Open Letter to the Default Resolution Group – Is the Current Department of Education Capable of Handling Disputes in an Unbiased Manner?

Does the U.S. Department of Education have the capability to handle student loan related disputes in an impartial manner? Based on my experience I have to say that I do not think so. The reasons, and the problems, are rooted in the ways the current Department of Education is being run. A student loan dispute is prejudged and categorized, and then the current or former student is pushed along the predetermined pathways. The process contains very little, if any, objectivity. This process can be effective only, if everything always fits into pre-determined categories. However, what if the categories do not cover wrongdoing from the part of Department of Education and its business partners?

Instead of starting with the conclusions, we should be looking at the relevant evidence and abide by the relevant laws and commonly accepted concepts that are used more widely than merely within the Department of Education. This is what I believe in, but this kind of thinking fits with the Department of Education’s student loan machinery only, when it serves the pre-determined interests of the Department of Education.

This is why I do not believe that the Department of Education has the capability to handle student loan related disputes in an impartial manner.

However, I will be happy to be proven wrong here. If progress can be made by my being wrong, I’m all for it.

Below is a copy of a letter that’s related to my struggle with the Department of Education. I received a letter from the Department of Education, asking me to contact the Default Resolution Group. So, I am responding to that letter.

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

  • - Default Resolution Group, U.S. Department of Education, USPS delivery confirmation EK635224668US
  • - The office of the Honorable Loretta Lynch, Attorney General, U.S. Department of Justice, USPS delivery confirmation EK453359706US

Default Resolution Group

U.S. Department of Education

P.O. Box 5609

Greenville, TX 75403-5609

Dear Sir or Madam,

In a letter dated 06/08/2015, Aaron Crabtree, Information Specialist with the Department of Education Ombudsman Group, asked me to contact the Default Resolution Group.

I have not contacted the Department of Education Office of the Inspector General, or the Ombudsman Group, or Default Resolution Group because based on my experience so far I do not expect any part of the Department of Education to have the capability needed for handling disputes in a completely impartial manner within a reasonable period of time. This is largely at the core of the problems that I am addressing below.

The way the Ombudsman Group contacted me exemplifies this problem. I was contacted as if I had defaulted federal student loans. However, the evidence that over 3.5 years long dispute has produced shows, that this is not the case.

Based on my previous experience I expect the Default Resolution Group, and the Ombudsman Group, and every other part of the Department of Education to handle this case by pre-categorizing and prejudging me. If the situation does not fit into one of the existing categories, the party that I am communicating with simply fades away, leaving me to work in involuntary servitude conditions on a case that is intended to benefit the Department of Education financially and its employees and business partners professionally. This is what has been going on for 3.5 years now.

However, to some degree I am prejudging here as well, and I will be happy to be wrong about the Default Resolution Group’s capability to handle student loan related disputes in an impartial manner. So, let’s proceed.

Please note, that I am forced to continue to work on this case for as long as the Department of Education has not issued a formal statement ending the unvalidated monetary demands. Therefore, in a parallel manner to communicating with you or any other part of the Department of Education, I will also continue to contact other institutions and people, for however long necessary. The list of institutions and individuals that I will need to contact regarding this case is for all practical purposes endless.

Further, in accordance with the previous correspondence, 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.

Further, please note that until this case is resolved, I need to keep records of the relevant correspondence. I am not able to record phone calls. Therefore, I can correspond in writing only, via regular mail.

Request for Help with Ending Usage of Involuntary Servitude

I am seeking help with ending a situation where I am being forced to work endlessly in involuntary servitude conditions.

The U.S. Department of Education has been demanding money from me for an alleged debt. Despite of my repeated requests, no validation has been offered, that any corresponding lending and borrowing transactions have actually taken place, and that I have ever received any of the alleged loans either directly or indirectly, as tuition support.

This case has been going on from December of 2011, remaining for over 3.5 years in the same debt validation status. No end in sight. The only progress that has been made, has been made because I have been working on this case.

Please note that I am not seeking any kind of debt relief. I am seeking relief from being forced to work endlessly and without compensation on a debt validation case that is intended to benefit the U.S. Department of Education financially and, under the circumstances, the U.S. Department of Education should handle completely impartially with its own resources, within a reasonable pre-determined period of time (for example, 3 months).

Does This Case Qualify as Involuntary Servitude?

This case is intended to benefit the U.S. Department of Education financially. Otherwise, this case would not exist.

There is no debt that the U.S. Department of Education is collecting money on. Instead, the information and the evidence that have been gathered overwhelmingly indicate that the U.S. Department of Education has been making monetary demands based on bad record keeping, which it tries to cover up. This relevant information and evidence have been gathered due to my work and efforts.

For over 3.5 years I have been forced to work on this U.S. Department of Education debt validation / bad record keeping cover-up case, without compensation, against my will. If I would not have worked on this case, I would be rendered into financial servitude, having to pay a debt that does not exist, and interest and penalties on top of nonexistent debt.

Thus, I have to work on this case, whether or not I want to do so, because the alternative is even worse.

Further, I do not have any security and safety in this case. Even though the Department of Education has not furnished requested validation that the alleged debt actually exists, based on their statements, they can force me to pay them, for example, through garnishing wages.

Based on the above, I conclude that I have been working, and continue to work, in involuntary servitude conditions.

For all practical purposes, in the U.S., other than courts, there is no independent institution that would handle such cases completely impartially and would also have the authority to advise the U.S. Department of Education, or to take corrective action, if wrongdoing by the U.S. Department of Education has occurred.

However, that does not mean that the U.S. Department of Education employees have the legal right to render individuals into involuntary servitude by using the special powers granted to them, as they have done in my case.

Request for Formal Statement Ending the Monetary Demands

I have requested that the Department of Education validates that (1) I received the alleged student loans and that the relevant debt exists, and (2) that the Department of Education holds relevant valid legally binding promissory note debt instruments, and (3) that the Department of Education is the legal owner of the relevant alleged debt.

Throughout the over 3.5 years long debt validation dispute, the Department of Education has failed in all three areas.

The Department of Education is not exempt from debt validation, and the Department of Education does not have the legal right to force a past student loan applicant to make payments on an unvalidated debt.

Accordingly, I request that the Department of Education ceases and desists making any further monetary demands and states in writing that the Department of Education will not under any circumstances take any actions and will not make any further demands regarding the specific previously claimed alleged debt, and will not authorize any individual, company, organization or institution to take any actions or to make any kinds of further demands regarding the specific previously claimed alleged debt.

Foundation for the Requests

In accordance with case law, (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 when the alleged loans were made.

Accordingly, when the Department of Education becomes the holder of the promissory notes, it is not the original lender, nor the school involved, but the Department of Education that has to answer for actions related to originating and collecting the debt, as well as other potentially fraudulent aspects of an individual student loan cases.

In this case, legally binding promissory notes and debt either exist, or they do not exist.

If the Department of Education maintains a claim that it is the legal owner of legally binding promissory notes, I expect the Department of Education to furnish copies of the original legally binding promissory notes that are in accordance with Uniform Commercial Code (UCC) requirements for legally binding promissory notes. In that case, the Department of Education is also in the shoes of the lender. As lender, I expect the Department of Education to furnish proof, that the lending and borrowing transactions actually occurred and the corresponding debt obligations actually exist.

If the legally binding promissory notes do not exist, and there is no conclusive proof that the lending and borrowing transactions occurred, I expect the Department of Education to issue a statement clearly stating that it will end the unvalidated monetary demands.

Until then, I have to contact an ever increasing number of institutions and individuals, and during the next election cycle attempt to get national attention to the Department of Education’s operating practices, hoping that the next administration will follow more prudent policies. Thus, we have an everlasting dispute. Whom does that benefit?

I do believe, that it is in everybody’s interest to find a solution to this dispute.

Compensation

As is stated above, for over 3.5. years I have been forced to work on Department of Education debt validation / bad record keeping cover-up case, without compensation, against my will. I have been invoicing the Department of Education along the way. Enclosed is the latest invoice.

Please note, that the invoices that I have submitted to the Department of Education so far list only compensation for the amount of time that has been robbed from me, because I have been forced to work on the Department of Education debt validation / bad record keeping cover-up case. These invoices do not list compensation for any other type of harm caused and for the opportunities that I have had to forgo because I have had to invest my time into working on this case.

I will relinquish requests for compensation that is listed in the enclosed invoice, if the Department of Education in return officially declares that it will relinquish usage of the following operating practices:

  • Through usage of threats forcing a former student to work on a debt validation case that is intended to benefit the Department of Education financially.
  • Making monetary demands without having, and on request furnishing, validating proof that the corresponding lending and borrowing transactions have actually occurred.
  • Stating, that the Department of Education has in its possession original legally binding promissory notes, while in reality such documents do not exist.
  • Generating financial documents after a student graduates from college, claiming that these are copies of the original financial documents that were generated while the student attended college or university.
  • Entering records into a former student’s credit history after the student graduates from college or university without having, and on request furnishing, conclusive proof that the former student did receive the alleged money as loans either directly, or indirectly, as tuition support.
  • It is especially devious to enter records of unvalidated and non-existent loans into a former student’s credit history after the student graduates from college in response to student’s debt validation requests and while the former student is requesting debt validation, as was done in my case.

All of the above applies to my case. Thus, my case provides proof that the Department of Education does indeed use these operating practices. (As a relevant note I will add, that publishing this case on the Internet both provides information on the areas addressed here, and helps to increase awareness of these operating practices and of the importance of abolishing them.)

If we can put in place assurances, that nobody else has to go through the same ordeal in similar circumstances, we have made progress in ways that can actually help people. That would provide meaning to my several years long struggle.

Further, if we can resolve this dispute so, that the Department of Education agrees to relinquish usage of the operating practices listed above, there is an additional very important benefit to this. We can emphasize, that it is possible to resolve even complex disputes in a non-violent manner, without expensive court cases that financially are out of reach for most people.

I believe that we need more such examples from different areas of life, showing also clear pathways for non-violent and effective dispute resolution. Providing such examples is a process, not an event, and every little bit can help.

If the Department of Education refuses to relinquish usage of the operating practices listed above, naturally, a question arises: why? Why would the Department of Education still need to continue to operate in this manner?

Case Background

I will explain below the current situation further.

I came to the U.S. in 1989 as a political refugee from the Soviet Union. I attended state owned Rhode Island College between 1990 and 1996 as an honors student. According to publicly accessible sources the in-state cost of tuition to attend the state owned Rhode Island College from 1990 to 1996 ranged from $1,703 to $2,838 a year.

I received Rhode Island College Honors Scholarship, Pell Grant and work-study financial aid that covered the cost of my attending Rhode Island College.

As far as I know, as a student I did not qualify for bank loans because I was in the U.S. on a temporary visa when I first attended college, and then on Green Card until graduation, without any credit history, co-signer or collateral. Further, initially I did not have any work experience and work history either. While I was a student my income was extremely low and did not support borrowing from a bank tens of thousands of dollars.

However, the Department of Education insists that I also borrowed $46,354.00 as principal from Fleet National Bank, to which the Department of Education later added interest and fees, so that at this point the Department of Education is demanding from me over $135,000.00.

The amount of money that the Department of Education claims that I borrowed is several times higher than I possibly could have received, even if I would have borrowed money. As a student, I did not live on campus. The Department of Education is unable to explain, how the $46,354.00 supposedly was used or where did it go.

I have been requesting debt validation from the Department of Education from December of 2011, when I received a student loan collection letter.

None of the demands have been validated. There is no validation that I ever received any of the alleged loans either directly, or indirectly, as tuition support. Similarly, there is no validation that any legally binding documents exist.

The over three years long dispute with the Department of Education has so far resulted in identifying the following:

  • Initially, the Department of Education insisted that a breach of contract had occurred. However, a legally enforceable contract must be consummated by consideration which, in this case, would be my receiving student loans as the promisor from Fleet National Bank as the promisee. There is no contract that involves my receipt of student loans as the promisor from Fleet National Bank as the promisee. Thus, there is no contract involved here that has been breached.
  • As a student, I signed and submitted financial aid applications and received financial aid based on these applications. These financial aid applications do contain information on my receipt of financial aid other than loans.
  • Financial aid applications and legally binding promissory notes are different documents. However, the Department of Education is trying to serve these financial aid applications as legally binding promissory notes, even though these financial aid applications (a) are not in accordance with the Uniform Commercial Code (UCC) requirements for legally binding promissory notes, (b) do not contain the information that legally binding promissory notes must contain, and (c) do not contain information on my receipt of the alleged bank loans.
  • Thus, there are no legally binding promissory note debt instruments that I signed as a student at Rhode Island College that involved me as the promisor and Fleet National Bank as the promisee.
  • Accordingly, the Department of Education does not hold any valid legally binding promissory note debt instruments that involve me as the promisor and Fleet National Bank as the promisee.
  • No documents have been furnished that demonstrate existence of debt and debt obligations. Accordingly, the Department of Education does not own a nonexistent debt that involves me as the promisor and Fleet National Bank as the promisee.

The Department of Education representative does not state that I received student loans and that I must pay the Department of Education because I received student loans. Instead, the Department of Education representative states that I must pay them because I signed the financial aid applications, which the Department of Education also calls promissory notes. However, financial aid applications and promissory notes are different documents.

These less than a page long financial aid applications contain only one place for signature, and that is where I signed them.

Further, there are requirements set for legally binding promissory notes, and the financial aid applications that I signed do not qualify as legally binding promissory notes.

In addition, the bottom halves of the same less than a page long financial aid applications contain information that indicates, that the applications were processed for financial aid other than loans – and I did receive such financial aid.

When I started the debt validation process, I did not know any of this. It has taken me a lot of work and time to find out the relevant details and information. This entire process has been very difficult, causing me a lot of mental suffering.

Based on my case I have to conclude that the Department of Education employees purposefully want to maintain their stronghold, hoping to eventually force me into paying them anyway, because they have a never ending ability to make monetary demands that they do not have to actually validate. Thus, they knowingly cause endless suffering.

There is nothing accidental about this. Based on the available evidence, in this case the Department of Education employees cause this suffering purposefully and deliberately. This must be stopped.

Monetary Demands Made Based on Fraudulent Claims

The Department of Education claimed, that it has my original promissory notes in its possession. Later it turned out that such documents simply do not exist.

Similarly, the Department of Education has stated that in 1997 Fleet Bank, a private lender, submitted insurance claims to a guaranty agency, and the guaranty agency made monetary payments to Fleet Bank.

However, the only records that the Department of Education is able to furnish as proof of these transactions are internal documents – for all practical purposes scratch papers – that any employee could have filled in at any point in time. If these transactions did actually occur, then why aren’t there any documents showing that Fleet Bank submitted claims, and that guaranty agency made payments to Fleet Bank? If these transactions actually took place, then why did the guaranty agency chose to retain for years irrelevant scratch paper, instead of records of actual transactions?

Extortionist Techniques Used by the Department of Education

The Department of Education demands that I must prove that I did not receive bank loans – even though the demands have not been validated. Thus, I am asked to prove that I did not receive nonexistent loans.

Because of the special powers granted to the Department of Education, the Department of Education can go on and on with these circular demands.

The Department of Education operates under a business model, where it uses the powers granted to this institution and keeps making unvalidated demands and pressuring the former student to make payments on unvalidated debt, even though, based on the available information, the debt does not exist.

Fraudulent Computer Record Generating

I graduated from college in 1996. In 2012 the Department of Education sent me what they claimed to be copies of my original Notice of Loan Guarantee and Disclosure Statements. However, it turned out that these statements were generated in 2012 by entering my current information into a computer system in 2012 – more than 15 years after I graduated from college.

Credit Report Entries Made For the Purpose of Bullying

In June of 2014 I found out that the Department of Education had reported the unvalidated, non-existent student loans to Experian credit bureau, as if these were actual loans in collection.

To put things into perspective, I stared requesting debt validation in December of 2011 after I had received a student loan collection letter. At the time of my writing this letter, this debt validation dispute is ongoing, with no end in sight. Department of Education’s reporting of the fictional loans to a credit bureau started in 06/2012 and ended in 08/2013.

At the time when the Department of Education chose to report these fictional records as actual loans to a credit bureau, it must have been clear to the Department of Education, that there are no documents showing that I ever received any of these alleged loans either directly or indirectly, as tuition support. Similarly, it must have been clear to the Department of Education, that there are no actual promissory notes or contracts involved here.

Because the loans do not exist, the Department of Education is not collecting any monthly revenue on them either.

Thus, I have to conclude that the reason that the Department of Education chose to report these fictional records as actual loans to a credit bureau was bullying. People at the Department of Education wanted to show how powerful they are and what I can do to me.

These fraudulently reported records prevented me from obtaining credit, from renting an apartment, and from seeking employment. Thus, these actions caused me harm.

On 06/23/14 I contacted the Department of Education and requested removal of these records. The Department of Education responded, refusing to remove the fraudulently reported records.

On 03/16/15 I contacted Experian North America credit bureau, which removed these records from my credit report.

Refusal to Honor Freedom of Information Act (FOIA) Request

Following the instructions that I received from Naomi Randolph, Special Assistant, Operations Services, Federal Student Aid, I submitted a FOIA request to the Department of Education first on 07/15/13. I received a response stating that I must sign a specific statement. I did so. Then I received yet another request to sign yet another statement, where I had to declare under penalty of perjury that the information that I have provided about this case is true to the best of my knowledge. I did sign that specific statement as well.

After my third FOIA request, I received the United States Department of Education FOIA REQUEST ACKNOWLEDGEMENT, which states that the date the request was received was August 20, 2013. The FOIA tracking number of my request is 13-00074-PA.

The Department of Education has not explained what legal right did the Department of Education have to refuse to process my FOIA request until I had singed a statement under penalty of perjury.

I did receive a response to my FOIA request. The response, dated 03/11/14, states that my FOIA request “was forwarded to the appropriate office within the Department to search for documents that may be responsive to my request,” and the Office of Business Operations in FSA was “unable to locate any records responsive to my request.”

However, previously the Department of Education has stated that it has information on my receipt of grants. Thus, the FOIA response is in conflict with the information that the Department of Education has previously provided.

Accordingly, on 05/19/14 I contacted Office of Government Information Services (OGIS), National Archives and Records Administration. I received a response, dated 12/12/14, and requested clarification in a letter dated 02/09/15.

Consequently I also received a response form the Department of Education FOIA Unit, dated 03/09/2014, even though the letter was actually sent to me in 2015. In that letter the Department of Education FOIA Unit representative claimed, that they sent me 386 pages of information that is responsive to my FOIA request. In reality, 84% or 324 pages out of the total of 386 pages of the material that I received, were copies of my letters to the U.S. Department of Education, requesting validation of the alleged debt. Further, this material contained duplicated copies of my letters – apparently, in an attempt to generate more volume of the “legitimate support material,” the U.S. Department of Education FOIA Unit sent me 2 copies of my debt validation request letters to the Department of Education.

The rest of the material was copies of computer screen snapshots and other internal records that apparently were generated after I graduated from college. I did not receive any of the requested information that would demonstrate, that the alleged lending and borrowing transactions actually took place, and that I received any of the alleged loans either directly or indirectly, as tuition support.

On 05/04/2015 I responded, requesting information on work-study financial aid. For some reason, the Department of Education FOIA Unit has not sent me information in the latter area.

At the time of writing this letter to you, I am waiting for the relevant information from the Department of Education FOIA Unit.

So, the case continues. However, as I stated above, I do believe that it is in everybody’s interest to find a solution to this dispute.

Thomas Eklund

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