Dear Steve,
I enrolled in Apollo College's Vet Tech program in 2003. Through them I obtained a loan from First National Bank for the tuition of around $6,000.00.
One of the first questions I asked the loan officer was whether or not my loan was of the type that would later be sold to another agency. I was assured that my loan was with them, and would stay with them until it was paid off.
Six months after graduation, when I was due to start making payments on the loan, I found out that the contract had been sold to Sallie Mae. I was not happy about the situation since I felt I had been deliberately lied to and the amount of my monthly payments and the rate of interest with Sallie Mae is not what had been agreed upon through the bank but I began making payments to Sallie Mae anyway.
A couple of times over the years I was able to get a forbearance (?) due to being laid off or injured and unable to work. Each time that I started up my payments aga in my rate of interest increased as well as my monthly payment amount. As a result, to this date, I have yet to begin to make any payment toward the principle, everything has gone to interest.
Now I am at a point where I am no longer able to work due to illness and disabilities. I have tried to talk to them and work out a different plan, but they have not been helpful.
Do I have any recourse for discharging this loan? I am afraid that once I go on disability they will step in and take my check and I will have nothing. Can they even do that? ANY help you can suggest will be most appreciated. Thank you!
Bonnie
Don't miss my free my weekday email newsletter with the latest tips and advice on how to beat debt and do better financially. Subscribe now. - Click Here
Dear Bonnie,
It's too bad the person told you they would keep the loan. There really was now way for them to know that since portfolio retainment would be something based on a future financial decision of the creditor. It sounds like they planned to keep the loan in-house or on-the-shelf but found a better offer in the future and took it.
It's unclear if Sallie Mae actually purchased the loan or was contracted to be just the servicer of the loan. You should check your credit report to see what it says.
I would love for you to have a copy of the original loan document you signed with the bank so we could hold Sallie Mae's feet to the fire on the interest rate issue. Most people never seem to keep those type of important papers so I'm guessing you didn't.
But the problematic part is if you were actually in default or delinquent to the point it kicked in a penalty part of the agreement that might raise your rates and payments. I can see where that happened.
Your situation brings up a very interesting issue that may have a critical impact on your loans.
It looks like Apollo College is now a part of Carrington College. In fact I don't think there is a separate entity anymore currently called "Apollo College." The critical issue here was if the Apollo College you attended was accredited at the time you were there. In looking at the online database of Carrington College campuses they were not all accredited in 2003.
If the school was not accredited then the private student loan you have might actually be completely dischargeable through bankruptcy, right now, today, in full.
Considering your looming disability issue, eliminating the loans legally with bankruptcy would be a blessing and a logical solution. You can click here to find a local bankruptcy attorney.
For information on this and links to check if your college was accredited, see this article.
If you have a credit or debt question you'd like to ask, just click here and ask away.
If you'd like to stay posted on all the latest get out of debt news and scam alerts, subscribe to my free newsletter.