AmI responsible for investigating why a college loan creditor who has been paid by me is not sending payments to the University?

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AmI responsible for investigating why a college loan creditor who has been paid by me is not sending payments to the University?

i have been paying a student loan via automatic debit deductions from myI  account for 2 years. Today I was notified by the college that the lending agency has not made payments to the college, so I owe the entire amount of the loan, payable within 10 days or the loan will go to collections. I forwarded paperwork to confirm I’ve made these payments, and have been since 12/08. The school replied that this doesn’t matter. “This defaulted subject loan has been brought to your attention,” their letter says, and “you need to investigate why they are not sending payment.” Is this so?

Asked on November 24, 2010 under Bankruptcy Law, Hawaii

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

The issue will turn on what exactly the paperwork for the loan says. If under it, *you* are resonsible for ensuring that the college is paid, then the college may in fact look to you for payment; you in turn would then look to the lending agency to find out what's been happening and seek recourse if appropriate. It's similar to the situation with medical bills and health insurance: if the health insurer doesn't pay for a procedure, even if it should have and has no valid reason to not do so, the doctor or hospital may look to the patient for payment; the patient then has the responsibility of finding out what went wrong and getting his or her money from the insurer. So if--as is likely--you are the person ultimately responsible for payment, you will need to deal with this and if you don't the college may sue you or take collections actions. You should retain an attorney to help you; the lawyer should be able, among other things to "stall" matters while you look into this.


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