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  1. #1
    Join Date
    Nov 2008
    Posts
    3

    Default State School Student Loan

    My question involves collection proceedings in the State of: Oregon.

    My girlfriend defaulted on her student loans of about $10,000 eight years ago.

    I know that these are not federally backed loans, however, they are a student loan so my question is this. (I believe she did say that interest started accumulating on the loans even while she was in school.)

    How would one determine if SOL would apply? I believe it is 6 years for promissory notes in Oregon.

    She tried to make this right about 4 years ago, but was told if she could give them $3,500 they couldn't even put her on a re payment plan at all. This of course lead her to paying them nothing at all.

    And of course now they are threatening all sorts of stuff --and you guessed it she is unemployed.

    I know major changes to the law where put in place in 2005 would this apply to her case?

  2. #2

    Default Re: State School Student Loan

    Go to the National Student Loan Database (NSLD) for students and see if this loan is listed. This data base lists all Title IV student loans whether or not they are guaranteed or originated by the federal government. If this loan is not listed in the NSLD, then it is not protected by sect. 1091a of Title IV which bars a statute of limitations defense. Still, you would need to see if your state has a 4 yr, 6 yr, or 10 yr SOL You need to get a PIN to access this database.

  3. #3
    Join Date
    Nov 2008
    Posts
    3

    Thumbs up Re: State School Student Loan

    Thank you that is just what we needed to know.

    -Regards,

  4. #4
    Join Date
    Nov 2008
    Posts
    3

    Default Re: State School Student Loan

    So she checked and the defaulted loan was not shown.

    She did have one listed, but it was not defaulted, she is current on it.

    What should she do now? The Oregon Statue of Limitations is 6 years on promissory notes. This loan was in default for at least 8 without payment.http://www.expertlaw.com/forums/imag...s/confused.gif

    I am thinking she will need to get a lawyer to get them off her back.

    I still don't understand why they wouldn't let her resume payments and take the loan out of default when she offered without the big down payment. Seems really backward, but hey treating our students like dead beat Dad's and criminals is how we do it here in the USA.

  5. #5

    Default Re: State School Student Loan

    You indeed may wish to consult an attorney prior to being sued to develop a better understanding of where you stand in light of the specific facts of your case. In doing so, you may wish to read Education Resources Institute (TERI) v. Piazza, 17AD3d 513 (2005)(Supreme Court of State of New York); HEMAR v. Ryerson, 108 S.W.2d 90 (2003) (see also same case on appeal in MO in 2006) and subsequent cases that interpreted these decisions involving private student loans and a statute of limitations defense. You will need to go to a law library to get the TERI decision, but you can google to get both Hemar decisions.

    If your wife is sued, do not expect a plaintiff to state the exact date of default and what state statute of limitations applies. I am not familiar with your state's conflict of laws rules, but it is possible that an Oregon court may use a longer SOL if the "choice of law" is from another state. Generally speaking, though, a state court will not import another state's longer statute of limitations as a matter of policy, but these are issues that only an attorney in your state can advise you on. In both of the Hemar and TERI cases, the plaintiff alleged that the loan was not accelerated or in "default." Before seeing an attorney, gather the documents to show when the loan became defaulted and thus capable of suit on the entire balance. You may also wish to bring in old credit reports if you have these to show the date of default reported by the creditor or if you don't have these, you can get a current credit report and see whether this loan is even being reported. If as you say, 8 years is outside the 7 year credit reporting time frame and the fact that the loan is not reported on your wife's credit report would tend to show that it is outside the 6 year SOL.

    Why would a creditor wait so long to sue versus getting a judgment and then try to garnish wages at 10%-25%? For one, the judgement rate might be significantly lower than the contract rate. For example, some Sallie Mae Signature loans can go as high as 14% + Libor which is about 17.375%. I believe the Oregon judgment rate is t-bill + 4% which is about 4.5% these days. Other states have fixed judgment rates at about 8 or 12%.

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