At the Department of Education, Lack of Objectively Implemented Debt Validation Standards Breeds Extortion

The U.S. Department of Education receives and takes the possession of many student loans. According to the Department of Education representative, the Department of Education operates under the premise that the previous debt holder’s records are correct, until the alleged debtor provides “persuasive evidence that the previous holder’s report was wrong.”

So, when the Department of Education receives records from a guaranty agency, these records are assumed to be correct, even if the records clearly are incomplete and may very well be invalid. That is, the Department of Education has set up its operations so that it takes possession of debt assuming that the debt exists, even when there is no sufficient proof of this being true.

Operating this way is both more convenient and more profitable for the Department of Education, because it can turn all sorts of debt, including otherwise nonexistent debt, into revenue streams. When the Department of Education takes possession of the debt, it could apply rigid standards and verify among other things that the debt actually exists, before it becomes the owner of the debt. However, the Department of Education has chosen not to do that. Instead, the Department of Education has chosen to exercise the extraordinary debt collection powers that it has been granted.

Similarly, the Department of Education does not have any comprehensive debt validation standards and system in place that is being applied objectively, without inconsistencies and discrimination that inevitably result from subjective personal judgments. Accordingly, in debt validation cases the Department of Education sees its role as that of debt and payment enforcement, rather than debt validation, whether the debt actually exists or not.

Because of the debt collection powers that it has been granted, the Department of Education feels entitled to enforce student loan payments through usage of force and threats. This operating model is applied also when debt validation is requested from the Department of Education. As my case indicates, when the Department of Education does not have the needed proof that any debt exists in reality, it simply ignores its obligation to provide debt validation, and continues to make monetary demands. In the process the Department of Education insists, that the student loan applicant owes it money until the student loan applicant is able to prove that the debt does not exist. Further, the Department of Education insists, that is does not have to provide any conclusive proof that the lending and borrowing transactions that would result in debt ever took place. In addition, the Department of Education insists, that is does not have to provide any conclusive proof that it holds valid documents. For example, in my case the Department of Education insists, that is does not have to provide any conclusive proof that it holds valid promissory notes and valid Notice of Loan Guarantee and Disclosure Statements, or lending and borrowing transaction documents, or documents that show conclusively that I ever received any student loans either directly or indirectly, as tuition support, or any other documents that validate its monetary demands.

Is this how a branch of the U.S. government is supposed to operate, or is this an operating model that is built on abuse of power? These two options should be mutually exclusive. Hard to say, which one is worse, isn’t it.

Below is a copy of another open letter to Mr. Arne Duncan, U.S. Secretary of Education.

Contents

Fourth Open Letter Sent to Mr. Arne Duncan, U.S. Secretary of Education

A copy of the letter published below was delivered to the following institutions and people:

  • This time, two Priority Mail letters sent to the Department of Education disappeared:
  • 9505510383223119357910 and 9505510297923168377269
  • However, the Express Mail sent did make it to the destination:
  • - Arne Duncan, U.S. Secretary of Education, USPS Delivery Confirmation EB931219820US
  • - Naomi Randolph, Special Assistant, Operations Services, Federal Student Aid, USPS Delivery Confirmation EI064358135US
  • - Chris E. Van Dellen, President, Collection Technology, Inc., USPS Delivery Confirmation EB931219855US

Mr. Arne Duncan, U.S. Secretary of Education

U.S. Department of Education

400 Maryland Avenue S.W.

Washington, DC 20202

Dear Mr. Duncan,

Thank you for your letter dated 05/21/13 that your assistant sent to me on your behalf regarding your demands for payments for unvalidated student loan debt. Please note that this is an open letter that I will publish on the Internet, on StopExtortion.org so that it is accessible to the general public and to other institutions.

For a year and a half I have been requesting debt validation, and you still have not validated your monetary demands. I have furnished evidence that the cost of my education was covered with grants. You have not validated debt by furnishing evidence that lending and borrowing took place and that I received student loans either directly or indirectly, as tuition support. Further, even though you have not validated existence of any debt, you keep demanding that I must show that the debt is not owed, and you continue making the same monetary demands as before.

Mr. Duncan, you represent the party that makes alleged student loan related monetary demands. Accordingly, the burden of proof of student loan debt validation is on you.

I underlined the word “debt” because so far you have been avoiding debt validation. Instead, you have furnished partial copies of signed financial aid Application and Promissory Note documents, and stated that you have internal records.

  • We do have proof that I received grants that paid for my education, but we do not have proof that in addition to grants I also received student loans. Accordingly, I cannot accept partial copies of financial aid applications as conclusive debt validation instruments. Without signed documents that demonstrate that lending and borrowing took place and that I actually received student loans, my filling in financial aid applications does not make me a student loan borrower.
  • Similarly, I cannot consider internal documents of a guaranty agency that manufactures documents at will more than a decade after I graduated from college to be appropriate conclusive debt validation instruments.

You have stressed that I owe the amounts of financial aid that I applied for, because I signed the promissory note portion of the Application and Promissory Note financial aid applications.

Mr. Duncan, let me emphasize here one more time, that these are financial aid applications that I filled in, not loan disbursement documents or something similar that would demonstrate lending and borrowing. Further, the Application and Promissory Note financial aid documents that I signed do not require me to pay you or anybody else the money that I applied for without actually receiving loans. Furthermore, the Application and Promissory Note financial aid documents that I signed in the past lack the information that is necessary for qualifying these documents alone as legally binding promissory notes.

Mr. Duncan, I am asking you once again to explain, what makes the Promissory Note portions of the financial aid applications legally binding debt instruments without signed documents that demonstrate that lending and borrowing took place and that I received student loans, either directly or indirectly, as tuition support? That is, what makes the Promissory Note portions of the financial aid applications legally binding debt instruments, so that I am obligated to pay you the financial aid amounts that I applied for, without you validating the debt that would result from actually documented lending and borrowing?

Until you have provided valid and reliable answers to these questions, please stop referring to signing financial aid applications as if that act alone, without other documents, would somehow equal to borrowing money. There are differences between filling in financial aid applications and receiving loans, and you must acknowledge this.

Necessary Debt Validation Aspects

When we address debt, we must follow the generally accepted conventions and definitions.

In accordance with the generally accepted conventions and definitions, debt is created when a creditor has agreed to lend a sum of assets to a debtor, the debtor has accepted the sum of assets and the repayment conditions, and the debt is evidenced by a note which specifies, among other things, the principal amount, interest rate, and the date or dates of repayment.

To put it differently, without borrowing and lending, there is no student loan debt, and student loan borrowing and lending must be documented by using generally accepted lending related requirements.

Accordingly, as part of debt validation, I expect you to demonstrate via usage of signed documents that the lender did lend and I did borrow the money that you demand from me as student loans.

In your letter you stated that

  • Schools frequently apply the funds from student loans to enrollment expenses, such as tuition, fees and other school charges. Students frequently do not directly receive the funds.

Accordingly, at the very least, I expect you to provide records that contain the dates and amounts of student loans that were applied to enrollment expenses, such as tuition, fees and other school charges, without my receiving the funds directly.

To put it differently, if you claim that I did receive student loans and that these loans were used in a certain way, instead of making only general statements (“Schools frequently apply…”), I expect you to provide concrete proof that is directly relevant to my case and validates your monetary demands. So far you have not provided any such debt validation whatsoever. Instead, you are making statements and you apparently expect these statements to be a form of debt validation.

To put it differently, you consistently state that something is so, and then you expect it to be so because you say so. Maybe things work this way in the Department of Education, but when we dispute your monetary demands, you must prove the validity of every aspect of your demands, every step of the way. Going forward, please keep this in mind, so that we do not have to address the same topics over and over again.

Further, you have been dragging this case on and on, necessitating my active involvement in it. Instead, I expect the Department of Education to resolve the discrepancies, so that the Department of Education:

  • validates its monetary demands within a pre-designated period of time by providing the necessary accurate and sufficiently complete support documents that demonstrate that lending and borrowing have taken place, and
  • drops these monetary demands that it does not validate, without necessitating student loan applicant’s active involvement in the debt validation process for a prolonged period of time.

Debt Validation Standards

  • Mr. Duncan, what debt validation standards does the Department of Education follow?
  • Are these debt validation standards applied consistently to all student loan cases that are disputed?
  • Are these debt validation standards publicly accessible over the Internet?

Lending Documentation Standards

  • Mr. Duncan, what standards did the Department of Education implement for creating Application and Promissory Note financial aid applications and other financial aid and lending and borrowing related documents (“lending related documents”) that the schools such as Rhode Island College used in the first half of 1990s?
  • What standards does the Department of Education implement for creating the lending related documents that the schools are using now?
  • What measures did the Department of Education implement for administering its lending related document usage in the first half of 1990s?
  • What measures does the Department of Education implement now for administering its lending related document usage?
  • What standards and administrative measures did the Department of Education use in the first half of 1990s for ensuring that these portions of the documents that are labeled as Promissory Note, are indeed legally binding debt instruments that demonstrate lending and borrowing in accordance with the accepted conventions, and are not mere labels on financial aid applications, that a financial aid applicant may fill in as part of the application?
  • What standards and administrative measures does the Department of Education use now for ensuring that these portions of the documents that are labeled as Promissory Note, are indeed legally binding debt instruments that demonstrate lending and borrowing in accordance with the accepted conventions, and are not mere labels on financial aid applications, that a financial aid applicant may fill in as part of the application?
  • Are these documentation standards that the Department of Education followed in the first half of 1990s for creating lending related documents also applied consistently to all disputed student loan cases from that period of time?
  • Are the past lending related document creating and usage administration standards, that the Department of Education followed in the first half of 1990s, publicly accessible over the Internet?
  • Are the lending related document creating and usage administration standards, that the Department of Education follows now, publicly accessible over the Internet?

Please Explain How You Reached These Conclusions

Mr. Duncan, you stated the following:

  • It is the Department’s position that we have provided you with sufficient documentation to support the validity of this debt.

You also stated the following:

  • You have not provided sufficient evidence to show that the costs of attendance at the school were satisfied by grants.

Again, you are making statements, without explaining how you reached these conclusions. What criteria did you apply for determining the above?

  • For all practical purposes, the only legitimate documents that you have furnished are partial copies (front ends) of financial aid applications that I signed in the first half of 1990s.
  • As I stated above, without proof that I actually received student loans, I cannot accept my signing the Promissory Note portion of the financial aid applications as a form of debt validation.
  • I had to fill in these financial aid applications every school year in order to apply for financial aid (grants), which I then also received. In the application filling process I had to fill in and sign the Promissory Note portion of the application as well, which I did, as I was instructed to do. This Promissory Note portion of the financial aid application is part of the same application, on the same sheet of paper, where the rest of the application is.
  • Further, the Application and Promissory Note financial aid documents that I signed state that I must pay back money that I will actually receive as loans. These Promissory Notes do not state that I must pay back money that I receive as grants. Further, these Promissory Notes do not state that I must pay to you or to any other entity the amounts that I applied for when I filled in the financial aid applications even when I do not receive any loans.
  • Based on the fact that I did fill in Application and Promissory Note financial aid applications, at the most, you can consider me a former student loan applicant. Once again, without signed documents that demonstrate that lending and borrowing took place and that I actually received student loans, my filling in financial aid applications does not make me a student loan borrower.
  • You have not bridged the gap between my being a student loan applicant, and your demands for student loan payments.
  • Further, I asked you to provide two-sided (duplex) copies of the original two-sided documents. You refused to do so without any explanation of why you are refusing to provide two-sided copies. Because the separate back ends of the copies that you sent me do not contain any identifying information whatsoever that links these back ends with the front ends, we do not know where the copies of the back ends of these documents came from.
  • I came to the U.S. (and to Rhode Island) in 1989, and attended Rhode Island College a year later, from 1990-1996. As I have stated before, as a student I did not qualify for loans because I was in the U.S. on a temporary visa as a political refugee when I first attended school, and then on Green Card, without any credit history, co-signer or collateral in the U.S. Further, initially I did not have any U.S. work experience and work history either. The construction, house repairs and renovation work that I occasionally did helped to cover the living expenses which I kept extremely low, but did not help me to build income or work history that would have supported borrowing from a bank while I was a student.
  • Accordingly, year after year, on most of the financial aid application copies that you sent me, the To Be Completed by the Lender section contains a lender’s stamp, Lender Code, phone number, and in the Loan Amount Approved box the amount of $0.00 (zero dollars), and empty spaces in the Interest Rate part and the Fee part.
  • As I have pointed out before, the same Application and Promissory Note documents whose partial copies you sent me, contain the financial aid amounts (that were filled in by the people who processed these applications). These financial aid amounts exceeded the cost of tuition for every school year that I attended Rhode Island College (1990-1996). For example, for 1990-91 school year the estimated financial aid amount was $3,300, versus $1,703 tuition for the 1990-91 school year. Similarly, financial aid amounts exceeded the tuition for other school years as well.
  • Some of these grants were related to my attending Rhode Island College as an honors student. Further, you stated that according to your records I also received $5,560 as Pell Grants from 1993 to 1996.
  • In your letters you have suggested that the loans may have been applied to tuition and fees, without my receiving the money directly. This is not plausible. The total amount of grants that I received more than covers the cost of tuition. However, even if we leave out the grants that I received, the numbers do not add up.
  • I attended Rhode Island College from 1990 to 1996. Based on the available information, Rhode Island College in state tuitions for the 1990-1996 school years totals $13,938.00. You demand from me $55,073.83 as principal, which is the amount that according to you would have been applied to tuition and fees.
  • You have not explained in any way whatsoever the disparity between these amounts. In addition, you also demand from me interest and fees totaling with the principal $134,497.84 (and growing).
  • As part of the debt validation, I expect you to demonstrate how precisely your monetary demands are related to my benefitting as a student from the money that you demand from me.
  • Once again, you are the party that makes monetary demands. Accordingly, this burden of proof is on you. You must validate the debt and your monetary demands.
  • Once again, so far you have not provided any such debt validation whatsoever.
  • If I would have received loans in the amounts that you are demanding from me, either directly or indirectly as tuition support, we would have at least some sort of documents that I would have had to sign to receive this money, would we not? We do not have any such documents.
  • Once again, you have not provided any official signed documents that would demonstrate that my filling in the financial aid applications resulted in lending and borrowing money in addition to my receiving grants as financial aid.
  • Thus, until proven otherwise, as I have stated before and as we can conclude from the existing evidence, the financial aid applications that I signed and submitted were used for processing the grants, but the loans were not approved.
  • You stated that you also have internal documents. When I asked you to provide copies of these internal documents, the guaranty agency that you work with started manufacturing documents – over a decade after I had graduated from college. In the process your colleagues used a wrong bank’s name. Later you stated that they had made “an error.”

When you validate a debt at the Department of Education, I hope, that you have a sound and comprehensive debt validation standards and system in place that you apply objectively. Do you? Further, I hope that you are not discriminating against individual student loan applicants, past or present, by applying subjective judgment to debt validation.

Accordingly, please explain in detail, how did you arrive at the conclusion that you have provided sufficient documentation to support the validity of the debt, while I have not provided sufficient evidence to show that the costs of attendance at the school were satisfied by grants?

How Does Usage of Involuntary Servitude Benefit the Department of Education?

Mr. Duncan, you continue to make demands that have been accompanied by threats, without validating your demands. By using the powers granted to the institution that you are leading, you have created a situation where you have rendered me into involuntary servitude.

My options have been either to work on this debt validation case, or to yield to your demands for $134,497.84 (and growing). Yielding to your pressure and making payments to you for unvalidated, nonexistent debt would render me into financial servitude for an unknown period of time.

There are two aspects to this situation that I need to clarify:

  • You have forced me to work for you in involuntary servitude conditions, so that I do some of the work that your employees should be doing.
  • By necessity I have to invoice you for the services rendered in self defense in involuntary servitude conditions.

Just like you need to validate your monetary demands, I need to validate mine. I will provide relevant information below. Please let me know if you need additional information. Similarly, as I requested above, I expect you to validate your demands and relevant statements, and to explain your conclusions to me so that it is understandable, how you reached these conclusions.

Before you dismiss my arguments, have your legal experts examine them. They will tell you, that the case that I am forced to build against you does have a valid base.

Working for the Department of Education in Involuntary Servitude Conditions

Student loan borrowers have lost their consumer protection rights. Similarly, when I deal with the Department of Education as a former financial aid applicant, I do not have the same consumer protection rights that I do when I deal with other financial institutions. There is no other financial institution that could continuously demand money from me based on partial copies of loan applications and its own internal documents, without any signed loan contracts and other properly documented evidence that demonstrates that borrowing and lending have taken place. The Department of Education is the only institution that can make such demands.

The Department of Education is benefitting financially from the former students not having consumer protection rights, because this policy helps the Department of Education to generate additional revenue.

At the same time, the Department of Education, in instances when it claims that it has taken over the promissory notes, is also subject to any defenses that the student/obligee may assert against the assignor/lender.

Accordingly, I hold it to be true, that the Department of Education is operating in circumstances where the Department of Education is obligated to handle its monetary demands related cases so, that the Department of Education validates within a pre-determined period of time all these disputed aspects of its monetary demands that are related to student loan transactions, by providing the necessary accurate and sufficiently complete support documents. Further, the Department of Education should drop these monetary demands that it does not validate, without necessitating student loan applicant’s active involvement in the debt validation process for a prolonged period of time.

To put it differently, the Department of Education should also work on behalf of the former students whose consumer protection rights have been taken away, not solely against the former students.

In my case, you have been working solely against me, trying to render me into financial servitude without validating your demands. You do not validate the existence of debt, yet you keep demanding that I must show that the debt is not owed.

Thus, by not doing your job properly, you have been forcing me to do part of your job for you, so that we have a balanced and fair picture of the situation.

Below is a partial description of some of the tasks that I have had to handle in this process.

Your business partners-debt collectors sent me a letter dated 12/03/11 with monetary demands.

I contacted you business partners-debt collectors via certified mail on 12/16/2011, 1/24/2012, and on 04/14/2012, requesting debt validation. All the letters mentioned here have been sent by either via USPS certified mail, USPS Priority Mail or USPS Express Mail.

I also contacted the Office of the General Counsel of the U.S. Department of Education on 1/16/2012.

Further, I also contacted The Honorable Martha Coakley, Attorney General of Massachusetts, on 04/14/2012. After speaking with Attorney General’s representative, I sent to Attorney General’s office additional information on 05/14/2012.

The debt collectors-business partners of yours did not respond to my requests for debt validation, and they also refused to answer Massachusetts Attorney General representative’s questions.

I also contacted the U.S. Department of Education on 04/14/2012, and I contacted your office again in response to your letters on 06/23/12 and on 08/28/12, 10/06/12, 11/26/12, 02/16/13, and on 04/27/13. I have been requesting debt validation throughout this communication process.

The first debt collector company that you assigned to this case, FMS Services (aka Financial Management Systems, a private collection agency), hired an attorney, so that I would not contact them again. That is, this collection company first demanded $133,696.48 from me. After I repeatedly requested debt validation, and FMS Services apparently examined the merits of this case, FMS Services decided to invest into hiring an attorney so that they can request from me not to be contacted again, and I can only contact their attorney instead.

Your first business partner-debt collector company’s attorney, Mr. James K. Schultz of Sessions, Fishman, Nathan & Israel, L.L.C. law firm, sent me a letter dated 09/13/12 and asked not to contact FMS Services debt collection company any more. After that, I had to contact Mr. Schultz on 09/17/12, 10/06/12 and on 10/26/12.

Then you assigned second business partner-debt collector company to this case, Collection Technology, Inc. I contacted this company on 12/03/12, requesting debt validation. I contacted this company again on 02/16/13 and on 04/27/13.

In your letters to me, dated 06/07/12 and 07/27/12, you described your monetary demands at length.

Later it turned out, that these demands are all based on partial copies of financial aid applications, and that there is no evidence that any of the amounts quoted have materialized as loans that benefitted me either directly or indirectly as a student when I attended college decades ago.

You also stated having internal records that in your opinion validate the existence of debt. Later it turned out that in order to have internal records, you have to manufacture them.

In your letter dated 01/16/13 you stated that the Department accepts the information in its records “… until we receive persuasive evidence that the previous holder’s report was wrong.”

In my letter to you dated 02/16/13 I demonstrated that the amounts of financial aid that I received from the college that I attended clearly exceeded the cost of tuition, fees and books.

In your letters dated 11/12/12, 01/16/13 and 04/04/13 you stated that I have the burden to prove that the debt is not owed – even though we do not have any legitimate evidence that there is any debt that I owe to you. So, you created a situation where you do not validate the existence of any debt, but you keep demanding from me that I must prove that I do not owe a non-existing debt.

I have consistently asked you to provide documents that would validate the debt, so that I would know if there is any debt that I actually do owe to the Department of Education. You have consistently failed to provide any documents that would show that lending and borrowing took place and that any of the money that you demand from me actually benefitted me as a student, either as tuition support, or in any other way.

In your most recent letter, dated 05/21/13, you stated that it is your position that you have provided sufficient documentation to support the validity of this debt, but I have not provided sufficient evidence to show that the costs of attendance were satisfied by grants.

Mr. Duncan, the Department of Education that you lead and manage does not seem to use any uniform, publicly accessible debt validation standards that are in agreement with the contemporary requirements (for example, Massachusetts Debt Collection Regulations). Thus, no matter what information I provide to you, you can declare that it is insufficient. Similarly, you can declare that in your opinion you have provided sufficient information on your part, even when in reality you have not furnished any necessary information at all.

As a result, you keep me involved in this case, so that I do part of the work that your employees should be doing, if they would be required to follow progressive debt validation standards. Further, you necessitate my involvement in this case much longer than it would be necessary, if the Department of Education would drop these monetary demands that it does not validate.

Operating in this manner is financially beneficial to you to. You use the leverage of removal of consumer protection rights combined with the powers granted to you, and go after a former student who could be a possible source of revenue to you.

If you would direct your employees to use progressive debt validation standards, and to drop these monetary demands that the Department of Education does not validate, your employees would do so. However, both your revenues and the receivables on your balance sheet would probably be lower. Thus, it seems that:

  • Usage of extortion is more profitable to you than following progressive debt validation standards would be.
  • Similarly, usage of extortion is more profitable to you than dropping unvalidated demands would be.

Mr. Duncan, please note that you have chosen to run the Department of Education this way. The Department of Education does not manage itself. You are responsible for managing this institution and for the consequences of your administrative decisions and indecisions, actions that you do take, and actions that you should take as a leader, but do not take.

Invoicing the Department of Education for the Services Rendered in Self Defense in Involuntary Servitude Conditions

Mr. Duncan, so far you and your team of people have not shown any interest in finding a constructive solution to this case. You simply continue making unvalidated demands that have been accompanied by threats.

Thus, I have to find ways to bring this case to a feasible conclusion. In addition to having to write numerous letters, so that we have records that we can reference, I have also put up a website, StopExtortion.org. Over time, this may help me to find other people whom you force to make payments without validating your demands. Legal action is not my preferred route, but if that will become unavoidable, sharing the cost of legal action against you with other people will be helpful.

Being continuously involved in this dispute for a year and a half (so far) has required substantial amounts of my time. Further, as a result I have not been able to spend enough time on my professional development.

I have invoiced you for the time that you have forced me to spend on this case, so that I do the work that your employees should be doing. Because you continue to keep me involved in this case, I have to continue to invoice you.

My building a strong case against you and also building up the value of the potential assets by continuing to invoice you, will also improve the probability that I will be able to use the assistance of competent legal help when I need to do so.

As I stated before, I am invoicing you at the same hourly rate that I would charge as a consultant when I handle database application development tasks.

At this point I am invoicing you for my services only. I reserve the right to bill you separately for other applicable charges. In addition, please note that at this point I am not requesting compensation for emotional distress and other similar harm that you continue to cause to me. Similarly, at this point I am not requesting compensation for the losses that I am experiencing because I am not able to spend enough time on my professional development. However, I reserve the right to request such compensation through the involvement of applicable legal institutions.

Additionally, please note that after 60 days from the date of issuing, if not paid in full, the unpaid invoice amount will carry 24.34% interest. This is the same interest rate that you apply to my non-existing student loans, so that you can furnish lucrative deals to your debt collector business partners. Similarly, I am using this rate, so that I can pay for the professional legal and debt collection services in case you will not pay for the attached invoice, for the previous invoice and for other invoices that will follow.

Communication Process

In your responses, you refer me to your business partner-collection agency. Mr. Duncan, first I expect you to validate the monetary demands. Why would I want to communicate with a collection agency, when I have requested debt validation for a year and a half, and the debt and the monetary demands have still not been validated?

Who Is in the Shoes of the Lender?

Mr. Duncan, you stated that I should contact the school that I attended if I believe that I was overcharged for the cost of attendance. Similarly, previously you have stated that the school was responsible for the loan eligibility determination.

Understandably, you would like me to divide my attention, or to direct it to somewhere else other than you and the Department of Education.

However, Mr. Duncan, until you demonstrate to me that I was actually charged the amount of money that you demand from me, I have no reason at all to believe that your claims and demands are valid. Neither my filling in financial aid applications, nor your creating internal documents result in valid charges or debt.

I do not have any dispute with the school that I attended. Further, the school that I attended does not demand any money from me, and does not claim that it holds legally binding promissory notes. You demand money from me, and you claim that the Department of Education holds legally binding promissory notes – which were, for all practical purposes, simply portions of the financial aid applications.

You are responsible for validating your monetary demands, and you have not done so. Similarly, because you claim that you hold promissory notes, as I have stated before (citing),

  • as assignees, the Guaranty Agencies and other secondary holders step into the shoes of the lender from whom they have taken the promissory notes and are subject to any defenses that the student/obligee may assert against the assignor/lender. See Jackson v. Culinary School of Washington, 788 F. Supp. 1233, 1248 n.9 (D.D.C. 1992), reversed on other grounds, 27 F.2d 573 (D.C. Cir. 1994), vacated, 515 U.S. 1139, on reconsideration, 59 F.3d 354 (D.C. Cir. 1995).

Please note that the above citation is applicable to the time period the loans were made.

So, let me state one more time: as long as you continue making unsubstantiated financial demands, you are forcing me to continue to request that you either validate the debt, or stop making demands. I consider you to be the party who is subject to any defenses that the student/obligee may assert against the assignor/lender.

You consider me to the student/obligee, I consider you to be in the shoes of the assignor/lender. And around and around we go.

Further, please note that it is my opinion, that as long as you make unsubstantiated financial demands, accompanied by threats, you are engaging in extortion.

The Problems Will Not Go Away

Our communication process over the year and a half has had the following general pattern:

  • You make monetary demands, insisting that I owe student loans.
  • I explain that to the best of my knowledge the cost of my college attendance years ago was covered with grants, and request that you validate your monetary demands.
  • You refer to financial aid applications and internal documents, and repeat the same monetary demands.
  • I point out that partial copies of financial aid applications that you sent me do contain information on the financial aid that I received. However, without signed documents that demonstrate that lending and borrowing took place and that I actually received student loans, neither my filling in financial aid applications nor your creating internal documents provide evidence that I received student loans. Accordingly, I request again that you validate your demands.
  • You refer to financial aid applications and internal documents, and repeat the same monetary demands.
  • I explain again, that the grants that I received covered the cost of my education, and request that you validate your monetary demands.
  • Now, and going forward, you can also add to this my invoicing you during every communication cycle for the services rendered in involuntary servitude conditions. Further, unless the invoices are paid in full by the due dates, the unpaid amount will carry interest, and I will publicly proceed with the collection activities, collecting from you on the past due amounts, interest included.

Mr. Duncan, isn’t it time to realize, that if we keep going and going this way in circles, we both lose? The relevant problems can get much worse, but they will not go away on their own. I keep building a case against you, and as long as you forcefully keep me involved in this case by making unvalidated demands, I keep invoicing you for the services rendered in involuntary servitude conditions. However, instead of spending time so unproductively, I would much prefer to spend the same time on my professional development.

Are lawsuits really a desirable solution for you? Do you really believe that either you, any of your staff members, or the Department of Education as an institution will be better off if you choose that route?

I believe, that we will all be better off, if we are willing to find more constructive solutions. Unfortunately, so far you have not shown any interest in the latter.

Failure to Answer the Questions Asked

You also failed to respond to my questions, and to show that your demands have a valid and legal base. So, I will ask the relevant questions again, adding new questions as needed. I will repeat the unanswered questions until you answer each one of them. Because you want to perpetuate this case, sooner or later you will have to answer them.

I will list the questions numerically. Please answer the questions using the same numbering format, so that I can match your responses to the questions asked.

1.1. The “Application and Promissory Note” documents, that were part of the financial aid applications that I submitted in the past, are two-sided documents.

Why are copies of these two-sided documents split into two separate sheets of paper, so that one contains the front end, and the other, separate sheet of paper, the back end?

1.2. The back ends of the “Application and Promissory Note” documents do not contain any identifying information at all that would relate these back ends copies to specific front end parts of the same loan applications.

Question: Because these are all individual sheets of paper, how can you assert reliably and validly which documents actually belong together?

1.3. Obviously, people who handle documents professionally had to realize that they are potentially causing problems by splitting a two sided Application and Promissory Note document into two separate copies and sheets of paper which do not contain information that relates the two sheets of paper. As professionals, they must have realized that their doing so can lead to putting together wrong sheets of paper as one document either accidentally or intentionally.

Given, that these two-sided documents were intentionally split into two separate sheets of paper, the reason for doing so might be that this way it was easier for the agency that maintained these records to mix and match them, and to create needed outcomes as a result. For example, this technique may have been part of a process that helped to balance the books in case of discrepancies, so that certain applications were selected in order to create fictional assets.

Question: How do you know with certainty, that the agency that maintained my paper based records has not mixed front ends and back ends from different persons student loan applications?

1.4. Do you or any agency the Department of Education works with or has worked with hold two-sided original documents named Application and Promissory Note that I signed in the past?

1.4.1. If you or any agency the Department of Education works with or has worked with hold two-sided original documents named Application and Promissory Note that I signed in the past, please send me two-sided copies of these original documents. Please do not send me one-sided copies, so that you make separate copies of the front and back end of the original documents.

Similarly, please do not send me two-sided copies that are made from copies. Such copies can be made by putting together two sheets of paper and copying both sides as if it were one document. That would be another instance of document fabrication, equivalent to forgery.

1.4.2. If you or any agency the Department of Education works with or has worked with hold two-sided original documents named Application and Promissory Note that I signed in the past, but you refuse to send me two-sided copies of these documents, please explain why you refuse to send me these two-sided copies.

1.4.3. If neither you nor any agency that the Department of Education works with or has worked with hold two-sided original documents named Application and Promissory Note that I signed in the past, please state so.

Until you send me two-sided copies of the two-sided Application and Promissory Note financial aid applications, I maintain that the separate copies of the back ends of Application and Promissory Note documents do not belong to me. As we have seen, the guaranty agency makes errors, and erroneously may have related copies of the back ends from somebody else’s documents with front ends of my student loan applications.

It may very well be that my financial aid applications did enter the guaranty agency, but either none or most of them never went any further than that, because Fleet National Bank did not approve them.

1.5. In your letter, dated 04/04/13, you stated that:

  • In October 1997, Fleet National Bank stamped the back of each “Application and Promissory Note” indicating that the loans were being assigned to the Rhode Island Higher Education Assistance Authority (RIHEAA), and that the loans were payable to the guaranty agency.

However, the stamps in the back of the loan applications read AFSA Data Corporation, with Fleet National Bk separately hand written below the stamp.

AFSA Data Corporation services student loans on behalf of financial institutions, colleges and universities, and the Federal Government. AFSA Data Corporation may have handled student loans for Fleet National Bank. However, AFSA Data Corporation and Fleet National Bank are two different companies.

Question: Given, that these copies that you sent me were stamped by AFSA Data Corporation and not by Fleet National Bank, why do you make statements that are not true?

It seems, that you are now desperately trying to tie me to loans from Fleet National Bank. In the process, the same pattern of behavior continues, where people working for you are trying to make up evidence to support your claims.

1.6. In the past, I filled in and signed the Application and Promissory Note as part of the financial aid application filling process. Would it have been possible for me to apply for student loans without signing the Promissory Note area of the loan application?

1.7. The Application and Promissory Note financial aid documents that I signed in the past lack the information that is necessary for qualifying them as legally binding promissory notes. Please explain, what makes these financial aid application parts legally binding promissory notes in your opinion?

1.8.1. As I stated above, in accordance with the generally accepted conventions and definitions, I believe that debt is created when a creditor has agreed to lend a sum of assets to a debtor, the debtor has accepted the sum of assets and the repayment conditions, and the debt is evidenced by a note which specifies, among other things, the principal amount, interest rate, and the date or dates of repayment.

Do you dispute this definition of debt?

If you dispute the above definition of debt, please specify which portion or portions of it you dispute and why you dispute this portion or these portions of the above definition of debt.

1.8.2. In accordance with the generally accepted conventions and definitions, I believe that without borrowing and lending, there is no student loan debt, and student loan borrowing and lending must be documented by using generally accepted requirements.

Do you dispute the validity of the above statements labeled 1.8.2.?

2.1. I attended college several decades ago. You sent me copies of Notice of Loan Guarantee and Disclosure Statement documents that were recently created by a guaranty agency. This guaranty agency creates documents that imply borrowing and lending, even though the agency does not have any documents showing that in reality borrowing and lending took place.

Later you found it regretful that the guaranty agency had made an error by creating such documents, listing Bank of America as a lender, and stated that these documents do not indicate that I have any outstanding student loan obligations to either Bank of America or to Fleet National Bank.

When documents, such as Notice of Loan Guarantee and Disclosure Statement, are created without existence of signed documents that prove that borrowing and lending have taken place, the process is equivalent to forgery.

2.1.1. Do you dispute, that these Notice of Loan Guarantee and Disclosure Statement documents that you sent me are not based on the actual loan contracts that I have signed in the past?

2.1.2. If you do claim, that the Notice of Loan Guarantee and Disclosure Statement documents that you sent me are based on the actual loan contracts that I have signed in the past, please send me copies of these loan contracts.

2.1.3. If you do not claim that these Notice of Loan Guarantee and Disclosure Statement documents that you sent me are based on the actual loan contracts that I have signed in the past, please state so clearly and explicitly.

2.1.4. If there are no loan contracts that I have signed in the past, please state so clearly and explicitly.

2.2. You claim that in the past the guaranty agency made insurance payments of my behalf to Fleet National Bank. How do you know, that the guaranty agency did not make these payments in error? If the guaranty agency operates without having copies of the actual loan contracts, and if we do not even have two-sided original financial aid applications, what proof do you have, that the guaranty agency was supposed to make these payments?

2.3. You claim that in the past the guaranty agency made insurance payments of my behalf to Fleet National Bank. The only supporting documents are guaranty agency internal documents that simply list dates and dollar amounts and do not contain any references to insurance claim numbers or loan numbers.

If we do not have any documents that demonstrate that Fleet National Bank submitted one or more insurance claims in this particular case, and we do not have any documents that demonstrate that relevant insurance payments were made by the guaranty agency to Fleet National Bank, then how do you know that any such payments were actually made?

3.1. Are you suggesting, that if I as a student filled in loan applications, but did not receive the loans, I still owe the money that I applied for?

3.2. Are you suggesting that in accordance with the laws governing student loans and borrowing, a guaranty agency records serve as a legal substitute for a loan contract? If so, please specify which law and which specific part of that law states this.

3.3. Are you suggesting that in accordance with the laws governing student loans and borrowing, a guaranty agency records serve as a legal substitute for a proof of loan distribution to the borrower? If so, please specify which law and which specific part of that law states this.

3.4. Given that I received student loans in the past, which documents did I have to sign that would indicate that I actually received the loans that I applied for?

3.5. Which specific documents would I have had to sign that would indicate that the money that I borrowed was used to pay for tuition?

3.6. Which specific documents would I have had to sign that would indicate that the money was disbursed to me to cover any other expenses but the tuition?

3.7. Do you dispute, that we have records that show that the amount of financial aid allocated to me exceeds the cost of tuition that I had to pay?

3.8. Are you claiming that I received student loans for covering living expenses?

3.9. If you claim that I received money other than grants for covering the living expenses, then please show, which loans, or portions of the loans that I actually received were allocated for covering the living expenses.

3.10. If you claim that I received money other than grants for covering the living expenses, then please furnish documents that show how much money and when was dispersed to me as loans (and not as grants).

3.11. If you claim that I received money other than grants for covering the living expenses, then please furnish copies of the relevant original signed loan contracts that contain the loan amounts, interest rates agreed on, due dates, and information on when and at what frequencies any money has to be paid to the lender.

Sincerely,

Thomas Eklund

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