Federal Education Debt- charged off as bad debt without due process


I previously introduced my debt story here: The One That Got Away (except from all her debt)

I’m a former medical student who was on scholarship with the US Army. When the Army terminated my scholarship due to academic difficulties, I went through the appeals process and was informed I would have to pay my debt back. I never received documentation of my obligation until the US treasury sent a collections notice. After it was determined the collection decision was in error because all the correspondence was returned as undeliverable (wrong address). Unfortunately, I’ve been unable to get any assistance in this matter since then. Once the debt was returned from the treasury, DFAS told me I was ineligible for a payment plan because the debt was now too old. Current debt status: $86K “charged off as bad debt”.

TL;DR: Obligated to repay Army medical school scholarship; debt was put into collections and charged off without due process.

Any one have suggestions? At this point my patience is past the “I would like to set up a payment plan” stage.

Hi @sarahjudd, thank you for sharing your powerful story! You are not alone.

In terms of this particular charged-off obligation, I’d love to set up a time to talk by phone to learn more about what this is. It doesn’t look like a loan. It looks more like an unpaid bill. When it says “Government Overpayment” I guess that must mean that you were receiving some kind of benefit that they later revoked, expecting you to pay them back? But there was never any actual loan for this.

If they charged off this debt, did they sell it to someone else? If so who?

I’ll send you a DM. There is some investigating we need to do to figure out what the options are.

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