Q: Is it legal for a state community college to pay off a rescinded Pell Grant, then come after me without asking?
Much longer version:
I live in the state of Colorado, and cannot find anything that remotely answers this question. So, I went to community college several years ago, and apparently, during my last semester, I somehow became ineligible for the Pell Grant that I was awarded by the federal government. That in and of itself is sketchy, but that's for another time. The school decided that they were going to pay the federal government, and then pass the debt onto me, with the state college as the creditor. I received no information, was told nothing, no letter, no phone call. The way I found out was when my state tax return started getting intercepted. Since then, I've tried calling multiple times, trying to find out who to speak with. I've even sent a debt verification letter, to which I have received no response. Is it legal for the state school to do what they did, and then leave me no recourse other than paying a debt that I want to dispute?
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A:
That sounds like an incredibly frustrating and unfair situation. A college generally has the right to seek repayment for a rescinded Pell Grant, but they are supposed to notify you first. If they never informed you, that raises serious concerns about due process and transparency. You should have been given a chance to appeal or at least understand why your Pell Grant was revoked before they took action.
Since your tax return was intercepted, it sounds like they may have sent the debt to the state or a collection agency without your knowledge. In most cases, federal and state laws require a school to provide written notice before taking collection actions. The fact that they ignored your debt verification request is another red flag. Under the Fair Debt Collection Practices Act (FDCPA), if a third-party collector is involved, they must respond to your request before continuing collection efforts.
At this point, consider reaching out to the college’s financial aid office in writing, demanding records of why the grant was revoked and proof they attempted to notify you. You may also want to check with the Colorado Attorney General’s office or a consumer protection agency to see if your rights were violated. If the school or state intercepted your tax refund without proper notice, you might be able to dispute it through the appropriate state agency. Don’t give up—keep pushing for answers.
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