Student Loans for prisoners

Can you believe it?! DOE gives out Student loans for prisoners and the dead.  Since 2018 the Department of Education has not given out death and disability discharges. The Department of Education gives student loans to convicts in prison or people pretending to be these convicts. When the fraud is caught the Attorney General and the Secretary of the Department of Education pretend it doesn’t happen.

One example of prisoner student loans

A client of mine is unable to read or write effectively. He was incarcerated in Kentucky on or about 1-13-1987 for Assault to serve a ten-year sentence. He was paroled on 10-6-1992. I couldn’t believe it when he walked into the office with a threat from a federal student loan collector (FMC) to seize his wages. The Department of Education had taken his tax refund for years. This is the only course the Debtor had after high school. The client claims he never signed for any student loan. He believes that the person who taught the class was convicted of forging loans in the students’ names back in the 1990s.

The client has filed two bankruptcy cases since 1992.  He listed these loans and advised Department several times that the loans are fraudulent. Still, the Department and their agents have refused to honor the bankruptcy discharge or process discharge request forms to discharge the loan as fraudulent. The Department of Education has seized multiple tax refunds and now threatens to seize wages. I don’t believe that the course he took while he was incarcerated was a qualified school that was entitled to the non-discharge protection of 11 USC. 523(a) (8) nor was the loan made by the Debtor. At this point, the Debtor seems to have exhausted all the administrative remedies by attempting to file the Loan Discharge Application and being refused by DOE and or FMS a discharge and the refund of tax refunds seized since about 2000.

How bad is the problem with student loans?

It is just hard to believe that with over 1.5 trillion dollars of student loan debt, much of which goes unpaid, we pretend there is no problem.  And the government was over 5 trillion in debt as of 2015 and now we

  1. lend to people that can’t pay it back and then
  2. complain about it when they don’t.

We don’t check whether the student can benefit from the courses being taught. We don’t even check very well if the person applying for the loan exists.   In the old days, it was called voting the graveyard. Some student loans go out to people that don’t even exist or that are dead. The fraud complaint office for DOE is open only 2 hours a day, only four days a week, and even then, they won’t answer the phones. Excellent work if you can get it. hotline.html I know my client’s identity theft happened years ago, but how long does it take DOE to figure it out they got taken? In this case, nearly two decades.

Student loans for the dead

What is absurd is sometimes the Department of education even refuses to charge off a student loan after the death of the student. Even when you furnish a death certificate, they sometimes claim death has not been proven to their satisfaction.   They claim the death could have been faked. What the real reason for such accounting is that it keeps the charge offs down. It improves how their accounting looks.

I don’t think we will ever know how bad the student loan problem is because they won’t admit how bad it is.

Follow Us