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Zombie Student Loan Debt: How to Handle Old Bills You Thought You Paid

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Content was accurate at the time of publication.

Americ McCullagh was so desperate to rid herself of more than $40,000 in student loan debt that she used her home’s equity to do it.

“I got rid of most or all my [files] about my student loans,” said McCullagh, who went to school for six years to get an occupational therapy degree. She remembered thinking: “Why would I need it? It’s over.”

Eleven years later, however, McCullagh’s lender started sending her notices about outstanding dues on apparent zombie student loan debt. At first, she trashed these Sallie Mae envelopes without giving them much thought. But when the mail started piling up, she unsealed one to receive an unfortunate surprise.

Sallie Mae claimed she had paid off all her debt — except for about $150. After more than a decade of interest had accrued and capitalized, her zombie student loan debt approached $12,000.

Zombie debt: Receiving old student loan bills

Zombie student loan debt refers to unpaid loans that linger for years, adversely affecting your finances without you being aware of it. It could still be lurking because:

  • The loan was sold to another lender, and its account history was incomplete
  • It was borrowed in your name — but you’re a victim of identity theft
  • The debt’s statute of limitations was reset (in the case of private student loans), making it possible for creditors to renew collection attempts
  • The debt wasn’t included as a discharge during a bankruptcy proceeding

In McCullagh’s case, it took eight hours, spanning a dozen phone calls to Sallie Mae customer service.

“I called them up one Friday [when] I was off from work,” she said. “I was crying, and people were hanging up on me. … On the 12th phone call, I got this lady who took pity on me.”

They figured out that McCullagh’s zombie student loan debt wasn’t completely paid off because of a timing snafu. Her bank paid off her loans a few days after Sallie Mae had imposed that $150 of interest.

“Of course I would have paid it,” she said, “but I didn’t know because they never told me.”

How to handle ‘past due’ notices for zombie student loan debt

What can you do about haunting zombie student loan debt? Follow these steps.

Double-check that the zombie debt is, in fact, yours

If you’re like McCullagh, you might have tossed out all your student loan records once you became free of your college debt. Instead of helplessly rummaging through your closets, there are ways to find your transaction history online.

For federal loans: 

  • Visit the Federal Student Aid (FSA) website. You’ll be able to view not only your balance, but also your loan servicer. If the company contacting you doesn’t match, it could be a collection agency working on behalf of the servicer, or it could be a scam.
  • If you’re unable to find your loans via the FSA, contact your state’s higher education authority for assistance. You can find your state’s agency via the Department of Education.

For private loans: 

  • Contact your original lender.
  • Check your credit report, which should show your debt’s status. You can view your credit report for free once per year at (The three major credit bureaus have also made free weekly reports available through April 2021 because of the coronavirus pandemic-affected economy.)
  • You might also ask your bank for statements showing past loan payments.


If after checking these sources, you can’t confirm that the reported debt belongs to you:

  • Don’t make a payment — this could reset the statute of limitations.
  • Instead, contact the lender again to seek a detailed history of the debt.
  • Gather your old student loan bills and other paperwork, anything that proves the debt isn’t yours.
  • Dispute the debt with the credit bureaus to ensure it’s removed from your credit report and doesn’t affect your credit score.

Request proof of your outstanding debt

If the debt is in your name, but you’re not sure about the balance owed, it’s time to reach out. McCullagh remembered Sallie Mae as her lender, so she simply dialed its customer service line.

But if you received correspondence from a lender, servicer or collections agency that you don’t recognize, you might be unsure of your next steps to kill that zombie student loan debt.

First, you’ll want to send a response assuring the creditor that your debt has been repaid. In doing so, however, avoid sharing personal information in case you’re a target of student loan scammers.

You’re best off sending a debt validation letter: The Consumer Financial Protection Bureau offers a template letter for this very scenario.

In the letter, request the loan’s complete history, plus a written explanation for your outstanding balance. And, of course, keep the conversation in writing, so that you have a formal record. Only then can you be sure that your zombie student loan debt is legitimate.

Killing zombie student loan debt for good

McCullagh thought the Sallie Mae mail she received a decade after zeroing her debt contained advertisements, not something to unseal and study. Thankfully, however, she wised up to see why her lender kept contacting her.

If you’re in a similar situation, don’t make the mistake of ignoring past-due notices, even if you believe you’re no longer in the red. New bills for old loans should spring you into action.

If your zombie student loans have been repaid, you’ll want to prove it to keep the lender, servicer or collections agency off your back — and your debt out of collections.

If, like McCullagh, you unwittingly have a balance due on your loans, you’ll want to become aware of that fact as soon as possible — before it harms your financial situation. If Sallie Mae had reported McCullagh’s seemingly delinquent loan, for example, her credit report would have been severely dinged.

Because she called and explained her side of the story, Sallie Mae finally waived the outstanding balance on her zombie student loan debt.

You might think you’ve left your debt in the dust. But to secure your financial future, McCullagh recommended asking for a debt payoff letter — and keeping it safely stored.

“Looking back, I never got that letter or receipt,” she said. “That would have stopped all of the drama.”

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