Over our many years in the student loan industry, the Student Loan Ranger has received lots of emails from consumers about their loans. We hear from two main categories of borrowers: those with questions on how to manage their student loan debt and those who feel they have a dispute.
For the latter group, in the past, we’ve offered advice on the most effective way to handle a student loan dispute. That advice is worth reviewing if you feel there’s something wrong with the way your student loan is being handled. However, now let’s explore a more specific and fairly rare type of dispute, which is when you feel that the loan is not valid in the first place.
[Know how to resolve student loan disputes.]
Disputing a debt is a tricky subject, so as a reminder, we at the Student Loan Ranger are not attorneys and this cannot be considered legal advice. If you feel you have a legal dispute with your student loans, obtain guidance from a practicing attorney who is well-educated in student loan laws and regulations.
One of the most common loan validity disputes we see from consumers is related to identity theft or borrowers claiming that they never took out one or several student loans. If you don’t remember taking out a student loan, the first thing to do is verify whether that loan was used to pay for your tuition or other higher education expenses.
The National Student Loan Data System will show you all your federal student loans, who holds them, what school they were used for and what year they were disbursed. Private loans can be found on your credit report. From there, you can contact the school’s bursar’s office and ask for a copy of your school account, where it shows that loan being applied.
[Understand the many facets of the student loan process.]
The next action to take is to request a copy of the loan promissory note. Federal student loan promissory notes can be tricky, since most loan holders use the Master Promissory Note.
This promissory note only requires a borrower’s signature once in a 10-year period but can originate multiple loans in multiple years unless the borrower revokes his or her signature for future loans. After that first year of signing the Master Promissory Note, the borrower requests future loans via the Free Application for Federal Student Aid or FAFSA and confirms that request through the school’s award letter and confirmation process.
Don’t expect to see a promissory note for each individual federal student loan you borrowed — you likely will only receive one for your entire time in school.
If you receive the note, you can compare the signature to your own. If you feel the signature is not yours, you will likely be required to submit as many as six copies of your signature to the loan holder, of which several must be from the same period that you signed the loan document.
A good place to find examples of signatures from that time frame is your bank, which stores copies of your personal checks. Old leases and driver’s licenses can also be good resources for older signatures.
Many borrowers sign student loans electronically, in which case there won’t be a signature to compare to. In these cases, the promissory note you’ll receive will include documents that will read more like a transactional record than a traditional promissory note.
For these types of documents, you’ll want to confirm that the IP address that was used to electronically sign the note was located within a close radius to your location at the time the loan was made. These electronically signed notes use a signature that is made by authenticating who you are.
[Learn three ways a student loan could be discharged.]
Many federal student loans do this through the same Federal Student Aid PIN that you use to fill out the FAFSA. This is one reason why we advise you to never share that PIN with anyone.
Once you’ve verified the loan is, in fact, not yours, your next step is to file a police report for identity theft. In many cases, consumers discover that a family member forged their signature, in which case they will need to determine the best course of action.
Filing a police report that may result in a family member’s prosecution may not be an outcome you are comfortable with. Such a decision is personal, but it’s important to understand that without such action, depending on the circumstances, it can be very difficult for you to remove your liability for the loan.
The final step is to file an ID Theft Discharge with your loan holder. There’s currently no standard form for this, although one is in the works, so you will need to contact the loan holder to find out its particular process. And you will need to provide evidence of the identity theft.
This is only general guidance in what can be a very complicated and detailed process. If you feel you are a victim of student loan identity theft, be sure to consult an attorney to determine next steps on resolving the dispute.
More from U.S. News
Why Few Borrowers Have Pursued PSLF
Know How to Talk to Your Student Loan Servicer
When Student Loan Forbearance Is a Good Idea
How to Dispute a Student Loan originally appeared on usnews.com
