Expert: Charles W. Field - 9/24/2004

Question
Hello Mr Field,

This may be out of your area of expertise bu I thought I'd give it a shot. My wife finished college back in the early eighties. She had gotten what she though at the time was a single loan. Within the past six months,she began receiving letters from an organization on behalf of the Dept. of Education that she owes additional funds. The school that she attended has since shut down. She spoke with a representative of the Dept of Education yesterday and was told the she had two loans and only one was paid off. She was also told that these loans were often sold to other companies. She doesn't recall being made aware of this happening. This has just surfaced on her credit report in the past few months (after 19 years of silence). I am wondering if she is still obligated to pay this amount. Wouldn't there be some sort of statute of limitations ? It is not a large amount of money but its odd that it seemingly came out of nowhere.

Answer
Well, if her name is on two loans, she apparently owes for two loans. If the loan(s) was/were "under seal" (i.e., the word "SEAL", usually preprinted on the papers, whoever owns the loan (yes, they can be sold) has twenty years to file suit. This is the Statute of Limitations. Without the word SEAL, they have only four years.