Lost CSL from 1994

   Okay so I am going to attempt to make this a brief list of the situation. Way back when I was in a short 'intense' program through a Private Institution that has long since folded. I payed back the all the money I thought I owed. In 2003 when I filed my income tax return I received a letter with my return indicating that there was a small overpayment and interest charge that was outstanding and the amount had been claimed by the CRA. The amount was for around $200 and the amount was taken from my Tax Refund and the remaining balance of my refund was issued to me.

   At that point in a panic that there could be more "error's" floating around out there some where I did what seemed the logical thing. I immediately pulled my credit reports and phoned the holder of my only credit card to see if they had a record of any reports that may have affected my interest rate when I signed up for the card. After a few tense weeks I received both my credit reports and correspondence from my CC Company. My reports were clean and the credit company found nothing on my file either (they even lowered my interest rate a few percent).

   Now time has moved forward too 2012. I have been unemployed for an extended period of time and after exhausting myself in an attempt to find something/anything to avoid ending up living in a box some where I made the decision that returning to school to upgrade and obtain new skills is my best (possibly only) option.

   As I am not in any position to pay for my return to school on my own and a student loan was my only possible option. After getting all the gears turning I received a letter indicating that there was a restriction on my file from CSL? A quick investigation turned up the unpaid portion of a Federal Student Loan from 1994. With out acknowledging anything I was able to get a simple statement of account. I found this forum well I was waiting for that statement to arrive and quickly discovered that this pure silliness is common place.

   So now I have the statement in hand and as one can quickly figure after the length of time that has passed the interest on the loan has surpassed the principle of the loan (by almost 30% and counting I should add). I did the research and read through every relevant posting here I could find. I know that in a way I have unintentionally ended up in a good spot as the loan not appearing any where on my credit shows that it is barred. However that does nothing to assist me in my current quest to return to school.

    The various information that I have found shows that between interest and debt relief programs I could have easily had this taken care of a long time ago. The principal balance of the CSL is only $7000 (well just under) which considering the amount of time that has passed even if I had gotten forgiveness on the principal that would have completely wiped it out.

    Seeing as I am in absolutely no position to even consider doing anything about this financially at the moment and possibly for the foreseeable future now as I am now back to the same things that have not been working for me in recent years. I am still interested in pursuing my new academic goals. But if I could have afforded that on my own none of this would have ever even come to light.

    So what I need to figure out is can I even do anything about this? The silly amount of interest that has accumulated combined with the principal is going to continue growing. I can not ask for "loan forgiveness" until I have exhausted all of my "interest relief" options and as one would figure I am not entitled to "interest relief" so long as the loan remains in default. I see from some simple reading that I can do on my own I can 'rehabilitate' my loan by paying the outstanding interest in full (almost 9K) and making a payment equal to 2 months of normal payment. Which seems like a beyond silly option.

    Alternatively is even considering this a poor financial choice? If I make the mistake of trying to deal with this, do I run the risk of opening a can of worms that will just haunt me for many years to come? With the debt already being apparently under barred status will any attempt at a remedy remove that status? I am not looking to skirt my obligation or any other such thing. I honestly thought that I was long since free and clear from all of this. But paying more then double what I should have initially had to pay is simply not possible at the moment, and that would bother me on principal even if I could. That said I also do not need to add any more stress to my situation at the moment.

   Do I count my 'blessings' and just let sleeping dogs lye... Can I try to resolve the issue with out placing myself in the path of an ugly train of nastiness? If there is some other resources I could reference for more information that any one could point me too I will be greatly appreciative. I welcome any and all advice on the situation. I will be monitoring this post closely and will make every attempt to respond as quickly and thoroughly as possible to any questions for more information or more details of the situation as described.

   Thank You,