Open Question: School kept loan money I paid interest and fees on, and wants to send it back to bank 6 mos later…?
I took out a school loan, and dropped a class. After the school I am attending took their tuition and fees, they disbursed the remainder to me. However, they kept the money that would have been used to cover the dropped course, and told me that it would be credited towards the following semester.
My problem is this. I recently withdrew from the school. And the school told me that they would have refund me the excess to me. I still have the email that states this.
Well, it turns out that they will be sending it back to the bank. I paid a hefty origination fee based on the amount that I took out, and have been paying interest on it for the past months, while they held it. I am assuming they were collecting interest while I was paying it. I know “normal” school send the money back to the bank immediately, or it is given to the student.
What can I do, if anything? I have had other problems with the school and this is the one that broke the camels back. Do I have any protections? And can I sue them for the money owed that I accrued since they did not send the excess back to the bank immediately?
It would be one thing if it were a few hundred dollars, but we are talking thousands. Any advice?
Oh yeah, I am sure they are doing some shady things. None of my paperwork from them and the bank line up. The bank(a reputable one) says one thing, and they say that the bank is wrong and then do things differently than what agreed upon. Such as, they with hold my loans from me at least 2 months into the semester, saying it is “policy.” Again, while they hold this money, I am already paying on it.