A reader’s college loans have been sold and resold to collection agencies, and collection call déjà vu is getting really old.

Question: I am a single mother of six children and I am disabled. I took out a $2,000 college loan and moved abroad. Years later I received a letter sent to my overseas address from a collection agency saying that I owed them the loan money. My husband told me he would deal with it, but he never did. I never heard anything else from the collection agency until about five years ago. I got a letter from a different collection agency telling me I owed $15,000 due to penalty fees. My mother started getting collection agency calls at all hours of the day and night. She never had her name on my college loan so I am not sure how or why they connected her to me. The agency then passed my debt off to another agency, and then another.  I have not heard from any of these agencies in a couple of years now. I wouldn’t even know who holds my debt. I know college loans never go away but once it is passed to a collection agency (or many agencies) can it finally go away? Am I still obligated to pay the agency?Marti in Florida

Andrew Pentis from Student Laon Hero responds…

Not knowing how much you owe and to who is, unfortunately, a problem that many borrowers face once their student loans enter collections.

Having your loan passed from agency to agency over decades only makes the situation more frustrating. It’s especially unfair that you’ve also dealt with unhelpful collection agents.

Requesting a debt validation letter, attempting to negotiate your debt and asking for a payment plan were all smart steps on your part, Marti. And although it’s welcome news that the collection agencies have stopped calling, you should answer these questions to put your concerns to rest.

Crushed by student loan debt and worried you’ll never pay it off? There is help available.

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Question 1: Did you borrow a federal or private student loan?

If there was one essential fact missing from your detailed accounting, Marti, it was the original lender of your $2,000 education debt. If you borrowed from the federal government, your loan has no statute of limitations – that is, it’ll exist as long as you do. Potential long-term consequences of ignoring it include wage garnishment, should you ever return to the U.S.

Private student loans, on the other hand, could become time-barred debt – meaning that lenders (and their collection agents) can attempt to recover the debt, but they can’t sue for the balance. The length of limitations could span three to 10 years, depending on the state where you live.

With that said, the statute could be reset if you make any payment on the debt, whether a partial payment or in full, according to the Federal Trade Commission.

Question 2: How is your credit faring?

An unpaid student loan should fall off your credit report seven years after entering default. Given that you borrowed in the 1980s, your credit score has, hopefully, long since recovered. (If your debt was somehow reset in recent years, reviewing your credit report via AnnualCreditReport.com would reveal the name of your current loan holder.)

You also mentioned being overseas. If you plan to live there permanently, your stateside credit might not matter so much. Just prepare for your fate should you decide to return permanently to the U.S. down the road.

Question 3: Does your lawyer specialize in student loans?

If your problem persists – perhaps a new collections agent phones you in the future – you might again seek professional help.

Although it appears your uncle’s lawyer hasn’t led you astray, keep in mind that you could consult professionals who specialize in education debt. Find free or close-to-free services at nonprofit organizations and elsewhere, as long as they’re accredited by a national trade association, such as the National Foundation for Credit Counseling or the Financial Counseling Association of America.

Whether you need guidance or not, review the protections you’re afforded under the Fair Debt Collection Practices Act. Collections agents can’t harass or threaten you about repayment, for example.

So, are you obligated to repay the debt after all this time?

It seems you’ve made every effort in recent years to pay off your original $2,000 balance, only to be turned away by collection agents.

Now, let’s address your final question – about whether that $2,000 loan-turned-$15,000 debt ever goes away. You could be off the hook if you have a private loan and your state’s statute of limitations has taken effect, or if you plan to live outside the U.S. permanently.

The debt could hang over your head, however, if it originated with the federal government. Even a private loan borrowed from a bank, credit union or other lender, could linger if your state’s statute of limitations were reset, affecting your credit.

Fortunately, you can find low- or no-cost counseling to confirm what’s best for you. Then you’ll know what steps to take next, whether that’s to rehabilitate the debt, work toward a measure like student loan refinancing or simply leave your loan where it is.

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About the Author

Andrew Pentis

Andrew Pentis

Andrew covers personal finance expert with a focus in student loans for Student Loan Hero. His work has appeared in 30-plus publications. He is interested in creating actionable content.

Published by Debt.com, LLC