Thursday, March 26, 2009

Emailed just recently...

I just got this in my inbox today... Please do join up with them. I have spoken with the law firm, and have done research on them - they are on the up and up, and are working hard to stop Sallie Mae from continuing on with their outrageous policies and procedures.

As you may know, the James Hoyer law firm filed a class action lawsuit against Sallie Mae in December 2007 in connection with its underwriting of private student loans.

As you read this e-mail, the US Department of Education is reviewing bids from six companies that want to win a lucrative contract to service federal student loans. Among the final six is, of course, Sallie Mae. The awarding of this contract will be made soon.

Our investigation has led to thousands of complaints from borrowers about Sallie Mae's abusive and grossly mismanaged servicing and collection practices. These practices negatively impact millions and must be addressed by the Department of Education.

If you want to stand up against Sallie Mae being awarded this contract, we urge you to contact Nicholas Chung or Mike Whisler, the Department of Education Contract Specialists acting as points of contact on this issue. Their contact information is as follows:

NICHOLAS CHUNG Phone: (202) 377-3635 E-mail:
MIKE WHISLER, Phone: (202) 377-3450 E-mail:

We urge you to contact these people NOW, as well as your representatives in congress and the senate to share your personal story of how you have been abused and mistreated by Sallie Mae. Let them know that you will not sit quietly by while the government rewards a company that has caused so much harm to so many people. Staying quiet will not help anyone.

Please join the Facebook group: FINAL SIX - Student Loan Servicing Job Up For Grabs ( so that you can share your contact with the decision makers and tell other people about this very important issue.

Wednesday, September 3, 2008

Checking in (From Alan Collinge)

Hey Everyone,

Welcome to the new members. We are picking up members at an accelerated rate now, which is good. I can't stress how important it is that we seek out others in the same boat, and band together.

1. We were featured again on Fox Business News on Friday. The piece was highly antagonistic, and even slanderous at one point. Nonetheless, I feel that we held our own, and made at least some of the important points that needed to be made. The link there is:

2. CNN ran a piece featuring our members today. Unfortunately, I haven't been able to find it on the web. Anyhow, thanks to Peter, and others who stepped up to be interviewed for this piece.

3. I hope you will please consider this: Now more than every, your financial contribution to the Student Loan Justice PAC is very important. If everyone receiving this donated a modest amount (say, $20-$40), we would be in great financial shape to begin to have a real influence on the Hill.

That's it for now. Keep fighting, and keep us posted.

Thursday, August 14, 2008

Hey look! Trollers!

Yeah, apparently the good ol' boys (and possibly girls, too) from Sallie Mae are out in force today, trolling for those of us who are posting about our issues with their underhanded tactics.

They're trying to claim that we lead extravagant lives, refuse to pay our bills because we're irresponsible, and that we should have read the fine print to begin with.

They tell us that we need to simply buckle down, quit paying for that brand new car we just purchased, and give up the house we just put a huge mortgage on, and lead decent, bill-paying lives - oh, and pay up and on time to Sallie Mae because we should have known better than to expect we could get away with not paying our bills at all.

I don't know about anybody else, but I don't have a new car. Hell, I don't even have *A* car, let alone a new car. As for the house, I live in an apartment that my now-husband had been living in when we got together. He's been here now 8 years... and we don't intend on moving not because the rates are good, but because moving is above our means.

The fact of the matter is, these wonderful trolls are telling us everything that we have told ourselves while we beat ourselves up, trying to figure a way out of the financial mess that we've gotten into. Regardless of who signed the paperwork, and who agreed to do what, the bottom line is, we are stuck with high interest rates, exorbatant monthly payments, and no recourse to lower them because the company is having too much fun collecting from our sorry butts to even think of assisting us.

We have had to choose between paying rent or paying our student loan. We've had to, at times, choose between paying for food or paying our student loan. We aren't talking about the payment on the brand new Jag, or the new 4-bedroom house. We're talking basic necessities that Human Rights activists have been lobbying for years to get people in third world countries. Housing, Food, and basic medical care. When we must choose between one of these things and paying a student loan, there's something wrong with the system - especially when we could do all of it IF we were allowed to work out a more reasonable payment plan than $500-$700/month - and 80% of that being interest!

Honestly, I hope that Sallie Mae is paying these people a good amount of money for surfing the net in hopes of bullying us more. And I hope that somehow, that money helps salve their conscience after they read what their own company has done to thousands upon thousands of us without a lick of remorse. And I hope that someday, somehow, revenge in the way of sweet, sweet Karmic justice, will serve a HUGE helping of crow to these people for even THINKING that this was an ok job for them to follow through with.

Meanwhile, I'm going to set comments to members only - it means that you will HAVE to identify yourself before you can post. While at times I have found these trolls to be amusing, it is tedious and tiresome at this stage.


Tuesday, August 12, 2008

Update from Alan Collinge

Hey guys,

So at least 2 dozen of our members have been interviewed over the past three weeks by a ton of papers, including the NY Times, Seattle Times, Wall Street Journal, Illinois Times, the Journal Sentinel, Chonicle of Higher Education, and a few others. Also, our members have been interviewed by Tavis Smiley, CNN, and a couple of local TV stations, one of which has aired. So far, however, nothing has made it into ink. We're also booked for some radio show in September in the Silicon Valley area. So these guys are basically sitting on the stories. My hope is that when the NY Times thing goes, the others will follow their lead, take their stories of the shelves, and publish.

In the meantime, keep pressing the issue with local reporters.

Also, there's been alot of people wanting to have a forum to meet and discuss with other borrowers. We tried this on Yahoo for a year or so, but the chatroom got inundated by lurkers working for the student loan industry. However, I have created another such room on Google. [please contact me privately for the link, to avoid being spammed or trolled too early... ~M]

There are currently no members in this group, so hop on in, and get a discussion going if you wish! This is a public forum, so we can expect it to get overun eventually, but for now it is completely safe.



Monday, August 11, 2008

Recent postings...

I've been getting a LOT of comments and emails recently regarding Sallie Mae and their treatment of their debtors. The following are comments that have been made in just the past 5 days on both my "personal" blog, and on this one. I'm posting them in an actual blog because I don't want other readers to think they're alone. You're not. You are part of a much larger group of people, all of whom are repeatedly having issues with Sallie Mae as a lender. You are not alone, you are not a horrible person for asking for understanding from them, and you are not the only one getting flack and poor customer service when you do so.

There is a reason that Alan Collinge started the PAC - to help take the blinders off of society, and make known Sallie Mae's dirty little Million-dollar secrets. There is a reason why they make millions of money off of defaulted loans, and give their CEO's raises in excess of 5% per year - on an income that's already 6 or 7 figures. There's a reason why according to opening comments made in their 2003 Annual report, Former CEO (Now Chairman) Albert Lord (who with his wife personally contributed over $250,000 to senators and Congressmen in support of education legislation in just the last election cycle) boasts that the company's 29% core cash earnings-per-share growth could be attributed largely to fees collected from defaulted loans, as well as loan origination growth.

Their collectors are bottom-feeders, who will do anything to suck the American people dry however they possibly can. Their "customer service" people are less-than-human, who aren't interested in anything but their commision for getting payments regardless of the harm inflicted upon the debtor.

Please review these comments and emails, add your own if you wish, and go . Share your story, contact your local congresscritter, make a newspaper or local magazine listen to you - shout on the streetcorner if necessary, even. Just do something to make yourself - and others- heard. If at all possible (and I know, it's hard to find the extra quarters for laundry, let alone something else), make a donation to the cause. Alan has been funding this venture largely on his own, and has been doing so since 2005. Recently, he quit his job to devote his time soley to this cause. He makes NO money doing this, he does this for everyone who has been (and will be) screwed up and/or over, by student loan lenders like Sallie Mae.

"First of all, I appreciate the work that you have put into chronicling your issues on this website. Thank you.

"What I wanted to know is how much time has salliemae been taking to respond to inquiries to the pr department, and with how much consistency?


"Hi, I stumbled upon your blog when I was surfing 'SALLIE MAE RIP OFF' on the internet after getting pissed at them again. I really enjoy your insightful and intelligent commentary.

"I don't have any where near the same amount of problems as you or some of the other people I've read about do but I feel like me time is coming.

"I was wondering if you had any information on the terms "Adjusted Monthly Income" and "Discretionary Income". I am filling out economic hardship paperwork now but I make a little too much in my Gross Monthly Income to qualify. I live in Los Angeles and I can tell you, I can't afford a $400 payment each month on top of my normal bills, rent, gas, food, health insurance and so on. I know other people cope by using credit cards but I REFUSE TO LIVE ON CREDIT!!! If I can't afford it than I'm not doing it! I don't even drive my car except to and from work!

"I know I have a fight on my hands with Sallie Mae but I was hoping you could give me some advice or point me in the right direction.



"Other than the 8 to 12 phone calls I and my 80-year old parents receive on our phones every day, what else can I expect from Sallie?

"I too just had a terrible experience, they are calling everyone in my family even people I don't talk to and I have an agreement with them that I was to make a payment. I called to complain to a supervisor named James Carter. I told him I was calling to make a payment as I promised and that I wanted the harassing calls to stop or we will have to get an attorney. He said this " Let me get this straight. You are going to get an attorney. Attorneys cost money. Which you obviosuly don't have or you wouldn't be late or had to get a cosigner on your account because your credit wasn't good enough to get your own student loan. Am I getting this right? Talk is cheap and we will call you every hour on the hour until you deal with this." I asked his name and he said "James Carter... now make sure you write it down now!" I hung up on him and my husband called him back and said I thought you work for Sallie Mae, yet someone calls in to make a payment and you harass them to the point they have to hang up. He said " i could care less if she makes a payment, I wont lose any sleep at night". You had to hear the tone of his voice. It was like that sneery. I totally pictured that this guy is some short, bald guy, with a small you know what, who abuses his employees and his power. He cheats on his wife, his kids hate him, he prob. tries to look down the shirts of all the women in his office when he isn't talking down to them and intimidating them. So I had to call a different department to make a payment. My suggestion to everyone is this. RECORD YOUR CALLS!!!! I should have let the asshold keep going as I would have had more abusive comments because that is what he was doing. It was abusive and harassment and I am reporting them to every agency I can find. And if Sallie mae doesn't repremand this guy or fire him, I will default on my loans and leave the country. I would rather live in a box then let those people get one cent from me if they allow this man to abuse people like that. His name is JAMES CARTER and he is in the repayment department. I think everyone should call JAMES every hour on the hour and to tell him he is an asshole. lol


"Sallie Mae harrasses my husband several times a day. Basically the same as all of the above, but they also call MY dad several times a day and he has absolutly nothing to do with my husband's loans. They will not speak to me at all even though when the loans were first set up; it was based on my income-he did not work at the time. He had grants that were returned and he was forced to have his Mother cosign for supposedly one loan for like 3,000 and it turned out to be 9,000 and gave her the privilage of sallie mae calls reguarding all of his loans. Our income has declined by a lot because the place I was working closed and he STILL hasn't found a job to pay for all of his ITT Technical associates degree$50,000 DEBT. They call or the computer calls and it's not a once a day thing, more like 5-6 times a day and try for foreberance and whatever else "help" they offer but our income is to low to qualify for any of it.


"Sallie Mae is a sink hole, both monetary and psychological, for anyone who wants to further their education. I've been able to keep up with my payments of apprx. $600/month ONLY because I moved back in with my parents after graduating with an 18mo. degree.

"I never found a job in my field, as the school I had gone to over-exaggerated on the availability of jobs in legal administration. I work one full-time and one part-time job, and the full-time paycheck is sucked up by SM every month. There is no way in hell i'd be able to pay for my own room and board without finding a LAA job, and even then money would be tight.

"So, I joined the Navy, scored well on my asvab, and was given the option of having the federal portion of my loan paid off by them in exchange for a 6 year service agreement. Since the federal bit is the largest part ($19k out of $27k), I agreed and started filing my LRP forms.

"SM, my lender, is under obligation to release my loan information on my request, especially under these circumstances. You'd think they would be more compliant since they are getting a nice chunk of change handed to them at once, but they keep sending my LRP forms back saying they cannot release my loan information to me or anybody else if they didn't want to. I guess they really don't want to lose out on the interest.

"I've got about two weeks to file these papers, or I lose my LRP bonus. My next step will be talking to JAG about getting a warrant or subpoena or SOMETHING to get them to release my info.

"Its probably not something you'd consider after reading your SM blog, but I think they'll be able to help me. I'll comment again later to let you know if they end up complying or if I end up losing my bonus.


As you can see, Sallie Mae has stooped to even attacking and denying assistance to those who would defend our country, who would take up arms against an enemy, and literally give their life if necessary to help preserve American freedoms. How self-centered and asinine can you get?

Again, please go to and share your story, and donate if at all possible. Contact your local newspaper, news channel, go to a local school and hand out flyers telling your story and letting them know what Studentloanjustice stands for. Do what you can, and let yourself be heard.


Tuesday, June 10, 2008

Frauds and notations...

I am still here, and still keeping tabs - life, however, has had its demands lately; not the least of which was becoming a new mommy about 4 months ago… Meanwhile, I am still occasionally getting comments on my original post over at my personal blog, under the “Sallie Mae Sucks Ass” (you can check it out), even though I’d posted there (in the comments section) that everything that had to do with Sallie Mae from that point on should be directed over to this blog. The following is the most recent of comments that apparently was posted to try and dissuade me from continuing on with my determined plan to help stop (or at least slow down) the financial hemorrhaging that Sallie Mae has caused to so many borrowers:

companies like sallie mae are purhased and sold all the time emailing the VP will do no good. Besides do you honestly think anyone will read them? I used to work for "Salie Mae" although i represented the Guarantor, USAFunds. We are in the same building (same #) calling about the same loans but are a seperate corp. thank you "mortgage financer" All i can say is you know how much money you are borrowing what did you expect the payment to be afterwords? try taking out 40 - 50,000 for a car and see what that payment is. The fact of the matter is that federal student loans have an extremely low interest rate are are the best type of loan a student can have. If you took out Private loans then sorry for you those interest rates are crazy high, but that amount was figured at an amount that someone (you, parents etc) should have been able to contribute to your education, wastefull spending is no justification for these "harrassing" calls. If you borrowed enough money to make a $500 / mo payment your job should reflect that. I borrowed 40k myself make $9/hr and can still find plenty of money to live and pay every bill i have. Stand up be a man and adjust your lavish lifestyle back to normality. I would imagine you have used forbearance over and over which has only capitolized your interest probabl doubling your loans by now. Word of advice if you havnt already. START PAYING anything will slowly eat away your debt, may not stop the calls but will obviously help. You have to prove and "Undue Hardship" to get any legal help for student loans. These loans are created to be given easily to students to get them the knowledge they need to succeed, for that reason they are incredibly hard to dismiss. Your choices are A: Permanent and Total Disability or B: Death.

Now, let’s take a good look at this note, piece by piece. Let’s really analyze it and see where it’s coming from. First and foremost, the lack of spell-check and punctuation, not to mention the proper capitalization of words. It’s sad that what I’m seeing here is someone who still works for Sallie Mae (It‘s pretty obvious), who can’t spell their name, and who can’t seem to figure out how to create proper sentence structure or spelling.

So, from the beginning…
companies like sallie mae are purhased and sold all the time emailing the VP will do no good. Besides do you honestly think anyone will read them?

Actually, not only did they read it, but something actually got DONE about it - and you’d know this if you actually did a bit of research through my actual Sallie Mae blog and noted that I not only got a reduction of payments, but also a reduction of my percentage rate - via Barry Feierstein, the VP of the company. Thanks, but you’re already beginning to annoy me from sheer stupidity.

I used to work for "Salie Mae" although i represented the Guarantor, USAFunds. We are in the same building (same #) calling about the same loans but are a seperate corp. thank you "mortgage financer

I’d say you STILL work for them, what with your lack of empathy, not to mention your piss-poor information. Further, they are NOT a separate corporation - they are all under the same major corporate vendor identity that is Sallie Mae (or is that Salie Mae, as you spelled it). This is something that has been a repeated bone of contention throughout the company’s long history with its borrowers. They own over 12 different collection companies, but claim since those companies are all named differently, they are all allowed to call individually for loan collection - even though they are all doing debt collection for the SAME COMPANY - Sallie Mae.

All i can say is you know how much money you are borrowing what did you expect the payment to be afterwords? try taking out 40 - 50,000 for a car and see what that payment is.

I’m sorry - if you’re going to take out a loan for $40-$50,000 for a CAR, then that’s a different kettle of fish. A vehicle is not supposed to get you further in your career. It will not provide further knowledge or help to increase your value as a member of society based on your training. Try comparing this with something else - I’d be more inclined to listen about it. Furthermore, the percentage rate on a car loan is based on your annual credit score, and is normally a fixed rate. This is not necessarily so for a student loan.

The fact of the matter is that federal student loans have an extremely low interest rate are are the best type of loan a student can have. If you took out Private loans then sorry for you those interest rates are crazy high, but that amount was figured at an amount that someone (you, parents etc) should have been able to contribute to your education, wastefull spending is no justification for these "harrassing" calls.

You are correct - Federal student loans *do* have extremely low interest rates, and ARE the best type of loan a student can have. However, many schools do not differentiate at the time of signing which type of loan they are having you agree to - legal or not, this is the absolute truth of the matter. In addition, truth in lending laws are regularly suspended when requesting student loans, and interest rates on private school loans are not required to be disclosed until AFTER the paperwork has been signed.

Further, as for an amount that either my parents or myself “should” have been able to contribute to my education… I was 30 years old when I requested the loan - well past the age that my parents income would have been looked at. In addition, I had no job, no income, and owned an 11-year-old Ford Festiva when I signed the papers - I had NOTHING to base an amount on. What sort of “wasteful spending” are you talking about? Rent? Food? Electricity? Am I expected to live out of my car and eat nothing for days on end in order to pay back my loans? I think not. NO ONE should be forced into that type of situation, yet Sallie Mae places thousands of people into similar situations each year, all in the name of “bettering” and “helping” people.

If you borrowed enough money to make a $500 / mo payment your job should reflect that. I borrowed 40k myself make $9/hr and can still find plenty of money to live and pay every bill i have. Stand up be a man and adjust your lavish lifestyle back to normality.

You are able to make it on $9 per hour? And still find plenty of money to live on and pay every bill you have?? REEALLY? Let’s do the math here, bub. Let’s base it on a standard 40 hour work week and see what’s going on here:

$9/hr x 40 hrs x 2 weeks = $720 x 70% (what you’ll keep on avg after taxes) = $504

So, you make a total of $504 every two weeks… An average of $13,104 for the year…

Now, let’s look at interest - we’ll give you the benefit of the doubt and say that you’re annual interest rate on your $40k loan is at 6%. That’s an additional $2400 per year. Let’s say you pay $500 per month for you’re loan. That means at the end of the year, you’ve paid a total of $6000 - $2400 of which is that interest, and the other $3600 in the actual loan. Which is really good, considering. I must say, I have to applaud you - you’ll be out of debt at that rate within 13 years of the original borrowing date - if you continue on and NOTHING causes you to lose your current situation…

Also, if you pay $500 per month for you’re loan, you have a total of $546 each month for everything else. It’s nice living with your parents rent-free, isn’t it… Because that’s what’s going on here. Let’s be honest - even in the cheapest states at this point, rent for a 1 bedroom averages about $300 per month. Even if you have roommates, you still end up paying about $250, if not $350 per month, just for your rent - and then there’s the electricity and food to go along with it.

As for a “lavish” lifestyle, let’s really look at what I own/have vs. what I WANT… I own nothing - or at least, nothing of any real value. I have no car, I have no house, I have no major appliances. I have a computer that is aging into antiquity as I type this, which I had before I got the loan… I have A cell phone with no extra frills because it’s necessary for me to have a way to contact others due to work/baby/bills/family. I have ONE splurge that I give myself every month, which is the cable internet, because I do work from home on occasion, and need the speed.

Did you even READ anything that I’d written about how much I was paying? Or what my interest rate was at the time that I decided to actually DO something about it? They had me sign paperwork with me agreeing to pay on a loan with 18.9% interest! That’s usery, plain and simple. They bent me over, and without even a lick of KY or a drink offer afterwards, Sallie Mae totally screwed me. Just as they have thousands of others.

As for me “standing up” and “being a man”, that would be rather difficult, since I’m a WOMAN - again, if you’d read any of what I’d written, you’d know that. Stupid git.

I would imagine you have used forbearance over and over which has only capitolized your interest probabl doubling your loans by now. Word of advice if you havnt already. START PAYING anything will slowly eat away your debt, may not stop the calls but will obviously help.

Yes, I have used forbearance. I’ve had to… Between not having a job that paid enough to even cover rent for about 5-6 months, and then finally getting myself back onto my feet enough to pay my basic utility bills and rent, Sallie Mae has been routed to the back burner a few times - they didn’t like it, but that’s the way it was. The fact of the matter was (and still is), paying “anything at all” was not going to “slowly” eat away at my debt - not at the interest rate that it was at. I wasn’t even paying a THIRD of the interest rate per year before I got them to re-negotiate and lower it. The level of absurdity both of Sallie Mae, and of your continued diatribe of noxious vomit leave me relatively speechless, and I only continue on with this to help others who I KNOW read this to understand exactly what they’re up against.

As for the calls stopping, that’s easily solved with a threat of a law suit via a faxed letter to their legal and customer service team (see a prior entry here to find out how). Legally speaking, as a company, Sallie Mae cannot call you more than once every 24 hours on your debt, and cannot call you names, cannot threaten you, cannot threaten your family or work, and cannot otherwise demean you or your character at ANY time, regardless of the amount of money that you owe them. Period. End of story. If they do, and you send them written notice, and they continue, you can sue them for harassment.

You have to prove and "Undue Hardship" to get any legal help for student loans. These loans are created to be given easily to students to get them the knowledge they need to succeed, for that reason they are incredibly hard to dismiss. Your choices are A: Permanent and Total Disability or B: Death.

This falls under the “duh” category. HOWEVER, one thing you forgot to mention is that while student loans were *originally* created to be given easily to students to provide opportunity to increase their potential and succeed in the workplace, the reality is FAR different.

Sallie Mae has made student loans into a multi-billion dollar for-profit business, specializing in the default collection of loans that they themselves, through multiple “bank” names, have provided, at high interest rates and even higher re-payment costs. It is not what those who originally created student loans EVER envisioned, and I’m sure that they are horrified at the knowledge that a company is preying so viciously (not to mention greedily) on people’s lack of knowledge by providing such misleading information like you’re giving here. You have been uncovered, found out, and proven to be a fraud. Try again.


Tuesday, August 7, 2007

Article in the Chronicle of Higher Education

From the issue dated August 10, 2007

Nonprofit Lenders, While Helping Students, Help Themselves
Questions arise as Congress considers giving the state-based agencies an advantage over their competitors


Janice Frazier, a 56-year-old single mother in Silver Spring, Md., has been struggling to pay back a $7,000 loan that she used to help her daughter attend Tufts University.

The nation's largest lender, Sallie Mae, spent six years ignoring her attempts to negotiate its share of the debt and win a deferment on medical grounds, Ms. Frazier says.

But the Pennsylvania Higher Education Assistance Agency, a nonprofit lender known as Pheaa that is run by the state and operates nationally, was even worse, she says.

"Eventually I had to begin sending everything certified mail and even had to file a complaint with the Better Business Bureau of Maryland to get AES [Pheaa's commercial arm] to admit they received my fifth deferment application and actually grant me a deferment," says Ms. Frazier, who now owes more than $15,000 from additional interest and fees. (Spokesmen for both Sallie Mae and Pheaa say they take care to resolve customer complaints but cannot comment on the details of Ms. Frazier's case, citing privacy laws.)

Despite some complaints about the practices of state-chartered lenders like Pheaa, lawmakers are looking to encourage their growth as Congress and the states tackle problems of corruption and profiteering in the student-loan industry.

There is little dispute that the nonprofit lenders are more generous with their income than are their for-profit counterparts. Pheaa earned $191.5-million last year, and gave 91 percent of that back to students in such forms as grants, scholarships, and educational programs. Sallie Mae earned $1.2-billion and donated about 1 percent of that through its charitable arm.

Less clear, however, are other benefits that nonprofit lenders might provide individual borrowers and taxpayers. Many use the same aggressive collection techniques seen at for-profit lenders. Some spend lavishly on executive salaries and vacation-style conferences. Some have relationships with for-profit partners that let those companies siphon off profits.

And many nonprofit lenders lobby alongside their for-profit counterparts in support of the federal government's bank-based system of student lending, despite lawmakers' arguing that the less-popular alternative — the Education Department's direct-loan program — is cheaper for taxpayers. Those efforts have some college and student lobbyists wondering if the nonprofit agencies deserve extra breaks from the federal government.

"I applaud them for whatever good they do at their own cost," Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers, says of the nonprofit lenders. "When the good they do is at our cost, maybe we ought to decide what good needs doing."

A Reward From Congress?

Congress doesn't appear to share that concern. A budget plan approved last month by the U.S. Senate would cut the federal subsidy to lenders in the bank-based loan program by 0.5 percent. The plan would cut nonprofit lenders' subsidy by only 0.35 percent.

The House version would cut subsidies for all types of lenders by 0.55 percent but give the nonprofit agencies additional fee breaks that would create an advantage similar in size to that of the Senate bill.

The chairmen of both the House and Senate education committees, Rep. George E. Miller, a California Democrat, and Sen. Edward M. Kennedy, a Massachusetts Democrat, respectively, declined repeated requests to explain why they support the breaks for state-run lenders.

"A number of committee members on both sides have effective nonprofit lenders in their states," says Melissa Wagoner, a spokeswoman for Senator Kennedy, "and it was important to those members that the Senate bill recognize them."

Others, including some traditional Democratic allies on student lending, do not agree. They point out that the nonprofit lenders are already exempt from paying income tax, and they can issue bonds that are tax exempt, both of which give them advantages over for-profit lenders.

"It doesn't make economic sense to provide them yet another extra subsidy," says Robert M. Shireman, a former education-policy adviser in the Clinton administration who founded the Institute for College Access & Success, an advocacy group in Berkeley, Calif.

Giving nonprofit agencies more money "to do the same job as more-efficient for-profit lenders," says Mr. Nassirian, "is not only economically illiterate, it sets the stage for whole new round of waste, fraud, and abuse."

100-Hour WorkWeeks

Congress is reacting in part to such incidents as the estimated $225-million that Sallie Mae has paid its chairman, Albert L. Lord, since 1999; the discovery that several college student-aid directors as well as an Education Department official were holding stock in a for-profit lender, Student Loan Xpress; and the corporate giveaways at events like the annual conference of the National Association of Student Financial Aid Administrators.

But some of those same activities, albeit on a smaller scale, can be seen among nonprofit lenders, who hold about 20 percent of the federally guaranteed student-loan market.

Tony Hollin, as chief executive and chairman of Educational Funding of the South, a nonprofit student-loan company based in Knoxville, Tenn., and known as Edsouth, collected more than $1-million in salary in both 2003 and 2004, according to federal tax filings.

Edsouth, which says it is the nation's 13th-largest holder of student loans, paid Mr. Hollin $570,461 in 2004, when he reported working 50 hours a week, according to the IRS Form 990 filed by the company. That same year, he was paid $540,000 while working 50 more hours a week as president of Educational Services of America, an affiliated Knoxville-based nonprofit agency that helped manage student loans.

Mr. Hollin also received more than $1-million from the two companies in 2003, also while reporting 50-hour-a-week duty at both jobs. Mr. Hollin left Edsouth after a corporate reorganization last year, becoming chairman of two for-profit companies, Edfinancial Services and Edamerica, that had been part of Educational Services of America.

The reorganization was designed to shed a part of Edsouth that "was a very commercially oriented activity," says Edsouth's president, John E. Arnold Jr. "That salary is not here any more, I can assure you that much," Mr. Arnold said of Mr. Hollin's compensation.

The tax filings also list Mr. Arnold as working a combined 100 hours a week in 2004 — or more than 14 hours a day, seven days a week, all year long — when he collected more than $300,000 from the two nonprofits. "I probably did, yes," work that many hours, Mr. Arnold said. He said he now averaged about 12 hours a day, "not including travel time."

In other cases, nonprofit lenders help outsiders enrich themselves. A leading example is Sallie Mae's relationship with USA Funds, a loan guarantor staffed mostly by Sallie Mae employees. USA Funds enjoys nonprofit status, yet pays $250-million annually to Sallie Mae, according to USA Funds' tax filings.

The nation's largest nonprofit holder of student loans, the Brazos Group, of Texas, pays for the services of a law firm owned by the president of Brazos, Murray Watson. The fees that Brazos pays for legal services are determined by an independent consultant, "who told us the high, the medium, and the low on legal fees," Mr. Watson said. "And we try to stay below whatever the medium fee is."

The nonprofit lenders also have annual gatherings with vacationlike elements at a time when the National Association of Student Financial Aid Administrators, under political pressure, is scaling back its meetings.

The Education Finance Council, which represents many of the nation's nonprofit and state-chartered student-loan companies, holds its annual conferences in resort locations like Henderson, Nev.; Rancho Mirage, Calif.; and Scottsdale, Ariz. The council's president, Kathleen Smith, defends the events as focused on work. "I am confident in the respect and care that my members have for the students in their states," she said.

Guaranteed Return

Nonprofit lenders have also helped themselves, and their executives, through a federal law meant to help protect them at a time when the cost of making loans was high.

In the 1980s, when the economy was in the doldrums, Congress allowed nonprofit lenders — those that finance their loans with tax-exempt bonds — a guaranteed return of 9.5 percent. Congress eliminated the 9.5-percent guarantee in 1993 but grandfathered in loans already made. Several state-chartered nonprofit lenders, however, maintained that the government's regulations allowed them to keep receiving the 9.5-percent return by simply refinancing bonds issued before the cutoff date.

Some loan companies collected at least $6-billion in additional federal subsidies, according to a 2004 report by the Institute for College Access & Success. Pheaa ranked second only to the National Education Loan Network, a for-profit student-loan provider based in Nebraska that had bought some nonprofit agencies, in the volume of loans it submitted for the extended 9.5-percent reimbursement, the report said.

For several years, the subsidies from the 9.5-percent program provided Pheaa with a "rather large portion" of its profits, Pheaa's chief executive, Richard E. Willey, told state legislators at a hearing in February.

Over those same years, Pheaa executives embarked on a spending spree, incurring expenses such as $45,000 to charter a Lear jet, and more than $860,000 on trips that included spa treatments for spouses and staff members, limousine rides, and falconry lessons.

The spending was first reported by The Patriot-News of Harrisburg and other news organizations in Pennsylvania that spent 19 months fighting for public access to the records. Pheaa spent $410,000 opposing the disclosure.

Pennsylvania is now among a few states that are re-evaluating the benefit that such entities provide their students. Gov. Edward G. Rendell, a Democrat, and some members of the legislature have given encouragement to persistent suggestions by Sallie Mae that it purchase Pheaa assets.

State Rep. Craig A. Dally, a Republican, while expressing support for Pheaa's mission, told Mr. Willey at the February hearing, "You've certainly caused some of your own problems."

This year in Missouri, Gov. Matt Blunt, a Republican, signed into law a measure ordering the Missouri Higher Education Loan Authority to sell some of its student loans to help pay for $350-million in college construction projects. That was short of the outright sale of the agency that had been under debate.

'Extremely Lucrative'

Even critics of some of the behavior of nonprofit lenders agree that they might be a better alternative.

Nonprofit lenders and servicers "tend to be more responsive" to students, said Alan Collinge, founder of, an advocacy group.

Yet, he said, "All lenders, whether nonprofit or for-profit, are operating in an extremely lucrative environment, and are protected by largely the same sets of laws that provide little protection for the borrowers, and allow huge fees, and draconian collection tools for delinquent debt."

The nonprofit agencies do give more money to students than for-profit lenders do; most pay their executives less; and none have been found engaging in such practices as making payments to college administrators or helping colleges shape their enrollments to steer needy students into larger loans, said Jon H. Oberg, a former U.S. Education Department researcher.

Pheaa's profits are used for purposes like forgiving the debt of active-duty soldiers and encouraging the training of more nurses in Pennsylvania. Brazos runs seminars to help high-school students understand their loan options. Edfund donates to groups like the Orphan Foundation of America.

"The not-for-profits are obviously not clean on a lot of things," Mr. Oberg says, "and that's why Congress really needs to reform them."

Yet the nonprofit lenders could also be seen by Congress as allies, especially as students increasingly face the need to finance their education through the growing private loan industry, he said.

"That," Mr. Oberg says, "is where their tax-exempt privileges and so on could do students and taxpayers of the country a real service."

Saturday, July 28, 2007

YOUR Oregon Rep!

I have volunteered and been accepted for the position of's Oregon State representative.

The biggest thing about this is that now there IS someone to talk to, here in Oregon, about student loan issues. I know from personal experience that it can feel very lonely (loanly?) out there, feeling like you're the only one with a financial hardship due to high student loans.

You aren't alone, though. One of the biggest things that is happening is a slow awakening throughout the country. More and more of us who are in the same boat are reaching out to one another and forming bonds and strength. It is that strength that can slowly topple corporate mountains like Sallie Mae.

I need your help, though, to get the word out that we are here, that we need more support, and that we can work together to change things.

We need people who are willing to copy and pass out flyers, post information, get meeting places set up, and be willing to work with me on getting the word out about this organization. We are grass-roots, so there's no funds - it's just us... If you have the ability to get interviews with local campus papers, free local papers like Willamette Weekly or The Mercury, or even The Portland Tribune, please do so - and let me know as well.

This can be something really big, and you can be a part of it, from the ground up.

I will continue to post my own journey regarding Sallie Mae here, and I will also be posting what I'm doing locally within the Portland area.


Suggestions for those with issues...

I've been getting comments requesting options that they might have regarding the horrible collection practices that Sallie Mae has instituded against them. I know, they're awful, and SM doesn't honestly have a leg to stand on. Regardless of prior comments that I've read about "due diligence", I've also consulted with the William D Ford institution (the Federal Government's answer to Sallie Mae), and have been advised that "due diligence" is superceded by the FDCPA.

Those representatives you speak with are front-liners. They get paid bonuses for each buck they make us cough up, and are trained to ignore the more polite virtues of discussion (as, I'm certain, you've found). They don't want to work with you, because that would mean they'd have to acknowledge their own humanity while working for a company that has none.

The following email is for a woman in the PR department at Sallie Mae. She is a very *nice* woman... I've spoken with her on the phone several times, and we've exchanged emails. She is prompt, polite, and is willing to both listen and get the issues heard at the appropriate level. What I do ask is that you PLEASE give her a chance. The front-liners are one thing, the higher-ups and those outside of the collection loop are another. That's not to say they aren't all part of the same company, only that their tactics are better.

With that said, prior to contacting her, you should do the following:

1. Utilize your fax machine and fax a copy of a "cease and desist" letter over to both customer service and the legal department (at SM, they're the same fax #, just fax it twice with two separate cover letters on it). If you want, go ahead and use mine as an outline, re-writing it to fit your specific information and issues. Make sure you bold those items that were violated, to clearly indicate to them what they have done wrong. Also, make sure that you clearly state that a transmission indicating "OK" is the same as Sallie Mae agreeing to your cease and desist request.

2. Document each additional phone call after you fax that letter. Legally, after you receive that transmission report, they can no longer call you more than once every 24 hours. Period, end of story. That's from the Federal Government, folks, so if you still don't believe me, go ahead and call the William D Ford foundation. They'll be glad to clarify that with you, just like they did with me.

3. Email Mary Fetter. Again, she's a really nice woman, so when you email her, start from the beginning, and tell your story about what's been going on, from beginning to now. Let her know that you need to have resolution to this issue, because you are attempting to pay your loan, but you cannot succeed in doing so based on the demands that are currently being given by Sallie Mae. Request that someone contact you regarding working with you and your current income situation, so that you can avoid defaulting or charging off, and can also continue to live / eat / pay other bills.

Keep in mind: Even the higher-ups are mostly interested in getting your money. However, they have the ability to set up your loan so that you can actually afford to pay it off, rather than having a default / charge-off, and having you live out of a cardboard box.

Currently, there is nothing "technically" illegal that Sallie Mae is doing, other than the FDCPA violations. They can, as a private company, charge as much interest as they see fit, and re-configure loans around based on their own profit rather than your personal interest. Unless they have multiple FDCPA violations, or violations after the cease and desist letters, there is nothing LEGALLY you can do against them. There *is* a class-action lawsuit brewing out of FL, which I'm a part of, through James, Hoyer (see my linky goodness section). If you want to be a part of it, call or email them very soon - they want all the documentation they can get, so be prepared to either make copies and mail them, or fax them over - letters, emails, all the loan paperwork, disclosure statements, everything.

As far as bankruptsy is concerned, well... It's a major gray area. In order to file for bankruptsy and include your private loan with Sallie Mae, you must do so under proof of hardship. No lawyer that I know of is currently willing to pick up the case, so you'd have to do all the legwork, paperwork, filing, and court stuff on your own, at your own expense... Here's the (darkly) amusing part: If you can actually AFFORD to do all of this, you're not in hardship, and therefore won't be able to qualify for a bankruptsy judgement on your loan.

The courts look on private (or signature) Sallie Mae loans as a "school" loan. Period, end of story. The Federal Government look on these same loans and says "same as credit cards, we won't touch 'em". So, those of us who ended up with a signature loan, and didn't get (or weren't) educated on what it was prior to signing the paperwork, are stuck. The only way to get rid of it is to attempt to consolidate it with a home or car loan via a bank, and make sure they over-compensate you for the amount owed to Sallie Mae - since it takes 30 days for the loan payment to post, and meanwhile your interest is still accruing (something they WON'T tell you, either).

So, that's the current scoop. I ask that you please use Mary Fetter's email address wisely. Do not spam or threaten, but utilize it with a business-like approach. It is tempting to go off the deep end, however don't sink to their level. Keep your dignity, and keep working on getting a fair shake at paying your loan off.


Monday, July 2, 2007

That's it, eh? We'll see...

Got a call from the person who was processing my refinancing. They said they had "great news", and that it was refinanced at the lower rate, to make my payments $311/month. I seem to remember something about $250/month, so this is still high for me... I'm going to be calling Mr. Firestein and finding out what's going on. That and I still can't get an answer regarding the two final loan disbursement payments that were done 6 months AFTER I graduated and left school - one for almost $9,000, and the other for almost $4,000. No one at Sallie Mae seems to know what they are, only that it's "obviously" something that was owed and now must be paid for... Sorry folks, if you can't explain what it was to the person you supposedly loaned it to, then I can't be responsible for it.