This is my first post on this board, and it just had to be the Financial Hardship board :surprise:

Recently I attended a certain college online for a year before I found out it was a HUGE scam!
It was accredited alright, just not the kind that would make the degree usable outside of AZ.
So I dropped out and decieded to just pay the loans oop and learn my lesson.
A nice 10 grand lesson!
So I started making the loan payments this month.

Well today I get a letter saying this is my final notice to pay back the SCHOOL two grand. If I didn't pay within fourteen days, it would be turned over to the collection agency.

So I call the school and ask what I could do to pay this off, he stated I would have to pay half of the balance in order to make monthly payments on the rest. Well i'm only 19, work part-time in a kitchen to make ends meet, and sure as heck don't have 1,000 bucks laying around.

So his bright idea #1 was to say I could just pay it off and return to school.
I laughed so hard, I thought I would die in my chair at work.
Then bright idea #2 was to say he could give me till monday of next week to pay the 1,000.
At this point after repeating that I was in no way able to dig up 1,000 bucks I got angry and said turn it over to the collection agency!

So I just wanted to know what to be prepared for, and how to handle a collection agency?!?!
I found information online, but it's all so confusing!

Also I need to get this Dave Ramsey book NOW!

They should have told you upfront that their degree was only usable in AZ.

I really would research that too. You may be able to get the attorney general involved if that wasn't disclosed to you upfront. I wish I had better advice, but I am unsure of what type of loan you have. I have student loans, but they are w/ the government so I only deal with a government agency

Yes, I have two different student loans with the government also (Stafford loans)
I just started payments this month, which is when they were set to start.

I owe the actual school 2 grand for the cost of tuition which wasn't covered by the govt. loans.

They have their own hate site which is where I got all my legal information in order to learn that they were a scam. They are accredited just not one of the major credits needed in order to have a real legit degree such as a bricks and mortar degree.

I will post when I find the name of that accreditation they need.

okay the accreditation is AACSB

I'm so sorry you're going through this!

Is it possible that the person you spoke to is just trying to get you to pay as much as you can right away, and he's using scare tactics to do it? They may decide to send you to a collection agency, but there's still no way they can make you come up with $1000 by Monday. How can you get blood from a stone, as my mom would say?

Does the "hate site" have any information about what other people have done? Is there a way that you can fight back, since the program was not FULLY accredited, and that wasn't explained to you at the outset?

I hope it all works out for you! Keep your chin up!

If it's the school I am thinking of--I attend it and I've had no problems. They are regionally accredited and not nationally. While they are based in AZ, their degree is accepted in Iowa, where I am from.

Once a collection agency is involved you can still make payments. They will send you letters and call your house, you can make an arrangement with them and as long as you pay them monthly they wont bother you. At some point if you do nothing they will eventually get a lawyer. The lawyer will then call you and send letters for some time. Then one day they will just decide enough is enough and either forgive your debt or take you to court. If you go to court and the mediator decides you can't reasonably afford to pay the debt then they will dismiss it and you don't owe a thing. This entire process can take years.

Once a collection agency is involved you can still make payments. They will send you letters and call your house, you can make an arrangement with them and as long as you pay them monthly they wont bother you. At some point if you do nothing they will eventually get a lawyer. The lawyer will then call you and send letters for some time. Then one day they will just decide enough is enough and either forgive your debt or take you to court. If you go to court and the mediator decides you can't reasonably afford to pay the debt then they will dismiss it and you don't owe a thing. This entire process can take years.

But it is important to note that all of this will hurt your credit score badly.

Collection Agencies aren't so bad. They are annoying though. Your credit history might suffer, but I think you can clear it in a few years. You are still young.

I mainly dropped out because I wasn't learning a single thing about anything, and would rather have a degree that I earned, not one that was just a piece of paper, and I still didn't know what I was doing.
I beat myself up everyday for making a big mistake like this.
I never meant to imply that the school as a whole was bad, it really is for people who have hectic lives and such, not 19 year olds who have all the time in the world. I just felt like I deserved 100 percent more than I got for my money.

Yes I have to call Friday and get the collection agencies number.
I will make payments monthly, if affordable!
If not, then I guess i'm SOL!
I'm already double paying my student loans so I can get those out of the way faster!

Thanks everyone for your advice!

Also congrats to the poster who did attend the school and passed at it!
Like I said, it seems like it's a hit and miss kind of thing when going to the school as far as how good of an education you will get for your money, and I missed by about 200 miles. It just wasn't worth paying a grand per class to either learn nothing at all, or learn what I already knew.

When a business turns an account over to a collection agency, they have to pay a hefty commission, so of course they want you to pay them directly (by Monday.) If the school won't negotiate a payment plan with you, you can set up a payment plan with the collection agency. The agency is required to give you thirty days to resolve and/or dispute the debt before they actual report to the credit bureaus. If you choose to pay & not dispute the debt, you may be able to bargain with the agency that as long as you make the promised payments, they will not report the debt to the credit bureau. Once a collection account is reported to the credit bureau, it stays on your credit report for 7 years. Even if you pay it off, it shows on your report for the whole seven years, but of course it is marked paid. If you do not pay as promised, a lawsuit can be filed against you & your wages can be garnished, up to 25% of your pay.
No matter what, if you get sent to collection, contact them immediately & try to work something out. Ignoring the issue makes a worse mess of things.

The law on this type of thing varies from state to state, so you really need to find our what your rights are in your state.

We had a medical emergency without insurance about 8 years ago and learned very quickly that in our state our rights were very limited. Once they decide to not take payments the whole thing can progress very quickly -- at least in my state.

So I wouldn't ignore it either and would try to find out exactly what your legal rights are in your state.

If this is University of Phoenix or Western International University, I am having the same problem. I dropped out for various personal reasons and I NEVER signed a loan paper. They claim I did. I now have a collection agency hounding me after $2000 that I never borrowed. I applied for a grant, not a loan. I would NEVER apply for a loan. For anything. The loan people say I need to contact the school, but every time I do, they put me on hold for an unnaturally long amount of time, one being an hour and a half. They literally won't take my calls. I now have this on my credit and I didn't even sign up for it! Seriously, on MySpace, there's a whole group dedicated to people who have been burned by this school, almost all the same reason. Con artists, I tell ya.

You need to learn your rights under the Fair Debt Collection practices act.

Request a copy of the signed agreement be mailed to you.

You have rights. They expect that you don't know them. Learn them.

Here's a link that might help give you some info.

http://www.ftc.gov/bcp/conline/pubs/credit/fdc.shtm

There are other resources out there too.

The collection agency will try to tell you you have to pay a big payment.
You tell them how much you can send and as long as you send that amount on good faith they can do nothing.
So if you can oly send say $25.00 a month and thats what you do they can't do anything else.
Just make sure you keep a copy of every payment sent so you can deduct it from the original amount...
I have done this before and this is with a Judge telling me how to go about it..

So if you can oly send say $25.00 a month and thats what you do they can't do anything else.

People were telling us that when we had our medical bill and we learned that in our state that is not true. The hospital went so far as to return our checks and our attorney confirmed that they were not required to accept less than their minimum payments.

We had to learn what the law in our state actually said about this very quickly. I still suggest you do the same. If you think your school has done something illegal then by all means look into doing something about that. But right now you still have to deal with this bill -- ignoring it won't make it go away.

Wow, thank you guys for all the help!:grouphug2
What would I need to search for in order to learn the rules for my state of North Carolina, so I can be fully prepared!
I don't wanna be tricked into something again, like I was with UOP.:sigh:

I would try looking at the Crown Ministries website and see if you can find someone with their training in your area. They are a Christian group but a local financial advisor with their training is the first person who told us the hospital did not have to accept payments. Everyone else was telling us to sent them $25 a month -- but they were sending it back.http://http://www.crown.org

You might also check in your area and see if there is anywhere you can ask legal questions or get a low cost consult with an attorney. Sometimes the local Bar Associations have a phone line where you can listen to recorded messages by attorneys on various legal topics.

Good luck.