Quote Quoting craftygal
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However, the private loans I had obtained in school have since defaulted and went into collections.
I'm assuming at this point that the loans were from a private lender and that you're certain that the loans were not federally guaranteed.
Quote Quoting craftygal
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They were 30 days defaulted through AES in February of 2009.
Quote Quoting craftygal
In May my cosigner on the loans called me that she was served with papers for court because the collections agency was suing us. I never received any paperwork or notification of a lawsuit.
If you defaulted in February of 2009 and your cosigner was served with a lawsuit in May of 2013, it is likely that the lender was aware of the statute of limitations and filed the lawsuit right before the statute ran. You can verify the filing date with the court or with your cosigner.

What is the current status of the litigation?

Why has the creditor been unable to locate and serve you?
Quote Quoting craftygal
The statute of limitations in PA is four years and the loans are all originally from various months in 2005 but defaulted in February of 2009. Is this company legally allowed to sue me for these loans?
The relevant date is not when you borrowed the money, but is when you defaulted on the loans. You have suggested to us that you defaulted in February, 2009.
Quote Quoting craftygal
When I started going through the documents recently, I noticed the amount they are trying to collect more than double of the original amount borrowed.
That may be accurate, based upon contractual late fees, penalties and attorney fees. Read your loan contract to see what you agreed to pay in the event of a default.
Quote Quoting craftygal
I would be willing to take out a smaller loan in order to settle the collections accounts, but I would only be willing to pay about 10% of the current balance which I doubt they will accept.
I would concur that the odds of their finding that offer acceptable hover around zero percent. You have the option of declaring bankruptcy, but that does nothing to protect your cosigner, whom you seem content to leave on the hook for the money.
Quote Quoting craftygal
Should I dispute the NCT amounts with the credit bureaus?
If you believe that the amount reported is inaccurate, that would be a means by which you could seek correction.