sure. Mistakes happen. But it's unlikely to happen if you keep your end of your repayment deal.

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