NORTH BRANCH, NY — All Elinor D’Andrea, 78, wanted to know was how much she owed on her loan. 

But the answer to that revealed the troubling side of loans—even federal ones—when fees and interest pile on and it can look impossible to ever pay off the money owed. 

After numerous attempts to learn more, she called the office of U.S. Rep. Marc Molinaro for help.

What happened

Elinor and her husband Louis lived in Livingston Manor for years. They eventually moved and rented out the old space, 16 Meadow St.

In 2006, floodwaters tore through Manor. One girl died. And the D’Andreas’ property—among others—was ruined.

The Federal Emergency Management Agency (FEMA) stepped in.

FEMA offers low-interest loans to disaster victims. While loans made through the Individuals and Families program do not have to be repaid, per the FEMA website, loans through the Small Business Administration (SBA) do. 

The D’Andreas had an SBA loan.

The loan, according to documents shared with the River Reporter, was originally for $53,100, issued in August 2006. The interest rate was four percent per year, and the monthly payment was $259. The payment was to automatically come out of Louis’ Social Security.

Elinor’s name was on the loan, so when Louis passed away in 2013, she inherited it. 

“It was my loan too,” she said. “I’m more than willing to pay.”

But she wanted to know how much was owed. 

As of 2015, the balance stood at $17,811.90 according to information secured by Rep. Marc Molinaro’s office and shared by Elinor with the River Reporter.

The congressman’s staff was able to help Elinor get the current balance information she wanted. 

In 2023, that balance stood at $41,459.72.

The Treasury Department later provided different numbers in a phone call to Elinor; see below.

Story of a loan

The loan became delinquent between 2013—after Louis died—and 2015, when the Small Business Administration referred it to Fiscal Services’ collection system. Fiscal Services is part of the Department of the Treasury.

Elinor suspects that the debt became delinquent because there was a problem transferring the Social Security deductions from her husband to her. 

She emailed on August 24 to alert Molinaro’s office and the River Reporter that a representative from the Department of the Treasury had just called. The call was meant to give the correct numbers.

According to the phone call, the correct amount owed in 2015 was $37,501.88 “and now it is $46,000 and change,” Elinor wrote.

There was an addition of 32 percent of the loan, the representative said. Whether that was interest or a combination of fees and penalties was unclear.

The Department of the Treasury did not respond to a request for clarification.

Why did the debt expand?

Fiscal Services, wrote an unnamed liaison contacted by Molinaro’s office in an email, “is required to recover the cost of the delinquent debt collection program by charging fees to the creditor agencies.” 

Those agencies have administrative costs on top of interest and penalties. 

All that is passed to the debtor.

His office was happy to help, Molinaro said. “Natural disasters are devastating on their own, let alone with the added challenge of getting stonewalled by government agencies when trying to access relief. My team is here and ready to help constituents navigate the federal bureaucracy and gain access to critical recovery resources.”

What can be done?

Fiscal Service, the liaison wrote, “cannot waive or forgive a debt referred by a federal or state agency.”

The liaison recommended that Elinor file a hardship claim, which would then be reviewed.

Elinor is considering it, and Molinaro’s office continues to work with her, but mostly she just sounds tired and angry.

She “can’t sleep with the thought that $305 is taken out of my Social Security monthly to support a government agency,” she wrote, “ensuring I will never be able to fulfill the payment of my debt.”

Liam Mayo contributed reporting to this story.