Problem with Unreinsured Stafford Loan.

I have some (EX)Subsidized Stafford Loans and I recently learned that
my lender had their Lender ID number revoked in 2000. As near as I
can tell the lender(who also services the loans) had made some
regulatory violations and was required to reimburse the Dept. of ED
about $2700.

I was never informed that my lender had been removed from the FFELP
program until this last summer. I do remember the original loan
officer making me give her attendence verification from the
universities around 2000. I also remember that she had tried to get
me to sign new promissory notes for the loans sometime in 2000 also.
I wouldn't sign these new notes since the interest rates on them were
higher than what I knew they should be. I asked later about the loans
being rewritten and she said that it no longer needed to be done.
This original loan officer was fired for questionable practices that
boardered on embezzlement. I think her incompetence lost the credit
union's LID and she is responsible for most of the mess that things
are in now.

My problem is that I think that the (totally incompetent) lender has
never been properly servicing these loans. I think they have been
charging me 8.25% and 8.92% on these loans the entire time rather than
adjusting the interest rates. I also think that they were charging me
interest on these loans while I had in-school deferments, even though
the loans were originally SUBSIDISED Stafford loans.

Its interesting since the 8.92% interest rate exceeds the legal limit
that was stated in the paperwork that came with the Promissory note.
All the statements about the account that I recieved in the past only
showed the principle loan amounts, the finance charges were not
disclosed to me until earlier this year. When I saw the totals with
the finance charges I knew that something had to be wrong. It looked
like they had charged more than 8% interest the entire time since the
loans had been made including the periods when I was attending school.

I did contact the Dept of ED. (Western Region Financial Partners) to
try to find the exact reson that the LID had been revoked. I was
given the interest rates that should have been charged each year and I
was told that all the terms of the Promissory note were in effect and
that interest should not have accrued during the periods of deferment.

I contacted the lender by certified mail to formally request
information about the loans. I recieved back copies of the prom.
notes. and a copy of the guarantee approval. I did not get the
payment history that I requested, they make it sound like ALL detailed
records of charges and payments NO LONGER EXIST.

I contacted the Dept. of ED. Ombudsman today and I was told that they
could not help me AT ALL. The loans are no longer student loans and
the Department of ED can't make any inquiry or assist me in any way.

I was wondering where it is possible to get any assistance with the
matter. I especially want to know exactly how much interest was
charged on the loans and when it was charged. If there is a
discrepency about the fincance charges where can I get it resolved.

I was also wondering if there is any way of getting this loan included
with my other Federal loans for a direct consolidation loan.