Saturday, May 19, 2007

Letter to a PR person at SM...

So, the gal who contacted me from Sallie Mae FINALLY called me back (late) on Friday. The message was that she was still working on getting someone in a "supervisory" position to get back to me regarding my situation to help me "lower" my monthly payments... She invited me to write to her via email, so I did...

Dear [PR Person],

I got your voicemail on Friday. Honestly, to say that I'm disappointed with Sallie Mae so far is an understatement.

You have to understand that from the beginning, I have felt that Sallie Mae and its representatives have been less than up-front with me.

The private loan was approved by Sallie Mae via WCI, *knowing* that I had a less-than-$600 per month income.

The loan was then "sold" from Stillwater National Bank, a subsidiary of Sallie Mae, TO Sallie Mae...

The interest rate of anywhere from 13% - 18% was applied to my private loan throughout my time at school.

At my exit interview, I was told by the loan representative that the payments would be $450 per month...

Less than 4 months later, I was informed by Sallie Mae that indeed, it was not - it would be $554 per month.

I attempted at that point to consolidate my loans, but even though both my private loan and my FFELPS loan were under the same account number, only my FFELPS was consolidated. When I asked why only that one was consolidated, I was told the private loan COULDN'T be consolidated.

I attempted no less than 6 times to speak with Sallie Mae representatives to try and work with them regarding my income, and ALL SIX TIMES I was called names, told I had no rights, and told that Sallie Mae was not willing to take ANYTHING less than the full $554 monthly payments.

I attempted again to consolidate the private loan, both via CitiBank and via Sallie Mae. Both times, my request was denied... why? Because Sallie Mae had been dinging me with credit reports, AND I didn't make enough money to pay back the loan... The loan which Sallie Mae had, in my opinion, irresponsibly agreed upon in the first place.

I now make double what I did at the time my loan was agreed upon, but I still don't make enough money to consolidate my loan, move my loan to another bank, or pay the amount that Sallie Mae is requesting...

To me, this is the BIGGEST bunch of irresponsibility I have ever seen in a financial institution, unless you count the World Bank debacle.

I feel that, in light of everything that has happened, Sallie Mae should do the right thing and disburse the loan completely. If they had denied me from the beginning, KNOWING what my income was at the time, and KNOWING that I would most likely be unable to pay back the loan at all, I would not be in this mess. The choices made by Sallie Mae were irresponsible at best, and inexcuseable at worst.

I am available Mondays and Tuesdays all day, and Fridays until 1pm PST.

Thank you


We'll see what she has to say to that...

~M

Friday, May 11, 2007

BusinessWeek's take on the issue...

by Ben Elgin

John Liles of Cleveland, Ga., dreamed of becoming a sports coach. He had lost his $9-an-hour job as a machine operator in 2005 as a result of a lengthy bout with diabetes. His illness hadn't stopped him from coaching his children's sports teams, however, and he hoped to turn the hobby into a career. He needed an associate's degree, so he signed up to study online with American InterContinental University (AIU).

To obtain loans, the school guided him to SLM Corp., better known as Sallie Mae. Liles, now 47, says he explained to AIU that he couldn't afford interest of more than 9%, and the school encouraged him to move ahead with the loan application. Several months into his courses, he says he was shocked to discover in a form Sallie Mae sent him that one of his loans, for $6,000, was growing at 18.1%. It would require monthly payments of $110 for the next 15 years, totaling $19,924. "I can't afford it," he says.

Cases like Liles' are proliferating as the cost of education has far outpaced the availability of low-interest loans whose repayment the federal government guarantees. With enrollment rising in trade schools, more lower-income students are relying on high-interest private loans, such as the one Liles received. "For hundreds of thousands of citizens, the worst mistake they ever made was to go back to school," says Alan Collinge, founder of advocacy group Student Loan Justice.

Many borrowers describe the loan process as opaque, saying schools and lenders don't explain interest rates or postgraduation payments. Some borrowers say they were unaware that private loans are different from less expensive federally guaranteed loans. "When you hear Sallie Mae,' you think of somebody's favorite aunt baking them a pie," says borrower Molly Cosgrove of Portland, Ore. "You don't think of high-interest loans." Once a federally sponsored organization, Sallie Mae became a fully independent corporation in 2004. It offers both private and federally backed loans.

After losing her $20,000-a-year job at a call center, Cosgrove enrolled in Western Culinary Institute in Portland in 2004, planning to become a chef. She says the school lined up student loans for her with assurances that the terms would be reasonable and her diploma would attract appealing job offers. She asked few questions. Today, Cosgrove, 33, has her degree—and $43,000 in debt, most of it accruing interest at 18.5%. Unable to get a job as a chef for more than $8.50 an hour, she went back to answering phones for $13 an hour. She owes Sallie Mae $553 a month but doesn't have anything close to that to spare. "I can't see a way out of the mess I inadvertently created," she says.

Career Education Corp. (CECO ), which owns both AIU and Western Culinary Institute, says it is not responsible for, and often not aware of, loan terms, which are agreed to by the student and lender. It adds that its schools inform students that private loans carry higher interest rates.

Sallie Mae says the terms of its private student loans are made clear in writing to would-be borrowers before any money is disbursed. "These are college students. At some point you have to read what you're signing," says Barry Feierstein, Sallie Mae's senior vice-president for private credit loans.

The lender says it recently capped rates on new private loans and is exploring ways to relieve the high rates facing some recent graduates. "We want people to have a fighting chance," says Feierstein.

Back-peddle much?

So, there I was yesterday, working on my wedding dress at home on one of my days off. My cell rings, and when I look at the caller ID, it's a 703 number.

Hmmm, I wonder... Who would be calling me from out of state?

I answer, and lo and behold, it's Sallie Mae.

Now, while I'm getting mildly worked up about the fact that they've contacted me after I expressly told them NOT to, the person on the other line is reassuring me that this is not a collections call. In fact, her name is Mary Fedder, and she works with Sallie Mae's "communications department" (i.e. the PR people).

Apparently, due to the fact that I've been speaking with Businessweek, and the fact that they look particularly cruddy - and in light of the recent investigations that the government has begun due to their questionable practices, she was calling to find out if there's anything Sallie Mae can do to help me... Why? Because "Sallie Mae is dedicated to assisting all their customers, especially those faced with financial difficulties.".

Trust me, it was all I could do to NOT laugh in her face. I succeeded, barely, to contain myself as she proceeded to explain that, while she didn't have authority to access my account, and while she couldn't promise anything because she didn't have that power, she'd like to talk with some people to find out what options would be available to help me.

She suggested a co-signer, which I blew out of the water. I refuse to put any of my friends or family through what they've put me through - and further more, they can't afford the crappy terms anymore than I can. She also asked what I'd done to try and alleviate the situation - so, I mentioned the fact that I'd attempted to consolidate the loan to lower the interest rate and payments - and was refused... Because I didn't make enough money.

She says she's going to be getting back to me by next Friday. We'll see what she has to offer, if anything.

~M

Tuesday, May 8, 2007

New linky goodness...

Thank you to the person who posted the information here. James, Hoyer, Newcomer & Smiljanich, a law firm in Tampa FL, is looking into further fraud issues with Sallie Mae. Please go HERE or visit the link list on this page. It's a simple process of filling out your information, telling your story, and hitting "send". Can't get much more simple than that.

From the information I've read on their website, they specialize in class action lawsuits and work on advocate cases similar to us Sallie Mae victims. It's time to put some more metal to the grindstone, and push a bit more.

~M

Saturday, May 5, 2007

Progress... and yet...

I received a call from the NY Times for an interview. The reporter was aware that I was being interviewed by Ben Elgin for another article of a similar genre. She asked when it would be out, so I forwarded her email to Ben and asked the question, with a suggestion that she ask him directly.

She then decided to respond with a "thanks, but no thanks" email stating that since I was in contact with another reporter, she was going to pass on interviewing me. WTF? I mean, it's not as though she didn't know from the very beginning that I was being interviewed. Personally, I think she was simply trying to find out when Ben's would be out to try and beat him to the punch-line. I doubt she had any serious intention to interview me. Sad.

In other news, however, apparently Ben is getting responses from Sallie Mae, as well as from WCI, the college I graduated from. I'm mailing them my "permission slip" today which allows him access to my financial records, etc.

Also, the government has finally decided to open its eyes and see that there's something questionable about Sallie Mae's collection and debt practices. There's a full-scale investigation going on at this point to find out what happened. To quote Fark.com: "Suck it, Sallie Mae!"

To close, I will quote a part of something Ben asked me in our interview...

"You seem to have a good, positive attitude about all of this. I mean, you laugh, and you're smiling a lot through all of this. How are you able to do that?"

"Well, you have to laugh at the ridiculousness of it all, honestly. If you don't, you'll simply spiral down to the depths and never come out again. I've been there twice before, and I don't want to do that again. I have a family that counts on me, and I don't want them to see me that way. Honestly, you have to have faith that somehow, your actions will eventually bring about change - if not for you, for someone else."

~M