Originally posted 03/12/2007:
I'm 33 years old, and three years ago, I decided I'd try to get re-trained for another job market, as mine was slowly going into the toilet.
I went to Western Culinary Institute and got accepted to get trained as a culinary chef. My initial loans from Sallie Mae were for $22,000 on a signature loan, and $4,000 for the federal aid loan. I was never told that there was a difference, that they couldn't be consolidated together, and that things were just beginning to get worse. In addition, there was no disclosure about how much the interest would be, either.
I graduated from WCI in November of 2005. I had been working part-time in a call center, and when I went to look for a job as a cook, found that I couldn't find anything that was more than $8 per hour - well below what I had been making before, and certainly not high enough to pay off my student loans. I'd been told by the recruiter that I would be able to find plenty of well-paying jobs in the area, but when it came time, there weren't any to be found that were more than fifty cents higher than minimum wage. In my exit interview, the loan officer at the school told me my payments would be $450/month. I laughed at her - I couldn't believe they'd be that high.
I decided to go full-time in the call center where I was, and attempt to put aside monies so that in 6 months, I could start paying them at least something. The pay was decent, and I thought I could do something with the money I made there. Six months later, I got my first bill and found out that the loan officer was wrong - it wasn't $450/month. Nope - it was $553/month! In addition, for each month I didn't pay, the percentage rate on my loan was going to be at 18.9% - but if I DID pay, the interest would only be 14%! This didn't include my federal loan, which was $165/month.
I couldn't pay $553/month - I couldn't even pay the $165/month for just the federal loan. I asked for a deferral so that I could have some time to figure it all out, and started searching on the internet for anything that I could find regarding my situation. I couldn't find anything other than the Federal Ombudsman's Page - which dealt strictly with federal loans - the government would not help me if it was a private loan, and Sallie Mae was free to charge whatever they wanted for the payments as it was ungoverned.
I did consolidate the federal loan and brought it down to $60/month. I had thought that, since they were under the same account numbers (absolutely NO difference whatsoever), the federal AND the private loan had been consolidated - I'd done everything on the internet. I know that I put the private loan into my request when I set everything up. They refused to consolidate the private loan, and stated I'd never asked - even though I know that I had. They then informed me that federal loans and private loans can't be consolidated at all - that they must remain separate - when I asked them why they had them under the same account number if they "had" to remain separate, they told me that they had a way of making sure that it was separate in the computer system.
After my first deferrment, I was called upwards of 8 times per day, was called a deadbeat and a liar, and told that I needed to pay "or else". I requested that they stop calling and hounding me, that it was illegal to do so. Sallie Mae's reps told me that they could do whatever they wanted, that they weren't bound by ANY federal law, and they could call as many times as they wanted.
I got another deferral and tried again to see if there was anything I could do to help myself - I attempted to move and consolidate my loan through other agencies, but was denied repeatedly. The reasons were that either I didn't make enough money to pay back the loan at their preferred rate, or that Sallie Mae wasn't releasing the information to them in a timely enough manner. After that, I sunk into a depression that I have yet to beat.
Sallie Mae took my money a day early when I set up a post-dated deferrment payment of $50 for their "processing" fee. I told them it was illegal and had cost me NSF fees at the bank - they told me they could take the money whenever they wanted, and that the date I'd given was a "suggestion", not something they had to follow.
I was told that I should "expect" such poor treatment from them, since I hadn't made even one payment, and since I was unresponsive to their calls. That I deserved it. That I was a horrible person.
When they called again on March 9th, I finally spoke with one person who worked with me a little. She was very nice and helped set up what they called a "forebearance partial payment" of $175/month for 5 months. The catch? Well, each payment would have a $10 processing fee added to it, and I'd have to pay $50 for the initial fee, AND I'd have to pay February and March together at the same time so that I'd get "caught up". Oh, and I'd continue to get late fees attached to those monthly payments since the remaining portion wasn't being paid, AND interest would continue to accrue at 18.9%.
I was terrified to do anything except say yes. I didn't want my loan to go into default, and felt that I had nowhere else to go. I couldn't seem to get out from under them at all, and couldn't see a way out of the mess that I'd inadvertantly created - all because I'd wanted to go a different direction at one point in my life.
Even after I said yes, faxed paperwork back and forth to agree with the partial payment, and had everything (I thought) agreed upon, I was STILL called two more times that day, and again two more times two days later!! I was again told that I should expect such treatment because I was "bad" and hadn't made payments to them, so I deserved it. The first person told me that the calls would stop after the initial $50 fee was taken. The NEXT person, who called two days later, said that no, they would only stop once the faxed paperwork was actually processed, which would take upwards of 72 hours.
I've called the Wm D. Ford loan company, and was told there was nothing they could do about the principle amount of the loan, since it was a private signature loan. I was given the phone number for the Federal Ombudsman, and was told there was nothing THEY could do either, since they only dealt with the federal portion of the loan - that Sallie Mae was indeed correct about stating they could charge whatever they wanted, at whatever interest rate they chose to.
I *WAS* told by the Federal Ombudsman that Sallie Mae HAS to follow the Fair Debt Collection Practices Act, regardless of whether they are a private corporation or not, and to start making a paper trail regarding everything they've sent me and everything they're doing to me. However, I cannot have the loan dismissed simply because of hardship - while the government looks on the loan as the same thing as a credit card, the LAW says that it's a student loan - and therefore I cannot file bankruptsy on it, either.
At this point, I'm fairly near hysterical because I don't know what else to do. I don't make enough money to pay the full amount, and with the percentage rate, the late fees and the processing fees, I'm looking at upwards of $90,000 before I see the final chapter of this - if I ever DO see the end of it. The stress is ruining my health, it's putting a strain on my relationship, and it's causing me to seriously think of suicide at times because I feel as though I have no other recourse. I'm crying as I type this because the situation seems to me, at this point, to be completely hopeless. I don't know what to do right now, and I'm feeling more and more like a failure because I PUT MYSELF IN THIS POSITION AND CANNOT SEEM TO FIND A WAY OUT OF IT.