Debt Collectors Went After a Student Loan Debt… 50 Years Later

Published

April 4, 2023

Christine DiGangi is the former Deputy Managing Editor - Engagement for Credit.com and covered a variety of personal finance topics. Her writing has been featured on USA Today, MSN, Yahoo! Finance and The New York Times International Weekly, among other outlets.

Young people aren’t the only ones plagued with student loan debt problems. Recently, an Arizona man found a debt collection notice in his mailbox, which said he owed more than $1,900 on student loans he took out in the 1960s, reports 3TV in Phoenix.

About 50 years ago, after serving in the Navy, Ralph Caswell borrowed three loans totaling about $2,500. Caswell told 3TV he repaid the student loans decades ago, and while the collection agency shows his principal balance as zero, it claims Caswell owes about $1,400 in interest, $87 for a penalty and $362 in fees. Caswell said the agency asked him to provide proof he paid off the loans, but he doesn’t have those records. That’s not too surprising, considering how long ago he said he paid off the debt.

This situation suggests you should keep that type of documentation forever: alongside your birth certificate, Social Security card and passport, there’s your student loan statement. While that may sound a little overboard, it’s important to note that student loan debt is treated differently than other debts in many respects. These loans can generally not be written off in bankruptcy, and the consequences of failing to repay student loan debt can follow you for years. If you don’t repay federal student loans, the government can take some of your wages, seize your tax refunds or garnish Social Security payments.

There are lots of rules governing debt collectors’ actions and the timeframe of debt collection, and it’s important that consumers generally understand their rights when trying to resolve new (and old) issues.

Caswell will now have to work out whether he owes the debt with the collector — and, possibly, a consumer attorney. He found out about the claim when he got a notice in the mail, but it will probably show up on his credit report, if it hasn’t already. (Caswell told 3TV he currently has good credit.) Regularly reviewing your credit reports can help you spot surprises like this and potentially resolve them more quickly. You can get your credit reports for free each year on AnnualCreditReport.com and view your credit scores for free each month on Credit.com. If you think items on your reports are incorrect, here’s a guide to credit reporting errors and how they happen.