My question involves collection proceedings in the State of: Indiana
Several years ago I enrolled in a clock hour based program. I chose this particular trade school over several others in my area because they told me they qualified for additional loans and funding options which would cover my living expenses since they only operated from 9-5.
3-4 months into the program I started to suspect something was amiss with the student loan funding. Loan checks were presented to me face down and held down so I could not turn them over to see the amount. I was told the face of the check contained the SSN of other students in addition to mine and that they wanted to maintain the privacy of that information. My requests to the financial aide officer to discuss my loans were denied so I began calling Sallie Mae and the Department of Ed trying to get an understanding of what was going on. One of the reps I talked to told me to check the NSLDS website. Upon doing so, I discovered that I had just shy of $30,000 in loans in only 3-4 months. I gave the website to other students and some of them were finding themselves between $50,000 and $120,000 in student loan debt while other students found they had NO student loans even though they had been receiving monthly living expense checks.
When we started questioning these amounts, the school administration found that I was the one who had helped these other students. I was pulled into the office and told I either take a 3 month leave of absence or be expelled from the program because I was a distraction. I agreed to the leave of absence as I was hoping that would give me time to get my loans sorted out. I signed the paperwork for the leave of absence and went home.
A month or so later I found out that the school withdrew me from the program instead of placing me on a leave of absence. The financial aid officer quit and essentially went into hiding. The school removed all student files from the school and took them to the home of the owner of the school. Requests for records were denied. The Department of Ed opened an investigation against the school which is still going on several years later.
Last year I attempted to get things settled in this matter. I retained a lawyer who was able to finally secure my student records. Upon receiving them, I found that the school had been classifying me as a credit hour based student and had changed my grade classification every month in order to obtain new loans in my name (from Freshman to Sophomore and back to Freshman). Other documents show that I was a clock hour based student (which was correct). Title IV guidelines at the time of my enrollment stated that I was entitled to $9,500 in loans (subsidized and unsubsidized) for the first 600 hours and $10,500 for the second 600 hours for a total of $20,000. At the time that I was withdrawn by the school, I had less than 600 hours.
Based off this documentation, my lawyer was going to file against the school since the fraud is very obvious based off the documents I have. Just as we went to file, the Department of Ed contacted him and asked him not to file as they have their own federal case that they are building against the school and our case would cause a problem for them. He agreed and I was back to square one.
The Department of Ed contacted me and said they would be placing my loans in administrative forbearance, as I have been using my own forbearance time up until this point. A month later I received a call from them yet again. This time they told me that my loans were DIRECT loans and that DIRECT loans have very strict fraud guidelines for administrative assistance of any kind, including forbearances. They said that the type of fraud committed by the school did not fall into any of the defined categories so an administrative forbearance was not possible. They said their investigation will continue and it's possible that at some point my loans may be corrected but they have no idea as to when this will happen. It's already 4 years into this process and none of the students have had any kind of resolution.
Here are my questions...
1. Do I have any other avenues available to me to get these loans corrected? I have contacted the Office of the Inspector General, the Ombudsman, the Ombudsman of my loan servicer, even an FBI agent that has an investigation going. Every action I've attempted with these alternate avenues has been stopped by the Department of Ed due to their investigation and pending legal action.
2. Is there a statute of limitations for me to take action against the school? It has been 4 years since this started and I'm still going.
I know this situation is very confusing and messy. These loans are causing major credit/financial issues for myself and the other students involved and yet we seem to have no recourse whatsoever besides the Department of Ed. Please feel free to ask any questions as I may have missed some info in my post. Thank you in advance!

