I had an interview with Ben Elgin of "BusinessWeek" magazine Sunday evening. We met at a restaurant near my home (he was on his way through to Seattle to meet up with collegues) and we went through all the paperwork.
Interestingly, he'd gotten some feedback from Sallie Mae already about their practices. Supposedly, the PR person he spoke with has stated they're putting a cap on percentage rates for private loans given starting this year. However, nothing has been done for those of us with high interest rates due to being granted the loan prior.
Some of the more interesting points of the interview:
- My loan has an 18.5% interest rate when I _DON'T_ pay for it, and drops to 13.9% when I do... Now, this interest rate went into effect as of the first day of my loan, and had accrued interest from day one at 18.5% - even while I was in school. Apparently that was not something that Ben expected, as he told me most federal student loans have a zero % rate while the student is going to school, and then goes up from there.
- Sallie Mae failed to pay for my school on time twice. No reason was given as to why, and there is no information regarding whether a late fee was tacked onto the payment - and if so, if it was then passed on to me.
- Sallie Mae originally granted me a $22,000 private loan when I had an income of less than $200/week (unemployment and a part-time job combined). When I requested a consolidation of the private loan, and my income was $1000/month after taxes, I was denied because I didn't make enough money... WTF?
- My private loan was originally granted through Stillwater National Bank, a subsidiary of Sallie Mae. I received a letter about 8 months later from Sallie Mae stating that they'd "purchased" my loan from Stillwater National Bank... Now, here's my question: how can you purchase something from yourself?
- Sallie Mae's letter to me explaining their collection processes state that they are following the law to the letter under the Higher Education Act of 1965, and they increase the contact based on the number of days delinquent. From my understanding, even the Higher Education Act of 1965 is subject to the Fair Debt Collection Practices Act.
- Sallie Mae has stated they have had to place my account with them into a "special" area, and as their set-up is not geared to non-telephone contact, I will simply receive NO contact from them whatsoever - including receipts showing that I've paid them - because they cannot STOP the calls from coming through any other way.
All in all, it was an enlightening interview for both of us. We walked through my various statements, showing the increase in the private loan interest rate while I was going to school, and then the late fee increase and monthly payment increase by them each month I was unable to make payments...
Ben has stated he is going to call me in a few days, and apparently there is going to be photographer that will be contacting me as well.
I verified with him that, should you want your name changed, but still want to share your story, he wants to talk to you. This is an important issue that needs to be fully exposed, and changing your name doesn't change the facts.
Please - if you have had a private loan through Sallie Mae, and they're screwing you for it, let Ben know. It's important, not only for yourself, but for others out there who need help, too.