Statutes of limitations are laws passed by legislative bodies in common law systems to set the maximum time after an event within which legal proceedings may be initiated.
The HEA’s elimination of the statute of limitations for student loan collections applies to collection by government agencies and their agents. The statute by its own terms applies only to institutions collecting federal grant or work assistance refunds; guaranty agencies that have agreements with the Department and are collecting federal loans; institutions that have agreements with the Department and are collecting government loans; and the Secretary of Education, Attorney General, or administrative head of another federal agency to collect government grants and loans.
The elimination of the statute of limitations for federal loans does not apply to state agencies or state loans. However, state entities suing to collect student loans may also be able to avoid statutes of limitations if state law or state constitutions provide such protection. A state entity may not be able to escape time limits if it is merely administering a private loan fund rather than collecting a public debt.
The HEA elimination of the statute of limitations does not apply to collection of private student loans. Instead, state law will determine the applicable limitations period. In a surprising number of cases, though, determining the applicable limitations period can be remarkably complex.