I was recently duped into signing a "consolidation" agreement with GC Services, a collection agent for the U.S. Department of Education, to repay an initial student loan amount of about $21,000 from 1989-1991. The original amount of the loan, with accrued interest, has now become $63,000, THREE TIMES the amount of the original principal. During the subsequent years, I spent some time in prison and was unable to repay the amounts of the loans. I entered into this agreement with GC to repay $50.00 FIFTY DOLLARS per month (income contingent), and a week after signing the agreement, received statements from GC indicating that my loan had suddenly gone to $90,000!!! I rang them and told them I was instructed not to pay them, but to await word from Direct Loans, a billing agency for the U.S. Department of Education, after my loan consolodation had been processed.
I received the first loan payment statement and the monthly amount is $620.0!!! I NEVER agreed to this, and the repayment schedules the Department of Education sent me indicate that the payoff amount will be over $214,000!!! How can this possible be legan under ANY definition of the law? That makes my repayment of a $21,000 loan 10 times the amount I borrowed! Secondly, the U.S. Department of Education states that your repayment amounts shall not exceed 20% of your gross monthly income, yet this $620.00 payment is in excess of 33% of my monthly income of $12/hour! I would be taken to court for not being able to make the payments, and they indicate that I am NOT eligible for a forbearance.
Can anyone assist? I am contacting this agency, as well as the U.S. Attorney General's Office, the Congressional Oversight Committee and local attorneys, whose services I can NOT afford, in an effort to stop this thievery.
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