Student Loan Justice.org -- details abuses going on at Sallie Mae

[quiet.american]

Okay, this may qualify as more of a rant, but bear with me -- what's happening with student loan debt collection in this country is very serious, and it's so much under the radar it's not an issue that comes up very often.

The extortion tactics of Sallie Mae is financially enslaving people for their entire lives, all over the country. Many of the people who are telling their stories on studentloanjustice.org mention there's no way to get out from this except to die. That kind of talk should NOT be happening over a damn student loan!

After looking for the umpteenth time at my own inexplicable student loan balance, which never seems to shrink even though I'm making regular payments on it, and reading horror stories on MSM sites about people being abused by Sallie Mae collection agencies, I did some research to see what I could find out about what's going on and came across this site:

http://www.studentloanjustice.org

No one will probably be surprised to learn the usual Republican-donor types are involved, noses in the trough, literally squeezing the life out of people by blatantly adding on thousands of dollars in arbitrary figures to loan balances due, to the tune of profit in the hundreds of millions of dollars, which they promptly then reward themselves in salaries and stock options plush enough to LITERALLY bid on major-league sports teams. Albert Lord, the chairman of Sallie Mae, the largest holder of student loans in the country, has recently announced his plans to build his own private 18-hole golf course.

Where did he get the dough? It makes the blood boil.

excerpt:
Sallie Mae staff have given themselves extraordinary, staggering, obscene amounts of money in the form of stock bonuses. Since 1999, Albert Lord and Tim Fitzpatrick together, have extracted about $367 million in Stock options from the company. In Total, Sallie Mae has set aside $3.6 billion in stock for offering to employees since 1997.

more:

Albert Lord, who personally invested hundreds of thousands of dollars (on the books) to politicians and PACs involved with education legislation is probably the largest individual beneficiary. His compensation in 2000 was estimated by Washington Business Forward to be $2.3 million. However, in 2001, US News reported that Mr. Lords' compensation had skyrocketed to over $33 million. According to Fortune Magazine, Lord has made about $225 million in just the last 5 years, while his number two man, Tim Fitzpatrick (now CEO), has taken about $145 million. It is instructive to note that Albert Lord recently put a bid in to purchase a major league baseball team, the Washington Nationals, with the wealth he has extracted from defaulted borrowers.

more:
Majority Leader John Boehner tops the list: received $166,470 from Sallie Mae PAC

Sallie Mae has paid for the influence of many, many members of Congress. By way of comparison: Sallie Mae has spent vastly more money in political campaign contributions than its much larger counterpart in the home mortgage industry, Fannie Mae (almost twice as much in the 2004 election cycle)! Albert Lord, Sallie Mae CEO and his wife, Suzanne, gave OVER $250,000 to candidates and PACs in 2004 alone! A majority of the contributions have gone to members of the House and Senate Education committees, but Sallie Mae and Lord have spread their ill-gotten wealth around much wider than just these committees. This includes an additional $250,000 gift to pay for the 2005 presidential inaugural celebration. (Yes, a few Democratic names are on the list -- Tom Daschle and Dick Gephart are two, and they certainly did not receive the lion's share of contributions. In fact, it looks like they received token amounts, just in case Diebold didn't come through. The same token amount was also given to Shrub, however, the aforementioned $250,000 was also donated to Shrub to pay for the celebration of election fraud.)

Contrast this with a typical story of a student loan debtor:

I had $92,000 in federally guaranteed student loans from the mid 90's. I defaulted after I lost my job and had to survive as a single parent. I recently contacted Sallie Mae who holds my loans, and they told me to contact a company called GC Services out of Houston. They told me that I now owe $167,000!!! The representative at GC Services was rude and abusive and threatened everything that she could think of! I can't believe that these private companies are ripping us all of with the blessings of the Federal Government. This is outrageous and puts all of us into a bind with the "system". In fact GC Services told me that they would continue to ruin my credit rating, which keeps me from applying for many positions. This "robbery" has to be stopped. They don't care that they ruin people's lives and get away with practices that no other lenders are allowed to!

Anyway, if you're feeling the pain of trying to pay off an endless student loan, this site has good info and asks you to share your story with them, and make some noise with your senator/rep if you feel so inclined --

http://www.studentloanjustice.org

[HeeBGBz]

1. I was just bitching about my student loan shackles

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=364&topic_id=586046&mesg_id=591020

I'll have to check out this site. Thanks for posting.

[quiet.american]

2. Whew! Glad to know I'm not alone!

:hi:

Thanks for pointing me to your thread!

[Kansas Wyatt]

3. Corporate Government Store

It used to be known as the Company Store that people were indebted to and could never escape. Republicans have rewritten the contract that forbid the Company Store indentured servant / slave, and we have slowly slipped into a Corporate Government Store and have become indentured servant citizens. Which resulted from a merger between the Corporations and the Government, which enslaves the citizens of this nation for their alleged piece of the 'American Dream.'

Politicians do the bidding of their Corporate Masters, and are granted comfortable conditions, status, and terms. Some take advantage of this position, and even get a "legal" cut of the ill gotten gains and accept lucrative Board positions later on.

'We The People' no longer matter, and have been replaced by 'We The Corporations.' People are no longer allowed to own their lives, we are only allowed to rent our lives until death. The more money you have, the better life you can rent. If you are fortunate enough, you were born into wealth or were lucky enough to beat all the odds and become wealthy, then you truly can own your life and have a voice in the management of the Corporate Government Store. That is the ultimate goal in our "Ownership Society."

[quiet.american]

4. Well said. We are in an Era of Corporate-ocracy.

Confessions of an Economic Hitman really opened my eyes to the extent of it.

And it's almost too painful to read the stories on that site. My own pales in comparison -- so far.

[shanti]

9. wow

:wow: i checked it out, "confessions of an economic hitman" and was blown away! thanks for the tip! :thumbsup: quite an education...

[quiet.american]

11. Anytime! (Reading it was almost like taking "the red pill" for me). n/t

[Mnemosyne]

5. Thank you so much for posting this quiet.american! My

daughter has just gotten started at school and was asking about loans. Single mother, age 27, and it would be easy to take out loans to make life easier for now. I sent her this link.

It is nothing short of criminal.

[quiet.american]

8. :) -- Knowledge is power, as they say.

The thing is, if someone knows up front about what faces them in regard to these loans, I'm sure the incentive will be at least doubled to not fall into default, and to keep a careful account of their payment records.

[Mnemosyne]

10. That is what I am hoping. She is not the most

responsible when it comes to handling money. PTSD and shopping is her comfort. Loans could be a disaster.

Thank you!:hi:

[ObaMania]

6. Sorry, I ain't buying it.

I worked for Sallie Mae in collections many years ago. Under federal student loan guidelines and FDCPA, Sallie Mae cannot add anything onto the loan but the 6-7% interest the student originally signed for, or additional Forbearance interest that accrued while the student dodged their obligation with an optional extention of this type.

Sallie Mae is audited regularly by the Feds as well as the Guaranty agencies for each state who manage the student loan program for their states and review and pay the guarantee on defaulted student loans.

I refuse to read the site referenced because these are a bunch of whiners who think their education should be free. These are the hard-core deadbeats who have run through all the deferments and forbearances available to them (like 20 in all to the tune of 10 years), probably consolidated their loans, and now refuse to pay. At that point, Sallie Mae probably refers them to a hard assed collection agency who has every right to tag "their" fee on to the collections procedings, which could be somewhere up to 15-20% extra. It's not unfair.. just a fact of life. Any other type of loan will incur the same expenses should they be referred to external agencies.

Look, I've heard it all. The fundie ministers who said "God will take care of this bill for me", or the doctor with 100's of thousands in loans who threaten to kill themselves.. even the guys who went to truck driving school and their "cain't squeeze blood from a turnip" comment. Fact is, they borrow it, they owe it, and it is their responsibility. Just because they don't wind up in the field they go to school for is no reason to say they don't have to pay the loan(s).

I'll tell you. I hate that MF'er Lord and I was at SLMA during his corporate takeover.. even boycotted the day the then candidate *Bush* came to do one of his BS speeches (couldn't stand him then either). Even got laid off which makes me hate them even more. But I defend their right to the end to get the money they are owed. Kids and collegiates are ruthless and always looking for ways out of these loans. Maybe they weren't properly counseled on how important it is to pay these back.. who knows? You have to understand that the default rate for federal student loans is (was) like 5%. That's very low, and the complainers on that site are representative of a very small group of people who did not make the most of their edumacation. There's 95% dutifully paying their loans off and are quite happy with the opportunity to get the loans, and the service that SLMA has provided over their 10 year repayment period.

[quiet.american]

7. Don't agree, but thanks for your input. n/t

[ObaMania]

17. You don't have to agree, but...

.. next time you are at your haircutter or beautician, ask her if she has student loans. I bet you'd walk out with the nastiest coif of your life. :rofl:

[buckettgirl]

12. I have to agree with this post...

I graduate in May 2007.... my current student loan amount is around $30400, with one year left to borrow for...
We have to do entrance counseling, and exit counseling, and we can consolidate our loans and make one payment.
They make it very well known in the material on borrowing student loans that you can get a deferment or forbearance if something goes wrong... If you end up permanently disabled and cannot pay, they will likely discharge whatever remains of the student loan debt.
You cannot discharge student loan debt in a bankruptcy unless extenuating circumstances apply....
Anyone who borrows money for school knows this; if they say they weren't told, they are lying.
I agree that student loans must be paid back in most cases. Just because you didn't finish school or because you didn't get a job with your degree are no excuses.

[atommom]

13. Note that things changed in 1997 when the HEA was amended.

So the abusive practices are a fairly recent phenomenon.

[ObaMania]

16. Exactamundo!

It's the collection agencies they assign them out to. They are ruthless. Plus the agencies can pretty much set their own price where anything collected above and beyond the monthly payment or arrearage is money in their bank!

[quiet.american]

18. In this case, I DO agree! Maybe I misread your previous post. :) n/t

[Skidmore]

14. We tried to pay off my ex's small student loan ahead of time

once by sending many times the payment in at once, and they refused to send another bill to us until such time as they had taken off the regularly scheduled payments from that remittance one month at a time.

Years later I was able to pay off my loans early without a problem. I don't know what the difference between the two were, but I was worrying about being stuck with student debt for a long time as a result of our experience with his loan.

[ObaMania]

15. Paying ahead.

That's because of their servicing system. It didn't send monthly bills until such time as the next payment was due. From my days there, we were told to say that monthly billing was a courtesy and that we didn't have to send monthly bills (even upon request). If I remember correctly, we sent payment coupon books annually. To bring billing up to speed, an account adjuster would have to manually apply the payments and redisclose the loan to fake the system into thinking it was a "new" loan. Sounds easy.. and it is.. unless you are doing this for thousands of customers on a weekly basis.

I do remember though, that if someone called in and raised a big enough stink, that they'd generate bills for them.

Now the reason you were able to do it years later was because Sallie acquired USAF in Indianapolis who had a better servicing system that was able to handle these types of transactions without manual intervention.

[JPZenger]

19. 15% Rate College Loans through Sallie Mae

http://www.mcall.com/news/specials/all-a1_5loansmay22,0,5551147.story?coll=all-newsspecials-hed

The above is a link to an investigative report last year in the Allentown PA Morning Call. They found that a for-profit college, Lehigh Valley College worked with Sallie Mae to provide student loans with 15% interest rates to young students. The students said they could not afford to buy a car or a house in the next decade because of these back-breaking loans. Many of the students were quoted that they did not understand the terms. This was the subject later last year of hearings by a committee of the PA. House of Representatives.

The college then said they would no longer offer those loans because the high default rate made them unprofitable. By the way, the college is part of a large chain of for profit colleges which has been accused of a set or improprieties.

[Baconfoot]

20. GC Services abuses people

Before I paid off my credit cards I had a run in with GC Services.
Is there such a thing as criminal intentional infliction of emotional distress?

If there is then the tag team duo I spoke with several times on the phone are guilty of it, probably to the tune of hundreds or even thousands of counts.

All I will say is that if you get a phone call from these guys (it will probably be a phone call, not a letter first) the first thing you should do is call a lawyer or legal aid service right away and let them handle it.

The reason for the lawyer is so that you do not have to speak with these "people" and be abused by them.

The second thing you should do is probably to have all your outdated phonenumbers removed from your credit records. These jerks WILL call anyone you ever lived with and harass your family.

I must repeat: Do not speak with these people.
You might think their only goal is to get you to pay and once you offer to pay your entire amount in say less than three months that they will leave you alone. That isn't true. They will in some instances keep calling you and harassing you and your family until the entire amount is paid unless you have a lawyer intervene.

In my case the debt was less than 3k (I think that's right), so they will do all these things for chicken feed.

In retrospect, I should have sued.