Garnished but loan is not with US DoED. It was a State Loan program in the 80's.

Posted by Smooth-E6721@reddit | studentloandefaulters | View on Reddit | 6 comments

My brother defaulted on his student loan back in 1985 (he was in a major accident which prevented him from returning to school and working full time). A payment plan was set up with SEAA (State Education Assistance Authority Virginia Education Loan Authority in 1994. My parents have passed but my dad kept great records of all of our affairs. We're still looking through my brother's files to see if our dad paid off his loan.

Now, here is the problem. The IRS withheld money owed to him. He did not received a notice of intent to garnish and the agency he owes is the US DoED.

His loan isn't with the US DoED it was with a private entity (VELA)
What is the statue of limitation when it comes to garnishing for student loans?
How do I get records (if I don't find it in the folders) from VELA to determine if it was paid off?

I appreciate any assistance you can provide because my brother is disabled and he needs his money. We're now worried that his SSA will be garnished.

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vsandrei@reddit

A payment plan was set up with . . . Virginia Education Loan Authority in 1994

You owe a debt to the Commonwealth of Virginia, even though the state agency to which you originally owed the debt was abolished in 1998. The Commonwealth can be rather aggressive with collecting state debts.

Perhaps your debt was sent to the Federal Treasury Offset Program for collection, and administrative wage garnishment was used to attach your pay check. HHS maintains a database of employment information from each state's workforce services agency called National Database of New Hires. The database is typically used for garnishing child support but can also be used for garnishing Federal and state non-tax debts.

Did you attend school in Virginia or live in Virginia? You might want to contact SCHEV in Richmond or the school that you attended when you took out the loan.

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Personal_External_98@reddit

Thank you for your response! Yes, he went to school in VA. I will talk to him today and we'll contact SCHEV together.

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vsandrei@reddit

Also, here is a link to some useful information about the history and final disposition of VELA from Progress Virginia. The agency's student loan assets were sold in 1997 to the Student Loan Marketing Association (Sallie Mae), a GSE (like Freddie Mac, Fannie Mae, Farmer Mac, the FHLBs, and several others) which itself was privatized between 1997 and 2004.

You need to find out whether that was some sort of Federally guaranteed loan, which is probably how it ended up with the US Department of Education now.

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Personal_External_98@reddit

Thank you so much!!

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vsandrei@reddit

If SCHEV can't help you, contact the financial aid office at his former school, and escalate. That loan is so old that you will need to get to someone with actual knowledge and authority quickly.