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  1. #1
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    Aug 2007
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    Thumbs up Private Loans and Statute of Limitations

    I live in PA and thought I had consolidated all of my student loans about 5 years ago. Now Sallie Mae and another collection agency for TERI are saying that I have private student loans that were not consolidated. They are not eligible to be consolidated into my federal consolidation loan because they are private loans.

    My last payment to Sallie Mae and the other were over 4 years ago and the statute of limitations in PA is 4 years. They are claiming that there is no statute of limitations (SOL) on student loans. I agree that there is no SOL on federally guaranteed student loans but these are private. I checked the federal website nslds.com and it shows all of my federal student loans as being consolidated.

    I read the federal statute regarding no statute of limitations, section 1091a. Under paragraph (a)(2)(B), it states: a guaranty agency that has an agreement with the Secretary under section 1078 (c) of this title that is seeking the repayment of the amount due from a borrower on a loan made under part B of this subchapter after such guaranty agency reimburses the previous holder of the loan for its loss on account of the default of the borrower. Part B is for stafford loans (subsidized and unsubsidized) and plus loans. There are limits to the amount that are federally insured (Section 1075).

    As I read it, my private loans were not made under this subchapter as they are not eligible to be consolidated into my federal loans. Since my last payments were over 4 years ago, I believe that the SOL has run. They insist that there is no SOL and to make a small payment while we work this out. I know making a payment will start the clock again on the SOL so I told them forget about it. I know that private student loans are not dischargable in bankruptcy but I am not filing for bankruptcy.

    I am the point of telling them to sue me because I believe the SOL has run and will not pay them. I already have over 125k know and 25 more years to pay. Is there anything I am missing? cases? other statutes?

  2. #2
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    Default Re: Private Loans and Statute of Limitations

    "As you read it" means nothing, if in fact the loans are not dischargeable. If these are Sallie Mae and TERI loans, I expect that they are nondischargeable. I can't verify anything about your loans, as I don't actually have any specific information about them, so you'll have to try to do that yourself.

  3. #3
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    Default Re: Private Loans and Statute of Limitations

    I am not concerned if they are not dischargeable because I am not in bankruptcy. The question still remains, Does a state statute of limitations apply to private student loans?

    I believe it does and the collection agencies are trying to circumvent the SOL by claiming that the guarantor has an agreement with the Dept. of Ed. so the SOL does not apply to student loans. They are also equating non dischargeable in bankruptcy with the SOL not applying. But if the loans are private, then they can have all the agreements they want but the loan was not made under Part B. Therefore, the SOL applies. Since there have been no responses indicating otherwise, I will assume I am correct.

  4. #4
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    Default Re: Private Loans and Statute of Limitations

    Sorry, I had intended to say "Not subject to a statute of limitations". I suspect you'll have to pay your debts. If there's something more to the story, I'm in no position to make guesses. You can wait until they sue you and then see how the court rules.

  5. #5
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    Default Re: Private Loans and Statute of Limitations

    About 4 years ago, TERI sued me on a private student loan. My only defense was the statute of limitations. The attorney representing TERI agreed and discontinued the lawsuit. Private student loans are different than federal student loans so do not let them bully you into paying. Check with an attorney to protect your rights.

  6. #6
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    Default Re: Private Loans and Statute of Limitations

    It's important, of course, to determine what type of loan you have and whether it would be subject to the statute of limitations. But it would be dangerous to assume that TERI loans are always subject to a statute of limitations, as that is not the case.

  7. #7
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    Default Re: Private Loans and Statute of Limitations

    TERI has bugged me for years re their private student loans. At first, I just sent a simple cease and desist letter to their dumb collection agencies. Now that I know they are well beyond my state's SOL I have been more blatent and dared them to sue me. They have never responded. They say you should never dare a collection agency to sue because if they can then they will. Well I did dare them and they didnt. They keep hiring new collection agencies but I keep shutting them up. They are a paper tiger. I cant speak for all TERI loans but if it is pre-1999 I bet they are screwed depending on your state's SOL laws. Remember also that no one can put negative info on your credit report if over 7 years old. If they do dispute it first then sue if they persist. Student lenders are used to shooting fish in a barrel. If you put up a good fight they will find an easier target. The collection agency calls may never stop but you can shut them up quickly with a cease and desist and demand for proof. And after 7 years they cant harm your credit anymore so tell them to go F... themselves!!!!!!!!!!!!

  8. #8
    Almosthome Guest

    Default Re: Private Loans and Statute of Limitations

    Quote Quoting pgh_atty
    View Post
    About 4 years ago, TERI sued me on a private student loan. My only defense was the statute of limitations. The attorney representing TERI agreed and discontinued the lawsuit. Private student loans are different than federal student loans so do not let them bully you into paying. Check with an attorney to protect your rights.
    I think this is exactly right. Two other points: Check your loan documents to determine what state's laws govern - the SOL may be different in that state. Also, be careful what you say to bill collectors - the payment of a small sum will indeed reactivate the debt but you may also do that just by acknowledging that you owe the money. Yikes. Just another reason not to speak with the bill collectors. It's just a game with them and if the person is dumb enough to fall into their trap, they won.

  9. #9

    Default Re: Private Loans and Statute of Limitations

    Yes state SOL laws apply to private student loans that are not made under the loan programs specified by the relevant federal statute. You need to research the particular program that your loans were made under to determine your particular case. Private student loans are just like any other consumer loan, other than the fact that they are generally non-dischargeable in bankruptcy.
    Edit/Delete Message

  10. #10
    Join Date
    Mar 2007
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    Smile Re: Private Loans and Statute of Limitations

    Absolutely correct Rosa and Almost. Private student loans ARE subject to your state's SOL or maybe another states depending on your prom note. I sent a strongly worded response to a collection law firm who was attempting to collect on my private loans. I got no response and no one sued me. These vultures used to send a CA after me every 6 months but it has now been over a year and I have heard nothing from them. Also even if the note says a certain states law applies that does not mean that is the case. Many states including mine have laws which say that any out of state SOL agreed in a contract can be nullified if it is "unreasonable or unfair" to the defendant. The so-called experts or knowitalls here dont want to tell you the truth so wonder which side they are on. I am on your side and will tell the truth. Good luck everyone.

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