Balance Disputes

A Federal student loan or grant obligation, like any other financial obligation, accrues interest over time as it remains unpaid. In addition, because Federal law holds the defaulter liable for collection costs incurred to collect these debts, the amount needed to satisfy in full the financial liability on a defaulted student loan or grant obligation includes the amount incurred to collect the debt. For both reasons, unless sufficient payments have been made, the amount that you currently owe will be larger than the amount you borrowed or received as a grant.

You should also keep in mind that you may have taken out several loans, sometimes from different lenders and serviced by different parties. Thus, payments that you may remember making may have been credited toward a different loan than the loan(s) held by the Department.

What to Do:

If you have proof that you paid a specific loan or grant obligation, you must send a copy of the record of that payment to the Department or other party that is demanding that you now repay that obligation.

If you believe that one or more of the payments you have made toward your debt has not been duly credited, you must send proof to the party that holds the debt. The kind of proof you need to submit depends on how the payment was made; see below for more information.

If you sent payment via...

  • Personal check. Submit a copy, front and back, of the cancelled check.
  • Cashier's check, money order or Western Union payment. Submit a copy, front and back, of the cancelled payment instrument. You will have to obtain this from the bank or agency that issued the check or money order. A copy of your receipt is not sufficient.
  • Treasury Offset Program. Submit a copy of the notice from the U.S. Treasury's Financial Management Service (FMS), from the Internal Revenue Service, or State Department of Taxation notifying you that your federal and/or state tax refund and/or other payment was offset. If you do not have this notice, you may obtain a copy by calling FMS at 1-800-304-3107.
  • Credit Card. Submit a copy of the credit card's billing statement that shows the transaction in question.

Be sure to include a cover letter with any proof you submit that includes your name and social security number.

Check a recent demand letter or bill for this loan; if the address to which you are requested to send payment is the National Payment Center in Atlanta, GA, you should submit your proof to:

U.S. Department of Education
P.O. Box 5609
Greenville, TX 75403-5609