Tips for Avoiding Student Loan Scams

Charles Dever needed money for books and tuition when he was granted a small scholarship to a Major western university in 2001. He applied to MOHILA student loans of St. Louis Mo and was granted a $5,000 loan on the condition he would provide a cosigner for the loan that was credible. He went to his employer, a small business doing copier repair in Garden Grove, Ca and requested their help. Thomas X, the owner was glad to help Charlie and signed the papers. less than a year later Charlie dropped out of school and took a job in Kenya leaving everything including his obligation to repay the MOHILA loan in California. MOHILA knew of Charlie's new job and that he had dropped out of college but when the loan was 60 days late, they went after Tom X, not charlie. Thom's credit report that was unblemished was hit over a hundred points negative. His business could not get vendor credit for supplies and had to pay cash in many cases. When Thomas finally got in touch with Charlie, he gave MOHILA his location, address and a family contact in the USA. MOHILA continued to hit Thomas's credit report moving his score even lower. When Charlie finally contacted MOHILA and tried to start repaying the loan, MOHILA issued a new loan using the same cosigner signature as they initially had done and place the student back on the account. Three months later Charlie was in an accident and lost his job so he quit making payments on the new loan. MOHILA then created a second negative account and came after Thomas X again. This time Thomas had two negative reports on his credit--one for each of the loans obtained. Eventually, Charlie recovered from his accident and married. His wife paid off the MOHILA loan but a big problem remained. Not only the strained relations between Charlie and his former employer were difficult to overcome, the report remained on Thomas's credit report and MOHILA refused to take it off . they told Thomas X that the report would remain on the record at TRW, Experian and two others for the next seven years. MOHILA was fined by the Justice department in the past and has since lost their certification to grant student loans. the Treasury department now is in charge of the loans but Thomas's credit record remains negative.

Alexis Overman of CA 6:55PM November 15, 2010