Mrs. Brown said a granddaughter forged her signature on a loan application.
Her daughter, Clanzerria Brown, and Lynn Drysdale, a legal-aid lawyer in Jacksonville, Fla., spent the next five years disputing the debt with the owner of the loan, United Student Aid Funds, a student-loan guarantor that also was acting as one of the Education Department's 21 debt collectors.
Ms. Drysdale corresponded numerous times with USA Funds and two other debt-collection companies it hired. One letter from USA Funds warned that unless documents were received "within 30 days from the date this letter was generated . . . your case will be closed." The letter was undated.
Another required Annie Brown to refer to an attached document, when there was no attachment.
In 2007, USA Funds denied Annie Brown's claim, citing a recently passed federal rule requiring people claiming identity theft on student loans to obtain a criminal court verdict of the crime. But a statute of limitations for bringing a case had passed, and Annie Brown was alleging forgery, not identity theft.
Robert Murray, a spokesman for USA Funds, agrees Annie Brown's signature was forged. "It [the loan] should never have been made," he says. Still, USA Funds must rigorously defend claims. "There are borrowers who want to get out of a legitimate debt," he says. "By the same token, we want to work with individuals who have a legitimate issue."
Ms. Drysdale finally sought to obtain a disability waiver, which took more than a year and was achieved only with help from the Social Security's omsbudsman.
In August 2009, the Education Department agreed that Annie Brown is permanently disabled and discharged her obligation to repay the loan she never took out. The Treasury returned her withheld benefits in December.
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