Can DH's school do this?

[Anonymous]

DH is about to graduate and got a federal loan to finish his last semester. We were supposed to start paying it in May. School just called him back asking for the money back because they made a mistake and he was not eligible for the money because he's not American.

Well, we have absolutely no money to pay this loan and we're banking on his new job to pay for it (the plan was to use his sign on bonus to pay it all at once). Is this even legal? I mean, can they give people the money then just call them and demand the money back?

[Anonymous]

I don't know if they can do it or not, but they will likely withhold his degree/transcript if you don't pay.

Can you ask them about a payment plan, starting with paying it back in June or whenever he gets an offer?

[Anonymous]

what will they do if he doesnt pay?

Call and ask to have a meeting with someone about it.

[Anonymous]

Anonymous wrote:I don't know if they can do it or not, but they will likely withhold his degree/transcript if you don't pay.

Can you ask them about a payment plan, starting with paying it back in June or whenever he gets an offer?

He graduates in March, new job starts in April and we were supposed to start paying in May. We'll use his sign on bonus and pay the whole thing. We called our attorney but she takes a few days to get back to us.

This is so horrible. How can they give the money and then just expect that we hand it back like that? It was the exact amount to pay for the class. This is ridiculous!

[Anonymous]

Anonymous wrote:

Anonymous wrote:I don't know if they can do it or not, but they will likely withhold his degree/transcript if you don't pay.

Can you ask them about a payment plan, starting with paying it back in June or whenever he gets an offer?

He graduates in March, new job starts in April and we were supposed to start paying in May. We'll use his sign on bonus and pay the whole thing. We called our attorney but she takes a few days to get back to us.

This is so horrible. How can they give the money and then just expect that we hand it back like that? It was the exact amount to pay for the class. This is ridiculous!

They made a mistake. It happens.

If you think this is bad, I hope the IRS never gives you a refund by mistake and then demands it back, with penalties and interest.

[Anonymous]

Can you take a private loan, pay the school back, then pay the private loan out of his signing bonus?

[Anonymous]

Did you not read the kind of loan you were taking out? If you signed something stating you agreed to the terms of the loan then you are violation of the contract. The school didn't "do" this to you. And yes, they can back out the loan and put the balance on your account.

[Anonymous]

What do you mean by "federral loan." Student loans are guaranteed by the feds but the actual loan comes from a bank, which turns the loan proceeds over to the school. The school has no dog in this fight and the bank can't "lien" DH's degree. You can't get blood from a stone anyway - offer to pay the money back, as agreed. No one has any other recourse.

[Anonymous]

Why/how did he apply for a federal loan if he's not a citizen. Did he lie on the application form?

[Anonymous]

Anonymous wrote:What do you mean by "federral loan." Student loans are guaranteed by the feds but the actual loan comes from a bank, which turns the loan proceeds over to the school. The school has no dog in this fight and the bank can't "lien" DH's degree. You can't get blood from a stone anyway - offer to pay the money back, as agreed. No one has any other recourse.

The bank can require that the school return it, which means that DH's husband hasn't paid for his degree and thus is not entitled to graduate.

[Anonymous]

Anonymous wrote:What do you mean by "federral loan." Student loans are guaranteed by the feds but the actual loan comes from a bank, which turns the loan proceeds over to the school. The school has no dog in this fight and the bank can't "lien" DH's degree. You can't get blood from a stone anyway - offer to pay the money back, as agreed. No one has any other recourse.

My understanding of how this works is the loan company will simply take the money from the school, the school will then bill the OP and her DH the amount of tuition and if they do not pay, he will be removed from the class.

[Anonymous]

Very likely what will happen is that the school will hold his diploma until this is resolved. He will be able to walk at graduation, but will not receive his diploma or be able to get his official transcripts. Talk to the bursar's office about this. Since he is graduating in March and you plan to pay off the loan in April, they will probably be very willing to work with you. You will not be the first case like this that they have seen.

[Anonymous]

They will not give you the degree until you find a way to pay for it.

This is why our banks are in such a mess.

[Anonymous]

Anonymous wrote:Why/how did he apply for a federal loan if he's not a citizen. Did he lie on the application form?

We're in an immigration limbo waiting for the green card so we're entitled but because of some stupid technicality the school is saying we are not.

We're immigrants, not liars.

[Anonymous]

OP, get in touch with the international student office at your school to make sure that the school is not in error about the loan--the international office should know (even if your husband isn't an F-1/J-1 student).

And I would also recommend setting up a repayment plan of a small amount per month, then paying off the entire amount with the signing bonus--but maybe not promising that part up front? Just to give yourself a cushion.