(Huffington Post) In the nearly seven years he’d been paying off his student loans, Tom Cimochowski had never sent a late payment to Sallie Mae. But in February, one of the company’s debt collectors abruptly told his mother that his loan was in default and he had 30 days to pay up.

He was the victim of what federal regulators now call an “auto-default,” triggered by the death of his grandfather, who co-signed his loan, over a decade earlier.

Cimochowski’s mother, who’d been working two jobs since his father died when Cimochowski was in college, panicked because she didn’t have the money. His aunt offered to pay off the debt by taking out a second mortgage on her house. But Cimochowski didn’t understand why Simm Associates, a debt collector, and Sallie Mae suddenly wanted his family to pay $34,017.12 on a loan he’d paid on time every month — 80 of them — since May 2007.

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