My son attended a private college for 5 semesters. We managed to pay until the last year he was there, and then with a job loss I was unable to keep up with the payments. We owed $7500 and I put $5k on a credit card. I made payments to the school for the final $2500 or so, however, there was an interest charge on it. I would make $100 payments per month, but $75 was going towards interest. I asked the business office if there was a way to pay more of the principle instead of all of that money going toward interest. The only solution they would give was to pay it down, and interest would go down. $100 was a lot for me to pay with no job, so I missed a couple of payments. They threatened to send me to collections if I didn’t make regular payments. As it turned out, my son was struggling academically and he made the decision to come home and go to community college. So he dropped out for his 6th semester (which would have been winter/spring), and we paid out of pocket for community college. However, the private college would not release his transcripts for community college. So I made the decision to quit making payments so that I WOULD be sent to collections and be able to make the payments without interest eating up the whole payment. Well here we are 2.5 years later and I have not made a payment in over two years and they HAVE NOT sent me to collections but continue to rack up interest on my account. We now owe somewhere around $8500, as well as the credit card that I am still making payments on. My question is, is this legal for the college to continue charging me interest on an account they said they were sending to collections, but never did? My son has not attended school there for almost 3 years now and the balance keeps climbing up. Does anyone have any solution to this? Should I contact the department of education in my state? Should I contact the school president so he is aware this is happening? Should I seek legal assistance? This has caused my son to completely drop out of school since community college would not give him any direction without his official transcript. He works now in a warehouse, not making a whole lot of money. He mentions wanting to go back to school, but he is at a roadblock, being unable to obtain his official transcripts. This is basically almost 5 years of a wasted education (community college included). Student loans are now becoming due since he is no longer in school, so he is paying for a dead horse. Please offer some solutions if anyone has any ideas or legal recourse to resolve this! Thank you!
You owe them money. You need to pay them what you owe them…and yes…they are allowed to charge you interest.
Your need to pay these bills!
It’s not the president’s fault…or the college’s fault that these bills didn’t get paid. Or the department of education.
Your kid took out loans…or went to a college and didn’t pay the bills.
Not sure what you think contacting a lawyer will do.
The transcripts from that school will not be released until the bill is completely paid…or you work out a payment plan with the college to do so.
You missed payments. Did you contact the college to explain why?
I would suggest this STUDENT get a full time job…or two part time jobs…and pay off this debt…ASAP. Perhaps you can allow him to live at your home at minimal cost so his whole salary can be used to pay his debts.
ETA…if they send you to collections…you will also get a bill for that…plus interest and penalties for not paying.
Er, they MIGHT be allowed to charge interest. $75/mo on a $2500 balance is a lot in interest, and to charge that much in interest they might need a license to charge that much plus a contract that states that (on the tuition bill?). Ask them to give you a break down of the charges and the application of the payment to interest and principal. If they refuse, contact the consumer dept of your attorney general’s office.
Many businesses just charge 18% interest but they aren’t allowed to do that without a license, and usually one is required if they make more than 25 extensions of credit per year that are repayable in more than 4 installments. Dentists, doctors, vets do it all the time and they can’t unless state law allows it.
I’d ask for the break down and why they are charging that rate.
Was this a FOR Profit college?
Agree with @twoinanddone. If this is the whole story…and you have been paying $100 for many years…this should be paid off by now.
How much NEW interest are they adding on each month?
This was my initial thought as well. Is the college for profit?
I think many colleges charge interest on their bills, but they need to do it legally. They can’t just stick 18% and not apply the payments correctly. It’s likely the bill is being processed by a finance company. If payments have been made late, it is likely the first part of any payment is going to pay late fees, and this results in a ‘pyramid’ of late charges and you never get to principal.
You have to get a print out of all fees and interest, how payments were made, and what you can do to get back on track.