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I would dispute, based on these facts. I would also consider filing a civil suit against the school for defamation, which clearly has damaged your finances (I suspect you have a damaged credit rating).
First, it would be inordinately helpful if you had documentary proof of your statements. For instance: did you print the error pages that resulted when you sought to withdraw in Jan.? Whe you spoke to the Registrar's office, did you follow it up with a confirming letter, mailed certified return receipt requested, as to your understanding that your withdrawal notice was received? I would also get a copy of the phone records, confirming that you made this phone call, although that will not confirm the substance of the call, it will at least show a call was made frm you to Reg., helping in proving the truth of your claim.
Look at you DOR letter and look for any contact number to dispute the bill. Let them know that you did not get a bill, did not take the class, had withdrawn, etc. It irks me greatly that schools get special privileges to garnish your refunds without even having to get a judgment or otherwise prove you were in default! No other creditors receive same.
Remember in the future to ALWAYs follow up everything in writing, mailed certified r.r.r. People will lie as soon as they'll smile at you when they want your money.
I would write to the school, professionally but firmly, reiterating the above, the lack of bill, the fact that you can not be delinquent on a bill you were never charged, etc. and that if they don't rectify their mistake, you will have no choice but to seek redress for defamation via the courts. Also, check your credit report - see if they defamed you on there. If so, read the FCRA and and indicate in your letter that they have violated the federal act as well.
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