Unrepaired Education Department System Leaves Thousands Stuck in Default

Kelly Field:

Karla De La Torre kept her end of the bargain.

After defaulting on her federal student loan, she entered into a "rehabilitation" agreement with the collection agency and made the required nine on-time payments toward the debt. According to the agreement, her loan was supposed to be restored to good standing last September.

Instead, Ms. De La Torre is stuck in default, the victim of a systems glitch that is taking the Education Department months to correct. Her collection agency told Ms. De La Torre, an executive assistant whose husband was laid off a year and a half ago, that she has to keep paying until the problems are fixed, and it can't say for sure how long that will be.

Posted by Jim Zellmer at April 22, 2012 1:26 AM
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