y question involves collection proceedings in the State of: New York
Hello--I have decided to post here in an effort to obtain information about student loans and promissory notes---or, rather, lack of promissory notes. I have been in a dispute with the U.S. Education Department for 7 years over this, and I am being bullied, lied to, threatened & extorted to pay back a large sum for student loans that I never received. This is a very long, involved saga, and I will try to explain it as briefly as I can.
WARNING: This post is REALLY REALLY REALLY long.
Here's some history: I went to grad school in the early 90's. The school wasn't a university, it was a hospital based program for advanced practice nurses. There was no "finance office" or "student loan department". The tuition was very low, and we received a meager stipend every month. It was a 2 year program, and each year I filled out student loan applications. I did not receive any loans because between myself and my husband, our contribution toward the tuition was too high to get any loan assistance.
Back in 2007, I received a letter from a collection agency, quickly followed by a letter from the U.S. Department of Education demanding over $32,000 in repayment for student loans. I sent a request for validation to the collection agency within 30 days, and sent a letter to the DoE requesting more information. Needless to say, for a few years, I got nowhere with the DoE. They sent me copies of the loan applications, which I did fill out & sign, but nothing else. No loan documents, no records from the alleged lender, nothing. All I did was lob letters back & forth from the DoE and send validation request letters to the various collection agencies they hired to chase me. Every few months, I'd get a letter from a different collection agency. Whenever I sent the validation letters, I never heard from the collection agency again. (Presumably, because they could not validate the debt they sought payment for.) Then, a couple of months later, I'd get a letter from a different collection agency. And this cycle continues until this day.
A couple of years ago, I had all I could take of this foolishness. I started intensively researching relevant laws the govern the administration of student loans, and armed with this knowledge, began writing more detailed letters to the DoE about the validity & existence of this debt. I requested that they produce certified, two-sided copies of the original loan documents. They were unable to produce certified copies of the original loan documents, so I went back to the guaranty agency that allegedly paid default claims to Sallie Mae & filed a FOIL request for all student loan documents. I also sent a letter to the purported lender requesting loan documents, as well as the school. Lo and behold, the alleged lender nor the school has any records for any student loans. Sallie Mae sent me the same copies of the loan applications that DoE sent me, nothing else.
Welllllllllllllll................what I received from the guaranty agency defies all rational thought. The guaranty agency sent me copies of fraudulent promissory notes that were not mine, internally manufactured, computer generated logs & ledgers without any records from the lender to substantiate the information in the logs/ledgers, copies of blank letters that they tried to pass off as representative of the collection letters that were sent to me. In fact, the dates on the internal logs/ledgers shows that the information was entered a couple of weeks after they received the FOIL request from me!! They were not records kept in real time. When I wrote them a letter in which I called them out on the phony promissory note, incomplete loan applications and complete lack of any lender records or disclosure notice/repayment documents, all I got was a response saying, in essence "You owe this debt because we say you owe this debt. We do not have the documents you are seeking, but you are responsible for paying this debt." It was insane. IT IS INSANE. (I actually got a letter from the general counsel at the guaranty agency stating that his "detailed explanation" of my student loans is sufficient to prove the validity of the debt and that I have to pay it. I actually started laughing at that one.)
So, I began a correspondence with the DoE over these documents, since these phony documents are what the guaranty agency submitted with its reinsurance claims to the DoE after it paid default claims to Sallie Mae back in 2001. (By the way, this also proves that Sallie Mae did not submit the federally required documents with its default claim & the guaranty agency paid it anyway, to the tune of $15,000.) The extensive research I had done revealed that certain things are absolutely necessary to prove and validate a student loan, and the student loan process is governed by federal regulations that have specific rules for certain things like loan servicing, collection actions, default claim submission, default claim payment by guaranty agencies, and reinsurance claims & payment from the U.S. Dept. of Ed. Needless to say, none of those federal regulations was followed in my case. Had any of the regulations been followed, it would have been noticed that the required loan documentation didn't exist!! However, this has not affected their opinion that I should pay this tremendous debt. They have no loan documents, they claimed to have the original loan application & promissory notes, which they do not have & have never been able to produce, yet continue to assert that I have a responsibility to pay a debt of over $31,000 (the total went down because they offset my federal tax returns, even though they cannot prove that any loans were ever disbursed or that any debt even exists.) The documents that the DoE has based their extortion demands on are the fraudulent documents they received from the guaranty agency. The thing is, THEY DON'T CARE. They want me to pay that $31,000+, even though I never received any loans.
They say that there were 3 alleged loans---a Supplemental Loan for Students in the amount of $4,000, a subsidized Stafford loan in the amount of $7,500, and an unsubsidized Stafford loan in the amount of $4,515. Chemical Bank filed default claims with the guaranty agency for all 3 loans, and received default payment for the $4,000 loan---again, without submitting any federally mandated loan docs. The other 2 got passed to Chase bank. The purported original bank was Chemical Bank, and it merged with Chase in 1996. Chase & Sallie Mae went into some sort of trust partnership in 1996 with respect to student loans----I have read a lot of material on it, but I still can't figure it out. Legally, Chase owned the loan title but Sallie Mae collected on the loan and had its own trust.................it is all very confusing to me. Anyway, apparently Sallie Mae "serviced" this loan from 1996 to 2000, and when it filed a default claim with the guaranty agency, Sallie Mae received $15,000 in payment from the guaranty agency & the guaranty agency then received over $16,000 from the DoE for a reinsurance claim.
I have received a whole bunch of documentation----some from Sallie Mae, some from the DoE, some from the guaranty agency. Most of the documentation consists of internally manufactured, computer generated logs & ledgers, poor copies of the loan applications (which, by the way, were never approved by the lender), unverifiable promissory notes. I have requested certified copies of the original, wet ink loan applications & promissory notes, as well as Disclosure Notices & repayment agreements for each of the 3 loans which I have never received. All throughout this process, the DoE kept saying that it had in is possession the original promissory notes (which it obviously doesn't, because I never received any loans.) I actually called everybody out on the fraudulent promissory note & their responses were actually quite funny---the excuses from the general counsel for the guaranty agency & DoE for that fraudulent note are unbelievable. I wish I could post everything here, but this has gotten so involved, it is ridiculous. The long & short of it is that the DoE is demanding that I pay $31,000+ for a debt that which there is no documentation to prove exists. They are literally extorting me for this money, and when I ask them to produce certified copies of the original loan paperwork, I get some excuse, or something like "We will provide this under separate cover", and the separate cover never arrives. In fact, I have a couple of letters that actually state that the documents do not exist, but that I am still responsible for paying the debt. ?????????? The debt only exists because they are claiming that it exists.
Oh, and get this-----I actually got from Sallie Mae the guaranty agency's copy of my loan application, (which I have no idea how it would have obtained unless the guaranty agency sent it to them----and that gets me to wondering who really benefited from all of this, if there was anybody on the inside) and it shows a hand written alteration in the area reserved for the lender approval. Somebody actually hand wrote something in there to falsely represent that loan funds were approved for disbursement!!! The original lender copies of the loan application do not have that on them. So, somebody at either the guaranty agency or Sallie Mae was trying to legitimize the loan amounts by illegally altering the loan app. Nice, huh? You can't make this stuff up.
What I believe happened is that when Chemical Bank & Chase merged, Chase took the entire student loan "portfolio" from Chemical Bank. What was in that "portfolio" is unknown, but the loan apps I filled out somehow got put into that portfolio as actual loan debt. In my research, I found out that when a loan is sold or transferred to a subsequent lender/loan holder, there is supposed to be something called an "indorsement" on the promissory note that memorializes the sale/transfer. There is nothing on any of the documents that have been produced that exhibit any indorsements of loan transfer. Sallie Mae apparently "serviced" the non-existent loans and eventually received default payment from the guaranty agency, but there is no proof that Sallie Mae was the loan holder at the time it filed the default claim. This whole thing is insane.
The letters from the DoE are mind boggling----they actually put into writing that there is no loan documentation yet I am responsible for paying this debt. In one of their letters, they actually told me that if I didn't like their decision that I should sue them in federal court. (which is a good thing, because that blows a hole in any kind of immunity defense they would submit---telling someone to sue them is essentially agreeing to the lawsuit.) They most likely said that because almost NOBODY sues the DoE in federal court, and they know that----but they also know that if I did sue them in federal court, they wouldn't be able to produce the original loan docs, promissory notes & repayment agreements. Pursuant to law, either the original loan documents or certified copies of the original loan docs must be produced. The DoE knows this, I have brought this to their attention numerous times, but since we are not in a legal forum they can do whatever they want because they've been granted executive powers by the Congress to collect on student loans. That means that they don't have to sue you to get a judgment to offset your tax returns or garnish your wages or social security or disability benefits. That is why I was never sued by the lender, Sallie Mae, the guaranty agency or the DoE----because they don't have the legally acceptable loan documents to support a legal claim. So, they just offset my tax returns and are stealing my money to pay a non-existent debt because Congress gave them permission to do so. I don't think Congress gave the DoE executive powers to offset tax returns & garnish wages for non-existent debt, though.
What else can I do besides suing the DoE in federal court? I have looked into going after the lender, Sallie Mae & the guaranty agency for violating the False Claims Act for submitting fraudulent documents to obtain federal funds. I would need an attorney for that. I tried reasoning with the DoE and they just don't want to hear it.
Even if I sued in federal court, what would my cause of action be? It's not breach of contract or violation of fiduciary duty, because there are no contracts. I thought about filing for bankruptcy and letting the DoE object to the discharge of the student loans---then I could request that the original loan documents be produced to prove the existence of the debt and if they couldn't be produced, then the validity of the debt could not be proven & they wouldn't be able to fight it. What I would be seeking is to have the DoE discharge or erase, for lack of a better term, the entire debt due to the inability to legally validate it. As per law, the original loan documents (or certified copies of the originals) must be produced to prove the existence of the debt. In 7 years, they haven't been able to produce any of the original loan docs (because they do not exist!!!). Everything they produced was either internally generated or the phony docs from the guaranty agency. (The simple fact that I told them that the guaranty agency submitted fraudulent documents to receive federal funds for its reimbursement claim & the DoE has done NOTHING to investigate it is a perfect example of what I'm dealing with here. Pursuant to the federal regulations, if the DoE gets wind of any fraudulent docs used for any agency in order for that agency to collect federal funds, it is supposed to investigate & demand that the guaranty agency pay that money back to the feds.) The DoE is continuing its inane demands because I am not doing anything legally to stop them. Despite their own written admission of not having the loan documents, they don't care. Even if I sued them, I have a feeling they'd fight tooth and nail and try to convince the judge that hearsay is sufficient to prove a debt.
I need help. I have an entire red well full of letters, documents, etc. that prove fraud & that no loans were ever disbursed and that no debt exists. The DoE told me that it is my responsibility to prove that the debt doesn't exist, yet the simple absence of any loan documentation isn't good enough. They said that I have to show them a letter from the lender or the school that state no loans were ever disbursed. Well, the alleged lender, Chemical Bank, is defunct. (I actually do have a letter from Chase that says they don't have any records for any loans disbursed to me.) They don't think they have to produce the loan documents to support the burden of proof that I owe this debt. If they sued me for the debt, it would be their burden to prove that the debt exists & that I owe it. They know damned well that legally it is not my responsibility to prove that I don't owe the debt. If they had the loan documents, rest assured they would have produce them a long, long time ago to justify their extortion. All they do is write letters with excuses and explanations for the issues I have brought to their attention, twist words around (for example, a rep from the DoE said that the copies of the loan docs I received were "valid copies" when I kept repeatedly requesting that certified, two-sided copies of the loan application and promissory notes be sent to me----"valid copies" means that the copy machine functioned when somebody hit the copy button & it shot out a paper copy of what was on the glass, it doesn't mean that they are certified copies of the original docs), and continue their demands that I pay this money.
Somehow, the loan applications I filled out ended up as loan debt in the loan "portfolio"---how that happened, I have no idea. There was a lot of talk about how horrible the documents were kept at Chemical Bank when it merged with Chase. I mean---on my loan applications, there isn't even any approval from the lender for any loans!!! The DoE doesn't seem to like my theory that if these 3 loans they allege exist, then there would be records from the lender (because they had to be submitted with its default claim to the guaranty agency), repayment schedules, disclosure notices & the original promissory notes. I could even understand if one or two of the documents were missing, but there is NOTHING to show that any loans were disbursed, received by me or that any student loan debt exists. I am at an impasse with the DoE. I thought about contacting Elizabeth Warren, since she is very interested and passionate about the student loan disaster that has been perpetrated by the DoE and Sallie Mae, but she is in a different state than I am.
. Interestingly enough, it appears that Sallie Mae participated in a bit of fraud in my case too-----no promissory notes, no lender records, etc. I have so much stuff that would boggle anyone's mind, it's unreal. I thought that the DoE would listen to reason, but I was wrong. It seems that they'll do anything to keep this $31,000+ debt on its asset books even though it is non-existent debt. The DoE absolutely refuses to admit that without the original loan docs & promissory notes, that this alleged debt is unenforceable----they just keep demanding & threatening that I have to pay this debt. They know that without the original promissory notes that the debt can't be enforced, so they keep saying they are in possession of the original promissory notes but are unable to produce them. I actually sent a FOIA request for the loan docs and I was sent the same phony loan documents I had received many times before, and the fraudulent loan docs are what they are relying on to support their demands that I pay this debt. Somehow, that's got to be illegal. It's got to be illegal to send collection agencies after me when the DoE has not legally validated the debt. It's got to be illegal to know that there are no original loan documents but still claim that you're in possession of the original loan documents. It's got to be illegal to pursue someone to pay a debt for over $31,000 yet have no documentation to prove that the debt is real. All of things are probably illegal, but the DoE is still demanding that I pay it anyway.
Do I have any recourse? I would sue, but finding a lawyer to sue a federal entity in federal district court is impossible. They don't want to go up against the DoE. Plus, the DoE will seek summary judgment/dismissal based on grounds that have nothing to do with the lawsuit. They'll seek dismissal based on procedural errors, which is allowed, but it is only their way of avoiding the real issues that they cannot legally validate this alleged debt. I have done consulting work for medical malpractice attorneys & I would be able to file a lawsuit in state supreme court pro se but I know that federal district court is a whole different animal. I don't want to run the risk of not having my attorney's fees paid by the DoE if it was dismissed on procedural grounds. I don't think I would be able to recover any monies myself, and all I really want is for them to discharge/erase this stupid, non-existent debt, refund all the tax returns that were offset, quit offsetting any more tax refunds, and quit chasing me & demanding that I pay this debt. I'm not looking to make any money----although they should be sanctioned for harrassing me for so many years despite knowing the alleged debt was bogus. It would be a different story if I never disputed it, and didn't provide valid evidence that the documents they produced were fraudulent and that the guaranty agency submitted that fraudulent documentation to obtain federal funds. They don't even take any of that into consideration----all they say is "It doesn't matter. You are responsible for repaying this debt." They used to say that I was legally bound by the terms of the promissory notes, but they stopped that when I brought to their attention that the promissory notes are phony. Now, I just owe it because they say I do.
I have spent so much time looking online for other who are in the same boat as me, and can't find anything. I actually wonder if the DoE buries any search results that would come back from a Google search, because it is impossible to believe that I am the only person with this dilemma. I found a case about a woman who went to a college in California and was being harassed to pay back loans that she didn't owe because she withdrew from the college, and the college kept the loan funds that it was supposed to return to the lender. After haggling with the DoE for 20 years, they finally discharged her loan debt. But for 20 years they kept demanding that she pay the debt. How on earth is a person supposed to "prove that a debt doesn't exist"? Isn't the fact that there are no promissory notes, repayment schedules or lender records enough to satisfy that burden?
Help?My question involves collection proceedings in the State of:

