Complaint Review: Allied Interstate - Minneapolis Minnesota

ok heres the skinny folks Allied is one of the official contractors for the department of ed, they have the job of getting defaulted loans onto the DoEs loan rehabilitation program, what this amounts to is getting the debtor to agree to payments, and ensuring the debtor continues to make their payments for 9 months. once the debtor has successfuly completed the rehabilitation program they then transfer the loan back to the DoE who then shops the loan out to various lenders, the goal being for one of the lenders to resume collecting payments in the usual fashion for student loans. once Allied has the loan contract (allied does not buy DoE loans) the DoE will not deal with you, at all, any and all calls or letters will be directed to Allied until you complete the rehab program, in short as far as the DoE is concerned, you are damaged goods, until Allied says otherwise. as far as my opinions of them, they do flagrantly bend the rules when trying to get their claws on a potential "client", but if you had a powerful branch of the governmant backing you, you might play a little more losely with the rules too. That said, once you are in bed with them, they do a decent job of doing their jobs. request the verification through Allied, because more than likely the DoE will tell you to call them, unless you have some sort of serious issue with allied, and you can convince someone at the DoE to listen

I am an ex student loan collector...I spent almost 10 years collecting them. I also worked as a financial aid officer at the University of Minnesota so I have a ton of insight on both sides of student loan lending and collecting. For starters....Student loans that are federally insured are NEVER sold to collection agencies. NEVER. Same goes with tuition accounts from schools or Perkins loans that are collected by the school. There is no SOL on any of this debt. To the original poster. Allied validated your debt with the PHEAA prom note. It is never considered old junk debt. Time and time again I hear "I paid it off", only to find out the student borrowered multiple loans. Back when your loans were dispersed they were called GSL and SLS loans. Perkins were called NDSL's. You can actually log into NSLDS to find out what loans you borrowed and what has been paid off. However due to the age of your loan, there is a possiblity it might not be in the system. You can also check with the school to find out exactly what you borrowed. Have you actually sent a copy of the release to Allied?? Normally when a student loan is paid off, the lender will send a release letter with a copy of the prom note marked paid in full. Word of Advice ....never ever cease a student loan collection agency. That is an invitation to be garnished. The DOE can tract down your employer very easily. We used to get lists of employment information from the Feds and if we could not contact the borrower, we would immediatley sent a 30 day garnishment notice out. The do have to notify you that they intend to garnish your wages. However it is extremely important that they have the correct address to send that notice to. Even if you cease a CA from calling you at work, it does not stop them from verifying your employement to start garnishment proceedings against you. Most of all....if you have problems with a CA, there is always the Student Loan Ombudsman. They will intervene to help you get a reasonable payment plan. Google to DOE site...there is a ton of information on student loans and defaulting. You can also read the Higher Education Act which are the rules and regs for student loans.

Why is the meaning of the release letter he has stating he is clear from the get go then? He stated:"They did not know that I paid it in the 90's and I faxed them a letter from PHEAA say that my Payments are recognized and thanks for them And I also faxed them a release letter that they Also sent me in 2001 4 years after they stopped Taking the payments." Does this release letter hold no weight?

Why is the meaning of the release letter he has stating he is clear from the get go then? He stated:"They did not know that I paid it in the 90's and I faxed them a letter from PHEAA say that my Payments are recognized and thanks for them And I also faxed them a release letter that they Also sent me in 2001 4 years after they stopped Taking the payments." Does this release letter hold no weight?

First, you probably were in default in the 90's if your checks were being garnished. When you are being garnished, your payments never take the loan out of default. Second, if you made so little money that not very much was sent in, your payments were very possibly going to pay the interest only. By now, the amount you owe on your student loan, with interest and fees, should be around double what you originally borrowed. If Allied says you owe that doubled amount, then your previous payments may not have been applied at all. For example, the total amount my husband borrowed in 1989 was $6000 and by 2003, we owed $11,500, which included the original loan amount, interest, and default costs and fees. Third, as everyone who posts on this site state, do not speak with the collection agency. Did you ever try calling the Dept of Education? I would have spoken to them before Allied. By the way, did Allied say you owe the Dept of Education, or another entity? When my husband's wages were garnished, the amounts paid by his employer did get credited to the student loan balance, and were enough to reduce the balance. It depends on how much 15% of your disposable income is, and depends on how much you owe in the first place. Also, with student loans, you usually have to pay cautiously for 1 year before the loan can come out of default (US Dept of Education website). However, I believe this does count as a new arrangement to pay, thus resetting the 7 year clock. The Dept of Ed should have records or your previous payments. Also, as I stated before, when my husband's loan went into garnishment, it did go back to the Dept of Ed and we never heard from Allied again. Allied did not garnish, the Dept of Ed did.

Another chapter, In the 23 year old student loan, is this true. The supervisor told me since I was paying Involuntary in the 90's I was always in default!! And would never pay my loan off!! So the 11 Years I paid each month, taken out of my pay Check was set up to fail and NEVER pay it off. So he told me if I set a payment plan up with Him and pay cautiously for 6 months I'll be out Of default. And he said that the worst thing i Can do is let them garnish my pay because I'll never pay it off, is that true??????????? He also said that he does not know how many Payments I made in those 11 year nor the balance Because it was paid off from the previous agency But this is the first collection agency who ever Called me about this. Are they just trying to set up a payment plan so They get paid the commission so it does'nt go To the next collection agency, because this is The second guy who contacted me from allied I sent the first guy 2 validation letters. Is it true That they can put me in for wage garnishment Can allied do it or does it have to go back to the Dept of ed?????? Thanks.

Another chapter, In the 23 year old student loan, is this true. The supervisor told me since I was paying Involuntary in the 90's I was always in default!! And would never pay my loan off!! So the 11 Years I paid each month, taken out of my pay Check was set up to fail and NEVER pay it off. So he told me if I set a payment plan up with Him and pay cautiously for 6 months I'll be out Of default. And he said that the worst thing i Can do is let them garnish my pay because I'll never pay it off, is that true??????????? He also said that he does not know how many Payments I made in those 11 year nor the balance Because it was paid off from the previous agency But this is the first collection agency who ever Called me about this. Are they just trying to set up a payment plan so They get paid the commission so it does'nt go To the next collection agency, because this is The second guy who contacted me from allied I sent the first guy 2 validation letters. Is it true That they can put me in for wage garnishment Can allied do it or does it have to go back to the Dept of ed?????? Thanks.

Another chapter, In the 23 year old student loan, is this true. The supervisor told me since I was paying Involuntary in the 90's I was always in default!! And would never pay my loan off!! So the 11 Years I paid each month, taken out of my pay Check was set up to fail and NEVER pay it off. So he told me if I set a payment plan up with Him and pay cautiously for 6 months I'll be out Of default. And he said that the worst thing i Can do is let them garnish my pay because I'll never pay it off, is that true??????????? He also said that he does not know how many Payments I made in those 11 year nor the balance Because it was paid off from the previous agency But this is the first collection agency who ever Called me about this. Are they just trying to set up a payment plan so They get paid the commission so it does'nt go To the next collection agency, because this is The second guy who contacted me from allied I sent the first guy 2 validation letters. Is it true That they can put me in for wage garnishment Can allied do it or does it have to go back to the Dept of ed?????? Thanks.

I read through a lot of these posts and i forget who but someone posted that student loans cannot be forgiven and that is incorrect information and here is why. I was in the hospital for a long time several years ago and had an outstanding student loan. It fell into default. Well when I got better i went back to school and talked with the Loan Department people there who told me i could either Rehabilitate the loan or request it be discharged. I chose to rehabilitate it by making monthly payments for 12 months on time and after 6 months of on time payments i was eligible for financial aid again. If i would have chosen to have the loan discharged i would need doctors letters and proof verifying a permanent disability which i also had but i needed student aid to continue school. The trick on this is if you have a loan permanently discharged you can NEVER EVER EVER in you life get financial aid for school again. AND if you ever go back to work and they find out then the loan is no longer discharged and you owe monthly payments etc. TRUE FACTS. You can read about the loans by going to the Department of Education webpage.

I read through a lot of these posts and i forget who but someone posted that student loans cannot be forgiven and that is incorrect information and here is why. I was in the hospital for a long time several years ago and had an outstanding student loan. It fell into default. Well when I got better i went back to school and talked with the Loan Department people there who told me i could either Rehabilitate the loan or request it be discharged. I chose to rehabilitate it by making monthly payments for 12 months on time and after 6 months of on time payments i was eligible for financial aid again. If i would have chosen to have the loan discharged i would need doctors letters and proof verifying a permanent disability which i also had but i needed student aid to continue school. The trick on this is if you have a loan permanently discharged you can NEVER EVER EVER in you life get financial aid for school again. AND if you ever go back to work and they find out then the loan is no longer discharged and you owe monthly payments etc. TRUE FACTS. You can read about the loans by going to the Department of Education webpage.

I read through a lot of these posts and i forget who but someone posted that student loans cannot be forgiven and that is incorrect information and here is why. I was in the hospital for a long time several years ago and had an outstanding student loan. It fell into default. Well when I got better i went back to school and talked with the Loan Department people there who told me i could either Rehabilitate the loan or request it be discharged. I chose to rehabilitate it by making monthly payments for 12 months on time and after 6 months of on time payments i was eligible for financial aid again. If i would have chosen to have the loan discharged i would need doctors letters and proof verifying a permanent disability which i also had but i needed student aid to continue school. The trick on this is if you have a loan permanently discharged you can NEVER EVER EVER in you life get financial aid for school again. AND if you ever go back to work and they find out then the loan is no longer discharged and you owe monthly payments etc. TRUE FACTS. You can read about the loans by going to the Department of Education webpage.

I read through a lot of these posts and i forget who but someone posted that student loans cannot be forgiven and that is incorrect information and here is why. I was in the hospital for a long time several years ago and had an outstanding student loan. It fell into default. Well when I got better i went back to school and talked with the Loan Department people there who told me i could either Rehabilitate the loan or request it be discharged. I chose to rehabilitate it by making monthly payments for 12 months on time and after 6 months of on time payments i was eligible for financial aid again. If i would have chosen to have the loan discharged i would need doctors letters and proof verifying a permanent disability which i also had but i needed student aid to continue school. The trick on this is if you have a loan permanently discharged you can NEVER EVER EVER in you life get financial aid for school again. AND if you ever go back to work and they find out then the loan is no longer discharged and you owe monthly payments etc. TRUE FACTS. You can read about the loans by going to the Department of Education webpage.

Did the garnishment stop when the Child Support started?

Mark, Just send the DEBT VALIDATION request where you clearly dispute their claim as it is paid off. Demand to see the original signed contract as well as a full account history and itemization of charges. Then state you have a release from the Dept of ED. Also state that all communications must be in writing and phone calls must cease. Send this by certified mail, return reciept requested. put the certified# on the letter itself and keep a copy for your records. This is very important as it proves what you sent. Even though they are allegedly collecting for the Dept of Ed, THEY are still third party collectors and must fully comply with the FDCPA. Until they send the validation, they nust cease collections. STAY off the phone with them! However, you CAN and SHOULD call the Dept. of Ed and request a statement that it was paid in full. Good luck.

Thanks Steve and William for the Info, Allied called me again yesterday again, but did not leave a message What about the letter of RELEASE that I have from dept of ed in 2003?? Why is allied not accepting that?? I've paid $110.00 in the 90's to 2001, Garnishment stopped with no changes from me every thing was the Same, Two years later the came back and said I owed another $10,000 Or so!!! I was floored, so I got my payment history and I paid up to the Penny of my amount owed. I just found this payment paper work and My question is should I send it to allied so they can ignore it??? Also about the hardship situation since 2001 along with my child Support I now pay there medical insurance, remarried a 20 month old And a home owner, I have NO extra money can't I fill out a disposable income form to show that in the event they don't want to believe my paper work, thanks

I have been in collections for about 3 years working different types of collection accounts. By far, student loans have the most priveledges in what could happen. Everybody that has replied to this is pretty accurate in what can happen, but one thing people forget is that all collectors are not bad guys. I would rather set up a person on payments than garnish the person's wages. I am going to get paid more on that. Also the point of Dept of Ed sending these out are to help get people out of default status. I know that my company pays more on the money that we set up than a wage garnishment. Mark- you need to ask for a validation of debt from either allied or Dept of Ed. Once you receive this, send in a letter of dispute but make sure you follow up on this. People all too often dispute an account then do not do anything about it.

I have been in collections for about 3 years working different types of collection accounts. By far, student loans have the most priveledges in what could happen. Everybody that has replied to this is pretty accurate in what can happen, but one thing people forget is that all collectors are not bad guys. I would rather set up a person on payments than garnish the person's wages. I am going to get paid more on that. Also the point of Dept of Ed sending these out are to help get people out of default status. I know that my company pays more on the money that we set up than a wage garnishment. Mark- you need to ask for a validation of debt from either allied or Dept of Ed. Once you receive this, send in a letter of dispute but make sure you follow up on this. People all too often dispute an account then do not do anything about it.

I have been in collections for about 3 years working different types of collection accounts. By far, student loans have the most priveledges in what could happen. Everybody that has replied to this is pretty accurate in what can happen, but one thing people forget is that all collectors are not bad guys. I would rather set up a person on payments than garnish the person's wages. I am going to get paid more on that. Also the point of Dept of Ed sending these out are to help get people out of default status. I know that my company pays more on the money that we set up than a wage garnishment. Mark- you need to ask for a validation of debt from either allied or Dept of Ed. Once you receive this, send in a letter of dispute but make sure you follow up on this. People all too often dispute an account then do not do anything about it.

I have been in collections for about 3 years working different types of collection accounts. By far, student loans have the most priveledges in what could happen. Everybody that has replied to this is pretty accurate in what can happen, but one thing people forget is that all collectors are not bad guys. I would rather set up a person on payments than garnish the person's wages. I am going to get paid more on that. Also the point of Dept of Ed sending these out are to help get people out of default status. I know that my company pays more on the money that we set up than a wage garnishment. Mark- you need to ask for a validation of debt from either allied or Dept of Ed. Once you receive this, send in a letter of dispute but make sure you follow up on this. People all too often dispute an account then do not do anything about it.

William, I never said anything about "hardship discharge" as you stated. The first thing I said, was to be sure that that third party collector had the right to collect the debt, as per your rights under the FDCPA. Until they prove they are representing the Dept of ED, they Aren't! Second was the statement regarding garnishments. If your bank account or wages are garnished, you can file for a hardship hearing. If you cannot meet your basic needs, they cannot garnish anything. A judge can stop that garnishment in one minute. My statement was to verify this was not one of the few school loans that were actually deemed uncollectable and SOLD. At this point it is a third party debt and the dept of ed is no longer involved. I am fully aware there is no SOL on Dept of Ed obligations. So, before you correct someone, you should fully understand what was said first. Thanks.

William, I never said anything about "hardship discharge" as you stated. The first thing I said, was to be sure that that third party collector had the right to collect the debt, as per your rights under the FDCPA. Until they prove they are representing the Dept of ED, they Aren't! Second was the statement regarding garnishments. If your bank account or wages are garnished, you can file for a hardship hearing. If you cannot meet your basic needs, they cannot garnish anything. A judge can stop that garnishment in one minute. My statement was to verify this was not one of the few school loans that were actually deemed uncollectable and SOLD. At this point it is a third party debt and the dept of ed is no longer involved. I am fully aware there is no SOL on Dept of Ed obligations. So, before you correct someone, you should fully understand what was said first. Thanks.

William, I never said anything about "hardship discharge" as you stated. The first thing I said, was to be sure that that third party collector had the right to collect the debt, as per your rights under the FDCPA. Until they prove they are representing the Dept of ED, they Aren't! Second was the statement regarding garnishments. If your bank account or wages are garnished, you can file for a hardship hearing. If you cannot meet your basic needs, they cannot garnish anything. A judge can stop that garnishment in one minute. My statement was to verify this was not one of the few school loans that were actually deemed uncollectable and SOLD. At this point it is a third party debt and the dept of ed is no longer involved. I am fully aware there is no SOL on Dept of Ed obligations. So, before you correct someone, you should fully understand what was said first. Thanks.

William, I never said anything about "hardship discharge" as you stated. The first thing I said, was to be sure that that third party collector had the right to collect the debt, as per your rights under the FDCPA. Until they prove they are representing the Dept of ED, they Aren't! Second was the statement regarding garnishments. If your bank account or wages are garnished, you can file for a hardship hearing. If you cannot meet your basic needs, they cannot garnish anything. A judge can stop that garnishment in one minute. My statement was to verify this was not one of the few school loans that were actually deemed uncollectable and SOLD. At this point it is a third party debt and the dept of ed is no longer involved. I am fully aware there is no SOL on Dept of Ed obligations. So, before you correct someone, you should fully understand what was said first. Thanks.

Mark/Shelley, I have read through this entire report and to be frank I cannot believe some of the blind assumptions that have been thrown out because to the author they sound plausable. First the information I would need to give you a much more detailed description of your situation. Are you employed? Does Allied have record of your employment? How long were you in school? Did you go to multiple schools? Has anybody mentioned Rehabilitation to you? How about Consolidation (William D. Ford w/ Federal Direct Loans to be exact)? Why I ask these questions.......Well if you are unemployed or if Allied does not know where you are employed then obviously they cannot initiate a garnishment at this point. Make no mistake though, as soon as this information is obtained they will set up the AWG (administrative wage garnishment). Throughout the year AI (Allied Interstate) receives demographic updates from the Dept of Ed. On these updates it gives them Address, Home Phone, new references, and oh by the way employment info. If you apply for anything and report your employment it will usually go to your credit bureau through an inquiry which inturn will give the Dept of Ed the info it needs. Federal student aid is issued to the School in disbursments, in most cases all of these disbursements are issued to the same Guarantee Agency at the time of default and are linked together. It is not uncommon though to have more than 1 Guarantee Agency involved (ECMC, PHEAA, Sallie Mae, GLHEC, ect....) or to have disbursments default at different times and therefor not be linked immediatly. As a general rule the student is given 6 months from graduation to commence payments on financial aid or put it into deferment / forbearance. Things that can affect this though are transfer from one school to another or if you took more than the summer off at anytime during your schooling. If you transfer schools and do not fill out the proper paperwork through financial aid your disbursments issued to the original school will become due in 6 months and obviously your address in most cases will have changed so notification is tough to receive. This in effect would give you 2 seperate default dates and probably 2 seperate guarantee agencies. Same result if you take more than the summer off or basically more than a quarter of the year. This of course is only troubleshooting for possible explanations to your situation as I do not have all of the facts from you. Rehabilitation and Consolidation are alternatives to AWG/tax offset/high monthly payments. Steve you seem to be fairly knowledgable, but you are not very flexible on your viewpoints. I know you believe strongly in what you are saying and I respect that, but in this case you are wrong. I am a former employee of AI, I am glad to be out of there, they do receive many complaints for collection practices but in some defense of this situation if you review the report from the Minnesota AGO the complaints that hold their weight have nothing to do with the Federal contracts that AI services. When discussing the Dept of Ed it is a bad idea to take your frustration out on the collection agency because it will do nothing for Mark and Shelley. Mark/Shelley your loans have gone through what is called Subrogation. When they originally defaulted they were assigned to a guarantee agency, in this case it sounds like PHEAA. The GA then collects on the debt. This amount of time can be for 1 year or for 50 years there is no specific time period. At any time the debt can go through Subrogation. During this entire time the account will be accruing interest per the original promissory note. Also, when the loan originally defaulted to PHEAA the principal and interest was capitalized together on all disbursments and this amount became your new principle. Then on top of that a default penalty is assessed (12-20%) on the new principle amount and this becomes your balance w/ PHEAA. Now you are accruing interest on that amount. Allied does not service sold Student Loans, they are part of the competetive government contract that has 10 agencies on it. By the way once you went through Subrogation the Dept of Ed recapitalized your principle and interest and then added an additional default penalty of 25% and upped your interest rate to 12% yearly. After 23 years you are going to pay a substantial amount above and beyond the original loan disbursments, and it is all perfectlty legal per the promissory note. First off, statute of limitations does not apply to this. I saw Steve mention hardship discharge, the only way is to be physically unable to work another day in your life due to disability incurred after receipt of financial aid. Bankruptcy..........see Federal Bankruptcy law changes in October of 1998 (I think that is correct year, may be 1997). Federal financial aid is non-dischargable through banko and that is self executing, meaning the creditor does not have to show up at the meeting of the creditors to oppose. You can file Chapter 13 banko and it will cease collection activities until dismissed or discharged but you will be responsible for all principle, penalties, and fees associated with the debt and no settlements will be accepted through Chapter 13. Make no mistake you need to address this because it will not go away. The first thing you need to do is check to see if maybe you had more than one disbursement out there when you paid PHEAA in the 1990's. These numbers may help you begin; 1 800 433 3243 (US Department of Education loan locator number) and 1 800 829 1040 (IRS tax offset line). One last thing.......... Taxes, I can't remember who was talking about having taxes threatened after they paid but I may know why. If you pay after July 31 your taxes may still be in jeapordy. The Dept of Ed reviews past due accounts in Aug and Sept and then submits SSN's to the IRS in Oct. Once paid nothing goes quick w/i the Government so usually you will file the IRS will send your taxes to the Dept of Ed and the Dept of Ed will see you paid and send the money back to the IRS to issue you a check. Also, tax offset and AWG are very bad for your credit history. They do not get reported as paid collection and removed in 2 years, they get reported as paid by involuntary wage garnishment or involuntary tax offset and stick around for 7 to 10 years. All this is FYI..........I hope it helps. William Blaine, MN

Also this might help, it's from www.ftc.gov. Dealing with Debt Collectors The Fair Debt Collection Practices Act is the federal law that dictates how and when a debt collector may contact you. A debt collector may not call you before 8 a.m., after 9 p.m., or while you're at work if the collector knows that your employer doesn't approve of the calls. Collectors may not harass you, lie, or use unfair practices when they try to collect a debt. And they must honor a written request from you to stop further contact. http://www.ftc.gov/ bcp/edu/pubs/consumer/credit/cre03.htm#tips

I went back through my files and found old bills from Allied. On the actual payment coupon, it states "Make Checks Payable to US Department of Education" and lists the Dept of Ed address to send payment. However, Allied was calling us and sending us bills. Hubby's student loan was from 1989, 17 years old and Dept of Ed was still pursuing us through Allied. I read somewhere that Student Loans have no SOL. Mark, if you have the paperwork about satisfying your loan in the 90's, I would still urge you to call US Dept of Ed. Explain to them that Allied will not accept your proof. Since Dept of Ed still had my loan paperwork from 1984, paid off in the late 90's, they probably still have yours too.

In my hubby's case as I previously posted, it seems Allied was only collecting for the Dept of Ed. Two weeks after my hubby hung up on Allied, the garnishment papers were received from Dept of Ed. Allied was no longer in the picture and never bothered him again. All payments, correspondence and phone calls went through Dept of Ed, not Allied, so this is why I think Allied merely collects for Dept of Ed. Also, I got recently got a letter from the Dept of Ed on MY old student loan (from 1984). It seems there is a class action suit going on right now that the Dept of Education overcharged for default fees and costs, above what the original contract states. I requested the Dept of Education send me a copy of my original contract so I can check on this and they did! They still had copies of my original contract from 1984, even though it was paid off years ago. I was impressed.

Amy, That was the whole purpose of my post! There was no proof they were collecting FOR the Dept of Ed! That was the point! If they bought the debt, as they probably did, they are NOT collecting for the Dept of Ed, they are collecting for themselves. Why is this so hard for you to understand? They are a third party collector and like all third party collections you ALWAYS demand validation. And, you STILL have not itemized and PROVEN exactly what advice of mine was bad, and why. Still waiting. Ps. A 24 year old debt even if it was still owned by the dept of ed could most likely not be collected! This is because you could STILL demand validation which is very unlikely to still be available. NEVER pay ANYONE without FULL validation. How is this advice bad? I'm sure you'll find something wrong with it.

Steve, I said that they USUALLY don't sell student loans to 3rd party collectors! Once again YOU didn't pay attention to what I said; it's not my lack of education or misinformation, or anything having to do with me at all. Obviously you have a problem with people who contradict your advice especially when it's wrong. I'm not trying to SLAM you I am just trying to CORRECT your bad advice and you asked for specifics before so I gave it to you. You can't even acknowledge that you may have given some bad advice even when it's laid out for you so clearly and not just from me. Playing your usual hardball games with a collection agency that is collecting for the Dept. of Ed. (which is PROBABLY the case here) is never a good idea. However, I have noticed that your new postings reflect that you are not an attorney now. That's good. Now people have the pertinent information when deciding whether to take your advice or not. Mark, How's it going? Have you been able to contact the Dept of Ed. to try to work anything out? I think that's your best course of action is to contact them directly and prove your case to them and not Allied. Good luck!

Amy, Some very old school loans that are deemed as totally uncollectable are SOLD. At this time, all rules of a third party collection apply, as the FEDERAL govt is NO LONGER involved. Yes, they DO sell some of these loans. And, when a collection agency is contracted to do collections, ALL disputes regarding that collection attempt MUST go through the collection agency. This is how it works. If the alleged debtor disputes the debt and they cannot produce a signed contract, they get NOTHING. Yes, school loan debt CAN be challenged, and MUST be validated. So, once again Amy attempts to slam me, and proves how ignorant she really is. READ what was actually written. It was NOT the Dept of Ed doing the collections. It was a third party collector. BIG difference.

After hubby hung up on Allied, his employer received garnishment papers 2 weeks later from Dept of Ed. This was last December. First garnishment began in January, 2006. No, they did not let us pick the payment. They garnished 15% of disposable income (it used to be 10%, but went up to 15% for student loans). When employer received garnishment paperwork, we received paperwork to apply for hardship, that 15% of disposable was too much. We did not fill out the paperwork for the hardship and just let them garnish 15%. I'm just guessing, but I think it's a lot of work for them to garnish which is probably why they hire collection agencies to try and collect first. By the way, hubby told Allied the Dept of Ed would get their money by tax time because he deliberately claimed 0 allowances so the max would be withheld and we could get the student loans paid. Allied would not wait until March or April for the refund. Maybe Allied wouldn't have gotten paid if the taxes paid it off, which may be why they initiated garnishment after we told them it would be paid off in a few months. Anyway, the garnishment only lasted 2 months, then the Dept of Ed got the tax refund and it was paid. All that work the Dept of Ed and hubby's employer did for nothing. Hope this helps.

Mark, Deal directly with the Dept of Ed after all if there's going to be any garnishment they will be the one's to do it, not Allied. Call the, then send them all of your proof RRR and keep the receipts. Nikki is totally right about the fact that the debt was probably not sold to Allied (because the Dept. of Ed. usually doesn't do that) but they are just collecting for them. So, if you don't owe them money it will be much easier to prove that to the Dept. of Ed. rather than Allied (who won't listen anyway). I really wish you luck with this because I know how hard it is especially if you've been threatened with garnishment on a student loan that's already been paid. But, I stopped it before any garnishiment happened by proving my case to the Dept. of Ed, not the collection agency. Steve, You don't know everything about everything all of the time and this is a perfect example of you giving advice about something that you know nothing about (you wanted specific examples so here it is). However, if you had ever gone to college you would know about things like student loans because anyone who has ever taken one knows that this kind of debt NEVER goes away no matter what!

Mark, Deal directly with the Dept of Ed after all if there's going to be any garnishment they will be the one's to do it, not Allied. Call the, then send them all of your proof RRR and keep the receipts. Nikki is totally right about the fact that the debt was probably not sold to Allied (because the Dept. of Ed. usually doesn't do that) but they are just collecting for them. So, if you don't owe them money it will be much easier to prove that to the Dept. of Ed. rather than Allied (who won't listen anyway). I really wish you luck with this because I know how hard it is especially if you've been threatened with garnishment on a student loan that's already been paid. But, I stopped it before any garnishiment happened by proving my case to the Dept. of Ed, not the collection agency. Steve, You don't know everything about everything all of the time and this is a perfect example of you giving advice about something that you know nothing about (you wanted specific examples so here it is). However, if you had ever gone to college you would know about things like student loans because anyone who has ever taken one knows that this kind of debt NEVER goes away no matter what!

Nikki, You wrote: "Steve, usually I think you're right, however student loans are a whole other matter, with different rules. They do not require a judgment to garnish. I'm afraid if Mark tries to play hardball with Allied, they will turn it in for wage garnishment. And if Dept of Ed has no record of him paying the loan, they may garnish. That's why I think he should nip it in the bud with someone who will listen (like Dept of Ed) rather than with Allied". >> The Dept of Ed loans are both assined and sold, depending on whether they feel they are deemed collectable or not.. If the Dept of Ed wants to collect on the debt, fine. However, Allied Interstate are third party debt collectors and should never be dealt with. I agree that student loans should be paid. However, I feel that the Dept of Ed should do their own collecting. They have all of the means to do so like wage garnishment, bank accout seizure, and tax offset. These are all things that a third party collector would have to sue to get.

Hi Nikki Thanks for your post, I never had it on my credit report And they never took any of my tax refund checks and I file every year. Nikki how long did it take for the dept Of ed garnishment to get to your husband's employer After he hung up on allied and what year was it? And Did they let you pick your payment? Do you know Why the dept of ed does not collect them selves? I have Child support & there medical insurance now, and I know they can only take 10% of my disposable income, I've paid this loan in the 90's I hate getting caught up in all this, I need to find my paper work, thanks again people. Mark

Mark: This is from personal experience and I hope it helps. My husband had a student loan from 1989, which actually fell off his report years ago. However, the Dept of Ed was taking our tax refunds for years (they may know you don't owe money if they haven't been taking your refunds). Allied got the debt and started calling. Well, we decided to try and work out a payment plan and offered $200 per month. Allied said they would not accept anything less than $1800 per month (ha!ha!) (we owed $5000) or they would garnish the hubby's wages. My husband got so mad at their counter-offer he told them to go ahead and garnish and hung up on them. I'm actually glad they never accepted the payment plan because it may have restarted the 7 year clock. 2 weeks later, my husband's employer got wage garnishment papers from the US Dept of Education, with their phone number and address. No longer Allied and Allied never bothered us again. This is why I think Allied merely collects for them and doesn't buy the loans. Anyway, even though he was in garnishment, everytime I called the Dept of Education, they were very helpful and never treated me poorly. Once they got our final payment, I called, and within 2 days they faxed hubby's employer a stop garnishment letter. I then called again and within 1 week I received a letter in the mail that the debt was satisfied. This is why I think you may want to call the Dept of Ed directly since they were so helpful for me. Steve, usually I think you're right, however student loans are a whole other matter, with different rules. They do not require a judgment to garnish. I'm afraid if Mark tries to play hardball with Allied, they will turn it in for wage garnishment. And if Dept of Ed has no record of him paying the loan, they may garnish. That's why I think he should nip it in the bud with someone who will listen (like Dept of Ed) rather than with Allied. Then again, if it's been so many years, and it's already off the credit report, you may just want to let it go since you paid it off. It's up to you. Happy Holidays everyone!

Paul, If is is actually a school loan outstanding and it is actually still owned by the Dept of Ed, they do not have to sue. They can garnish immediately both paychecks and bank accounts. The issue here is to determine whether or not the Dept of Ed is in any way still involved, and calling the Dept of ED IS NOT the way to go as Amy suggests. The Dept of Ed is not the party doing the collections, Allied Interstate is. Therefore, all validation requests MUST go through Allied Interstate. If it was the Dept of Ed doing their own collections, they would have already done garnishments and/or tax refund offsets. They operate with the same impunity as the IRS. All that needs to be done, is a DEBT VALIDATION request be sent to ALLIED INTERSTATE by certified mail, return reciept requested. Be sure to put the certified# on the letter itself, and keep a copy for your records. Demand to see the original contract, and a full account history and itemization of charges. This would all be needed in court for them to win.

Mark/Shelly, They are third party collectors. They are bound by the FDCPA. Send the CEASE COMMUNICATIONS request by certified mail, return reciept requested. Put the certified # on the letter itself, and keep a copy for your records. The fact is, if they could have done something they would have no need or desire to talk to you. They would have just done it already. This leads me to believe that they are junk debt buyers who have little or no documentation on the debt. Ask your employer to refuse any calls and tell them you no longer work there. Be sure to close any bank accounts that they may have gotten information about and get one at another bank just to be safe. They play all kinds of underhanded and usually unethical and even illegal tricks to separate you from your money. I have dealt with Allied Interstate. They are genuine lowlife. Protect yourself.

Mark, Nikki was totally right in her posting. Take her advice and hopefully you can prove your case to the Dept. of Ed (they're easier to deal with than the collection agency). I really feel for your situation and I hope that it works out for you. I know how hard it is to prove that you don't owe money to the Federal Gov. At the very least, they might be able to help you figure out where to go from here. Hopefully you have all the records you need to prove your case because ultimately, you have to prove to them that you DON'T owe them money; not the other way around (it is the Federal Government after all). I would start with trying to deal directly with the Dept. of Ed. All you should need when you call is your SS# to get started (even if your account is old they should be able to find it that way). My situation was easier because the bank president helped me prove that I had already paid off my student loan because they drafted the check and sent it RRR so they had the receipt from that in my loan file. If it had been me I probably wouldn't have had all of that at home so I got lucky that way. Even with all of that, it still took them another 4 months to totally clear everything up. After all, the federal government is not known for its speediness especially when it's about money. GOOD LUCK!

Can allied call my employer? They sure can. Night and day, until your employer learns to hang up every time they call. And what can they say to them? Your employee owes us money. Don't you pay him? If you do, they why can't he pay us? Is that the kind of people you hire? Is that the kind of business you're running? Maybe we should report your company to the police department. Collection agencies are robbers who use words and threats, not guns. Anything they have to say, they will. The police are on the way. You're going to jail. We'll get the money from your grandmother. We'll take your car away. You name it, and they'll say it. Can they really do anything? Of course not! You have to sue somebody in a court of law. A real court, with a judge and a flag, and lots of people. You can't do it through the mail. You'll know if you ever get sued. The notice will come, and you'll have to sign for it. It'll have the name of the court and the date of your hearing. There is no mistaking a real notice from a real court. Google: Wage garnishment Overdue debt Collection agency procedures Illegal debt Debt statute of limitations Junk debt buyer Collection agency harassment There you go, hours of reading, there. All the answers to the questions that you haven't even came up with yet. If you click on all the links that you'll come across, you'll find more than you ever wanted to know about debts and overdue bills.

Thanks guys for all the advice, I do see your point Steve, if they could do any thing WHY WOULD THEY CALL ME??? because it was with the dept of ed years ago I told them that I paid it off and I have a RELEASE letter not a pay Off letter. Also I never had a income tax check taken, or the dept Of ed say they would garnish my wages again after the release Letter, so I don't know where allied is coming from. I guess I need To know if they dept of ed can garnish me like Amy said or if allied Can do it on there behalf, Amy how can I find out for sure??? Is there A way?? I sent a validation letter already in November, but there still Calling the latest call is that a supervisor left me a voice mail and said That I need to call him back before 3 today (I've have'nt picked up the Phone in 3 weeks after reading these threads) should I be worried??? And why is'nt allied accepting my RELEASE letter from the dept of Ed??? Can allied call my employer?? And what can they say to them? Because they already had called to see if I worked there, Sorry guys for all the questions, I just don't want to look at my Check on pay day a see a chunk out of it, can allied really do any thing, thanks to all Mark

Thanks guys for all the advice, I do see your point Steve, if they could do any thing WHY WOULD THEY CALL ME??? because it was with the dept of ed years ago I told them that I paid it off and I have a RELEASE letter not a pay Off letter. Also I never had a income tax check taken, or the dept Of ed say they would garnish my wages again after the release Letter, so I don't know where allied is coming from. I guess I need To know if they dept of ed can garnish me like Amy said or if allied Can do it on there behalf, Amy how can I find out for sure??? Is there A way?? I sent a validation letter already in November, but there still Calling the latest call is that a supervisor left me a voice mail and said That I need to call him back before 3 today (I've have'nt picked up the Phone in 3 weeks after reading these threads) should I be worried??? And why is'nt allied accepting my RELEASE letter from the dept of Ed??? Can allied call my employer?? And what can they say to them? Because they already had called to see if I worked there, Sorry guys for all the questions, I just don't want to look at my Check on pay day a see a chunk out of it, can allied really do any thing, thanks to all Mark

Thanks guys for all the advice, I do see your point Steve, if they could do any thing WHY WOULD THEY CALL ME??? because it was with the dept of ed years ago I told them that I paid it off and I have a RELEASE letter not a pay Off letter. Also I never had a income tax check taken, or the dept Of ed say they would garnish my wages again after the release Letter, so I don't know where allied is coming from. I guess I need To know if they dept of ed can garnish me like Amy said or if allied Can do it on there behalf, Amy how can I find out for sure??? Is there A way?? I sent a validation letter already in November, but there still Calling the latest call is that a supervisor left me a voice mail and said That I need to call him back before 3 today (I've have'nt picked up the Phone in 3 weeks after reading these threads) should I be worried??? And why is'nt allied accepting my RELEASE letter from the dept of Ed??? Can allied call my employer?? And what can they say to them? Because they already had called to see if I worked there, Sorry guys for all the questions, I just don't want to look at my Check on pay day a see a chunk out of it, can allied really do any thing, thanks to all Mark

Thanks guys for all the advice, I do see your point Steve, if they could do any thing WHY WOULD THEY CALL ME??? because it was with the dept of ed years ago I told them that I paid it off and I have a RELEASE letter not a pay Off letter. Also I never had a income tax check taken, or the dept Of ed say they would garnish my wages again after the release Letter, so I don't know where allied is coming from. I guess I need To know if they dept of ed can garnish me like Amy said or if allied Can do it on there behalf, Amy how can I find out for sure??? Is there A way?? I sent a validation letter already in November, but there still Calling the latest call is that a supervisor left me a voice mail and said That I need to call him back before 3 today (I've have'nt picked up the Phone in 3 weeks after reading these threads) should I be worried??? And why is'nt allied accepting my RELEASE letter from the dept of Ed??? Can allied call my employer?? And what can they say to them? Because they already had called to see if I worked there, Sorry guys for all the questions, I just don't want to look at my Check on pay day a see a chunk out of it, can allied really do any thing, thanks to all Mark

Amy, Since you seem to have a problem with every post I make, I need to call you on something. Do you know the difference between a debt that is SOLD and a debt that was assigned for collections? FYI..The Dept of Ed DOES sell off very old school loans that are deemed uncollectable. The junk debt buyers who purchase these are bound by the FDCPA as they ARE third party collectors. Even with school loan debt being collected directly by the Dept of Ed or their hired collectors CAN be challenged just like a regular debt. They are required to validate if requested. After all, government agencies DO make mistakes, and people do apply for and recieve school loans fraudulently. What about victims of these situations? According to you, they have no rights, and just need to pay. Another thing. Just because there are no SOL on dept of Ed obligations, does not mean they will always collect. There are still hardship limits on what can be garnished. And there are limits on what they can take to begin with. There is nothing to stop someone from just quitting a job and becoming invisible to get out of a garnishment. Unethical? Sure. Illegal? No. People all have different situations, therefore each case is different. Even the Dept of Ed must prove the debt. They are NOT above the law. The OP here clearly said the debt was 24 years old, and did not have adequate documentation to support the claim.

Call the US Dept of Education directly to see if you owe any money, 800-621-3115. Hopefully they will tell you it's been paid. Then request written verification that you have paid in full. You get that pretty quickly. If they say you owe, I think you may be able to deal with them directly with your proof that you paid the loan. You can also call the IRS to see if the Dept. of Education has any claims on your refund. I don't think they sell the loans to Allied, I think Allied merely collects for them. Hope this helps.

Mark, Student loans are federally guaranteed so they are given special privileges and are very different than other debts. I had a student load that went into default and to top it all off it was the wrong amount of money (this was 10+ years ago). Anyway, I took out a loan to pay off the defaulted student loan after we got the amount straitened out and 6 months after it was paid off the loan was sent to the Dept. of Education collections and for garnishment. It was close to tax time so I was really worried that they would take my taxes (which they can WITHOUT a judgment-that's one of the special privileges). So I went to the bank that drafted the payoff check and sent a copy to the Dept. of Education and got Great Lakes to draft a letter saying it was all a big mistake and it still took them another 4 months to get the situation straitened out. So, I feel for your situation because if they are collecting on a Federally Guaranteed student loan, they MAY have the same privileges which means that if they do (I'm not sure) they can garnish your wages and levy your taxes for the debt without a judgment. And, I'm not even sure if the FDCPA applies because they are collecting for the federal government. I think that if you go and speak with a Financial Aid counselor your school or at any local university and let them know about your hardships and other circumstances they should be able to help you in dealing with this debt and what to do next. Like I said, student loans are different, i.e. they cannot be discharged in bankruptcy, you CANNOT get out of them even though Steve makes it sound like you can (no Statute of Limitations apply), and they can garnish your wages and levy your taxes all without obtaining a judgment. In fact, they don't even have to notify you before they do any of that stuff. However, I don't know how any of that stuff applies to the outside collection agencies that collect on federal student loans but it's my guess that it does apply to them too; that's why they are so bold in their bad behavior (even though this particular collection agency always is no matter what debt they're collection on). You could also call the Department of Education (they are the one's who farm this stuff out to collection agencies) or the financial agency that held the original loan (mine was Wells Fargo) and fax them the proof that the debt was paid; the Dept. of Education can pull it back from the collection agency. And, sometimes if all they do is take your tax return (if you get one) for payment, it's not so bad because then it's paid; unless as with me and apparently you it's already been paid. Once they take your taxes it's almost impossible to get the money back from them. I really feel bad for you because I know how frustrating it is dealing with anyone representing the Federal government especially when you owe them money. I also know how hard it is to prove that you already paid the debt and how slow they are in acknowledging payment. No matter what Steve says, in this situation it is your burden to prove that you have paid; not theirs to prove that it's valid (another privledge of federal student loans). So, GOOD LUCK!

Mark, Step back a minute and put this in perspective. If they had the grounds to sue you and get a garnishment, they would just do it. They would have no need to speak with you. BTW..You know that you should NEVER speak to any debt collector on the phone, right? This means NEVER. And, you should NEVER provide them with ANY information. The burden of proof is always on them, not on you. You need to send them a DEBT VALIDATION request right away. Clearly dispute the debt as a PAID ACCOUNT. Demand a full account history and itemization of charges, as well as proof that they own the debt and/or they have the legal right to collect it, and are licensed in your state to do debt collections. Send this by certified mail, return reciept requested. Be sure to put the certified# on the letter itself and keep a copy for your records. This is very important to do it this way. Keep in mind that if the Dept of Ed sold that account, SOL apply. If they assigned the account, there is no SOL. This is all irrelevant if they cannot provide ALL of the requested documentation, as without it they could not successfully sue you. They cannot get a garnishment without suing you and winning if it is a purchased debt.