Government-Backed Loans for Students

Everybody knows that the government guarantees student loans to protect lenders against student borrower wrongdoing.

Who protects the student borrower against lender and government wrongdoing?

I am a 63-year-old grandmother who has been working for years, under considerable difficulties including raising 10 children, to obtain a Ph.D. in clinical psychology. My goal was to spend the rest of my inherited long life, after my children were grown, in useful public service.

Now all I have left to do is finish my dissertation--and it looks as if the government will prevent me from ever getting the degree and ruin me financially besides.

My guaranteed student loan lender, the Knights of Columbus, after granting me a deferment, took it back and arbitrarily, over my protests, declared me in default and got the government to pay them back.

I was able to prove to the Department of Education that the Knights were in the wrong, and in an April 15 letter, the department “requested” the Knights to repurchase the loan.

Now I have learned that the Knights have refused to do this, and that the government will not force them to repurchase the loan, but is instead demanding that I pay the whole thing off by Oct. 1, or they will start imposing huge penalties on me.

I am unable to do this. Not only do I not have the money, I can’t even get a loan to pay them with, because the department has told TRW that I am in default on the student loan, and my formerly perfect credit rating is ruined. I borrowed the money in good faith, expecting to pay it back in the usual way after graduating.

How can the government let this happen? I know life isn’t fair, but this is outrageous!

MARY E. KIMBALL

Sepulveda