Get Out of Debt Guy

I Owe the University and NCO is Trying to Collect It

Posted June 21, 2013

WRAL Reader Question

Dear Steve,

I attended a university for a few weeks in the fall of 2010, but had to withdraw due to some family hardships.

I had received Federal Financial Aid to help pay for the semester, but needed to take out a loan for the remaining costs. After withdrawing, I began immediately paying off the debt I owed for the student loan (which has been paid off now for a few months).

However, I just received a letter from NCO (in June of 2013) saying I owe nearly $2,800 for unpaid tuition in 2010. I called the university to figure out where this mysterious amount came from, and they said that due to my early withdrawal, some of my financial aid was rescinded, and thus this was my remaining balance on the tuition.

The university has been sending me bills every 3 months since November of 2010, but I have not received any of them (otherwise I would have made some arrangement for monthly payments from the start). So this whole situation has just been brought to my a ttention for the first time.

My question is what are my options? The letter from NCO requests the entire amount in full, which I am absolutely unable to pay. But from what I've read regarding NCO, contacting them will just lead to perpetual harassment.

Should I contact the university to try and arrange a monthly payment plan that I can afford, or do I have to go through NCO?

I've also read that NCO may accept monthly installments, but that this doesn't protect me from possible litigation. I don't necessarily want to pay this bill, or think that it is justified being that it just now came to my attention, but I would also like to avoid any future possibility of litigation as that appears to be the most costly alternative.


Click here to get my free my weekday email newsletter with the latest tips and advice on how to beat debt and do better financially. Subscribe now.


Dear Corey,

Can NCO be a pain in the butt? Yes. But they can also be a non-issue as well if you can work out a suitable payment plan. NCO is a major collection agency. I'm going to assume they have been hired as agents of the university to collect this money.

You can certainly contact the university to make repayment arrangements. Nothing prevents you from doing that. But now that they've sent it to an outside collection agency, don't be surprised if the university directs you back to NCO. Their agreement with NCO most likely says NCO will get the commission on the debt even if you pay the university directly.

It's not the fact the debt is with NCO that creates a potential risk of being sued. It's because the debt is delinquent that the risk exists. But that's a risk that's existed for the past three or so years anyway.

My advice would be to not panic, take a deep breath, call NCO and workout a monthly payment plan you can afford with your other bills and amount you must continue to save for your emergency fund. When you do negotiate a payment arrangement, get it in writing and make sure you make the payments early each month and don't miss any.

It's not the fault of the university you withdrew early or that your mail went uncollected for whatever reason. It's also not the fault of NCO the university turned to an outside collection agency to collect the money. There is just no reason to waste emotional energy trying to find a bad guy here or worry. It just is what it is.

And one more little thing, if you don't want NCO to find out your cell phone number, don't call them from it. People complain frequently about collectors calling them on their mobile phones but the collector easily captures the number when you call in on a toll-free number.

I predict everything will work out just fine. The good news is it looks like you've been making good progress in dealing with your debts.


Steve Rhode
WRAL Get Out of Debt Guy

If you have a credit or debt question you'd like to ask about, how to get out of debt, just click here and ask away.

If you'd like to stay posted on all the latest get out of debt news and scam alerts, subscribe to my free newsletter.

I'd love to meet you at the next local Raleigh meeting of the Get Out of Debt Guy Support Group. Everyone is welcome.


Please with your account to comment on this story. You also will need a Facebook account to comment.

Oldest First
View all

About this Blog:

Steve Rhode has had careers in opthalmology, real estate and as the head of a nonprofit debt counseling firm. On his blog, he offers hard-won, free advice about getting out of debt, consolidation and making the right choices as you manage your money.