After speaking with someone from the billing company the college hired, he said he knew they had the right fit. But he couldn’t understand why he was being charged for a loan that he said he knew he had paid off.
“It’s hard to prove what you paid so long ago when your bank doesn’t even exist anymore,” said McDonald, 50, of Bradford.
McDonald’s has a lot of company. Bridgewater State said it billed 1,900 former students $ 1.9 million after an internal review found that students “not properly separated” from the school had never been billed for their loans.
McDonald and former student Luigina Coco, 66, of Bridgewater, who received bills for loans from 1989 and 1993, said they were told if they didn’t pay the amount owed their credit would be damaged. So they try to roll back school instead of paying old debts that they don’t think they owe.
“I believe I paid that bill but of course I don’t have any records going back 26 and 23,” Coco said. “I don’t even remember which bank I was dealing with at the time. “
Both said they struggled to get answers. A school spokeswoman said the collection attempt rocked some of her former students, but insisted the debts are real.
“Obviously, the letters generated a lot of surprise given the time lag as well as concerns about their validity,” Bridgewater State spokeswoman Eva Gaffney said.
The school has used the same billing company, University Accounting Service, since the 1970s, and the review found no evidence that any of the alumni groups were ever asked to repay federal Perkins loans issued. between 1984 and 1994, she said.
“During its own internal review of its financial system, Bridgewater discovered a processing error which resulted in the inability to identify certain students to enable rapid loan recovery,” Gaffney said in a written statement. “No funds were lost throughout the process. “
A letter sent to those the school says have to repay loans indicates that a review of the Perkins loan program has been undertaken by Bridgewater State with the university’s accounting department and the US Department of Education. This is where the gap was found. Bridgewater State stopped participating in the Perkins loan program last year, the school said.
An executive at University Accounting’s parent company, Transworld Systems, did not respond to requests for comment on the situation on Friday.
The majority of loans are between $ 500 and $ 600, Gaffney said. She added that 15,000 students had received Perkins loans since 1958, meaning the school has no billing records for nearly 13% of all loan recipients. The school said it would not charge interest.
Most debt comes with a statute of limitations – typically six years in Massachusetts. But this is a federal student loan, and the statute of limitations does not apply. And the law that applies to Perkins loans puts considerable pressure on educational institutions to tackle delinquent loans.
Those who fail to repay their student loans risk being affected by their credit rating if the loan is reported as past due. And, because these are federal loans, the government could allow the collection of the money owed by taking tax refunds (state or federal). Collectors can also request approval to collect by entering wages.
Yet the idea of preying on people decades after failing to collect debt – even assuming the debt is valid – is wrong, said Barbara Anthony, senior researcher at Harvard’s Kennedy School of Government, lawyer and former head of state office. of consumption.
“It’s ridiculous,” she said. “I think this is grossly, grossly unfair.”
Legal doctrine could argue that so much time has passed that it is no longer reasonable to hold former students accountable, Anthony said. It is, after all, a problem that dates back more than two decades.
For those who think they’ve paid off those loans, Anthony suggests sending the collection company an affidavit – a notarized letter reciting the facts as you know them. This would include acknowledging the loan and explaining what steps were taken to try and find payment records (this involves a call to your bank or its successor, no matter how long it is).
Bank records are generally not kept for more than seven years. The last loan in recovery dates back 21 years.
Anthony also suggested trying to get help from a federal agency, politician or consumer group to advocate for the cause. In addition, the US Department of Education has an ombudsman’s office to review payment disputes.
Some of the former students have turned to Senator Elizabeth Warren’s office for help. Warren’s office said he was aware of the situation and was trying to figure out what can be done to help.
Gaffney, a spokesperson for Bridgewater State, said that since the notices were published, some have paid, while others have objected. “Certainly, the university continues to respond to individual concerns as they arise. “
McDonald said he remembers paying off the debt vividly, as it was the first he had incurred. And he is frustrated that the supposed proof that he and others owe money is the lack of documents.
“Right now it’s their word against mine,” he said, something McDonald’s noted is not heartwarming.