Sallie Mae Is Still Ruining Your Life!

Remember the guy who lost his job due to threatening phone calls from Sallie Mae? He found a new job but he still can’t really afford his student loan payment. Unfortunately, the advice Consumerist readers gave him last time didn’t work. He was not able to consolidate with ed.gov. He writes with an update:

The FDSL just sent me a loan cancellation letter. They have decided that they will only take federal loans now to consolidate and Sallie Mae is primarily a private lender, and that is what they report my loan as. What the difference between a federal guaranteed loan and what they consider a federal loan through a private company is beyond me.

The advice given to me to try ed.gov was unfortunately wrong, or somehow I didn’t say the right keywords when I applied so I was denied, even from the government. Or, as is to be expected, many still think that Sallie Mae is somehow a federal loan and I was given advice according to that assumption.

Anyone else have any ideas? We’re really worried about this guy. —MEGHANN MARCO

I Don’t Know What I’m Going To Do Now [Sallie Mae Is Indeed Ruining My Life!]

Comments

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  1. eightfifteen says:

    Years ago, I worked collections for Sears, and there are some serious rules that seem to be getting broken here.

    First off, if you tell Sallie Mae that you cannot accept phone calls at work, they must stop all communication with you while you are working. If they don’t contact a lawyer immediately.

    Second, contact a credit counselor. Technically, they don’t work for you, they work for the lender, but once you are in with them, creditors are supposed to stop contacting you. They will also be able to do something about the payment amounts. If they are reputable, they might even be able to help you remove the inflammatory remarks on your credit bureau.

    Third, if you are still struggling, bankruptcy may be your only hope. There are two kinds: Chapter 7 & 13. I can’t remember which is which, but one says you are off without any further responsibilities for the loan, and the other says that you agree to pay the loan back, but interest and contacts stop. Banks successfully made declaring bankruptcy much more difficult, and it does stay on your credit for seven years, so this is obviously a last resort.

    Good luck, and don’t despair. This kind of thing can, and does, happen to the best of us.

  2. rbcat says:

    This gentleman seriously needs to visit CreditBoards.com and get advice from their forums. He has accumulated a stack of Fair Debt Collection Practices Act (FDCPA) and Fair Credit Reporting Act (FCRA) violations that would make virtually any contingency fee lawyer drool. Each time Sallie Mae discussed the specifics of his debt with any third party is a violation, payable to the tune of $1,000 each. There is even a provision for additional damages if they were notified not to contact him or his employer, and they continued to do so.

    This IS something he can fight without an attorney, but it will consume a lot of time. The most powerful letter a debtor can send is called an “Intent to Sue” (ITS) letter, and it will get their attention. The FDCPA and FCRA violations will likely only offset what he owes Sallie Mae, but it will help, and could get substantial portions of the fees and such that were tacked on reduced.

  3. Yoni K says:

    since these aren’t FEDERAL student loans, isn’t bankruptcy an option? It sounds harsh, but you’re credit will be back on track WAY BEFORE you would’ve finished paying off the loans.
    Plus, you get to screw Sallie Mae.

  4. QTex says:

    “since these aren’t FEDERAL student loans, isn’t bankruptcy an option? It sounds harsh, but you’re credit will be back on track WAY BEFORE you would’ve finished paying off the loans.
    Plus, you get to screw Sallie Mae.”

    Student loans cannot be discharged through bankruptcy. Bankruptcy Code § 523(a)(8). (11 USCA § 523).

  5. kwamie says:

    You can’t get these loans discharged by declaring bankruptcy. I declared bankruptcy in 2005. And I owe way more than this guy does in student loans.

  6. Ass_Cobra says:

    While people are correct that you may not have any Student Loans discharged in bankruptcy (save for undue hardship) there may be some point to filing in. You could challenge the enforceability or balance of the loan in a bankruptcy proceeding.

    Also the maximum amount they can garnish is 10% of your after tax. Seems like quite a bit, and you won’t get credited for paying on time, but hey at least you know the max amount they can extract from you.

  7. RichAndFoolish says:

    Get a consolidation loan on Prosper.com.
    If you have a workable budget and a good story, you’ll get a good rate.

    If you have no scruples, you can even steal $25K with no risk greater than an additional black mark on your credit!

  8. QTex says:

    @RowdyRoddyPiper:

    I think you’re right that there are a few benefits to filing for bankruptcy protection. Although I’m not sure about the 10% garnishment cap (in my experience, garnishment is usually handled under state law), he would additionally get the automatic stay to prevent Salle Mae’s collectors from bothering him–at least until final disposition of his case.

    But in my opinion, the problem here is that the benefits aren’t going to be worth the costs–at least not based on my experience in bankruptcy practice. Sure he can challenge the principal amounts, but what is the chance there will be a true discrepancy there? And there’s nothing in the facts to indicate he’s getting garnished now. And like I mentioned, I think he may have more protections against a garnishment order under his state’s law. As for enforceability, I think he would be hard pressed to find a good reason as to why the debt is unenforceable.

    Bankruptcy can be expensive and without a discharge at the end of the tunnel, he’d just be worse off financially. At least, that’s my take on his situation regarding the bankruptcy option.

  9. Spider Jerusalem says:

    It’s a little funny that maybe a week before the original story broke, my enrollment counselor at my post-grad program told me NOT to choose Sallie Mae as a lender, because she had gotten so many complaints about them.

    Not funny ha-ha. More like funny horrible.

  10. -J- says:

    Thanks for the information guys. Unfortunately bankruptcy is out of the question. Even if I could afford it. Student loans, and in particular Sallie Mae student loans are not contestable or eligible under bankruptcy protection. Sallie Mae has paid off many congressman to see to that.

    All that will happen is exempt me from being able to get any sort of loan or credit for 10 more years, plus the defaulted student loan. Rather than just a defaulted student loan.

    I am not in debt in any other avenue on my credit. Previous to this fiasco, I had perfect credit. I have always bought just about everything with cash (short of a used car back when I turned 18 and then paid it off after only 9 months). All cars since then have been bought with cash. (by choice, although now I have no choice)

    The one big loan I did get, expecting to take advantage of smaller payments over a period of years “like everyone else” so I can make a life for myself “like everyone else”, and foolishly thinking it was a “safe” loan because it was for school, has nearly killed me.

  11. -J- says:

    Give her a huge hug spiderjerusalem. Seriously. She may have saved your life!

  12. snobum says:

    I had about $70k worth of student loans (mostly private loans) coming out of school and was looking to lower my monthly payment. I was able to consolidate with a company called Education Finance Partners (I never heard of them either). Not only did I get a lower rate on my loans, but it stretched my payments out over 30 years, so I can pay more when I can and pay the minimum when I can’t.

  13. QTex says:

    @-J-:

    Hang in there, -J-. Sorry I don’t have advice on what you should do. Unfortunately, I don’t know that you have any real legal options.

    I know a few people who are hiding out from their student loan lenders, but it’s a rough road.

    Good luck to you, and I guess you can take comfort in the fact that at least Sallie Mae can’t throw you in prison.

  14. Josh Smith says:

    When You look at the loan in your Sallie Mae online account does it say federal sub, or federal unsub?

    If so then it is federal, if it lacks the federal tag then your stuck with a private loan, which can be a pain with interest rates.

    We are tyring to move my wifes federal loans away form Sallie Mae right now, they are refusing to send the payoff amounts to Wells Fargo(good rate with cosigner and good borrower benefits). One rep went so far as to say Sallie Mae won’t allow a consolidation to Wells Fargo.

    We have contacted our local news channel’s call for action. They suggested we contact our congressman and a lawyer. They mentioned many places have income based legal aid.

    We are hoping we can fax the payoff amounts to our consolidating companies since Sallie Mae refuses to do so. Sallie Mae also refuses to send payoff amounts on federal loans to AES. Isn’t this all illegal?

    I keep a log of our actions and of any dirt I find on Sallie Mae at http://www.imjosh.com/salliemae
    It is handy to have a record of our actions at our fingertips and if it steers one student away form Sallie Mae its worth every minute I invest.

  15. northwest says:

    In the case of private loans (not issued under Stafford or such program), Sallie Mae has managed to secure all the legal benefits of being an issuer of student loans without having to provide the protections that federal law provides for federal borrowers. As noted above, this is a political issue and can only be remedies by going through the political process. Fortunately, there are some people out there who are trying to do things about this. I’d suggest checking out Student Loan Slave (http://studentloanslave.org) as one good starting point. Also, don’t be shy about calling your Congresscritter. You may be lucky and find one that isn’t taking Sallie Mae money and still has a soul left.

    One note to the person who wisely avoided Sallie Mae: you’re not out of the clear yet. Sallie Mae has a habit of buying up loans from other lenders, regardless of whether you want them to or not. You may get a letter one day saying they are your new servicer. If you have federal loans, avoid the hassle and consolidate them with Direct Loans. They are the federal government servicer and they have been a pleasure to deal with. It’s a clear lesson about capitalism – some things should not be subject to profit motives.

  16. -J- says:

    By the way, a big thanks to you all and especially consumerist.com. Thank you guys so much for what you do.

  17. synergy says:

    I’m not sure what may have changed, but I had all federal subsidized loans with Sallie Mae and consolidated them all to Direct Loan Servicing (https://www.dlssonline.com/borrower/BorrowerWelcomePage.jsp ) in Nov 2002. I had zero problems. I just gave them my info and they took care of handling Sallie Mae.

  18. -J- says:

    “Sallie Mae also refuses to send payoff amounts on federal loans to AES. Isn’t this all illegal?”

    Unfortunately, they are under no legal obligation to respond to a payoff request. That was the one “gotcha” I thought I’d run into with Sallie Mae initially when I applied for the Federal Direct Loan to consolidate my loans. They exploit this in the lack of there being a law. So it is not against the law per se, but one is just not made yet. So you pay how they want you to. That is the bottom line.

    The loan is a Federal Guaranteed Loan, sold as such, with no initial indication that it is really a private loan. What federal guaranteed loan means is that the word “Federal” is capitalized in the sentence to make is seem like it’s part of the federal government, when all it is, is that if you default they collect 125% of the current loan amount from the government while being able to also garnish your wages, take your tax returns, Social Security Benefits, and prevent you from being able to go back to school and get any other degree in the future.

    The scary thing is, after all this time, and after being on here twice and speaking to many others, not one of them have been able to resolve it. Or “get out”. Not one.

  19. mac-phisto says:

    go back to school…or join the military…or get a job that has student loan forgiveness. that’s all i got.

  20. mac-phisto says:

    ok, just read your response…so going back to school is out.

  21. emax4 says:

    I’m sorry to hear that our advice didn’t fully solve the problem (gosh, I sound like one of THEM now.. haha). Forgive me for asking, but if the loan was a private loan, would it matter if it was a student loan? If it doesn’t make a difference then I don’t see why bankruptcy isn’t an option. But now that you’ve got a job/career, maybe you can look into another loan with a lower interest rate to pay off the Sallie Mae loan.

    Hopefully you were able to get a cellphone by paying a friend and getting it in his or her name, then paying your friend for the cellphone bill.

  22. drrew says:

    It is absolutely illegal for any lender of a Federal Student Loan to ignore a loan consolidation request.

    The lender has ten days from receipt of the Loan Verification Certificate to reply via mail or fax.

    The reason you weren’t able to consolidate through Direct Loans (ed.gov) is because they added a requirement to their consolidation program that they had to already own at least one of the loans being consolidated.

    Two of the larger non-Sallie Mae/non-Direct Loan consolidators are AES and Next Student if you’re looking for someone else.

    However, if your loans were not Federally guaranteed, you’re not eligible for any of the traditional consolidation programs and unfortunately, the only large lender in the field that regularly consolidates private loans is…..Sallie Mae.

    Good luck.

  23. drrew says:

    re: emax4

    Any loan made for ‘educational benefit’ is not dischargeable under standard Chapter 7 Bankruptcy without proving undo hardship. It can be a Federal, private, or institutional, doesn’t matter.

    If any attorney’s are bored, you can look up University of Washington v. Rufino for the precedent.

  24. Hexum2600 says:

    Holy schnikes! 1100/mo ?!? I have about 50k in debt, and will be graduating this year. Using the payment predictor on Mohela’s website, and doing an extended (ugh) repayment plan, i will be paying $315/mo… $230 or so if i have them auto-debit it. So how much did he owe and what was the freaking interest rate???

  25. TechnoDestructo says:

    So you can’t get rid of a student loan through bankruptcy…what if you have another major creditor, like a mortgage or something? Someone who COULD be hurt by you going bankrupt? Would other creditors be able to do anything to help you force Sallie Mae to stop turning the screws? Or to screw them in return?

  26. zolielo says:

    @mac-phisto: I was thinking military as well. Army or Marines for the most aid…

  27. zolielo says:

    Oh and go officer if you can.

  28. -J- says:

    “It is absolutely illegal for any lender of a Federal Student Loan to ignore a loan consolidation request.

    The lender has ten days from receipt of the Loan Verification Certificate to reply via mail or fax.”

    I am sorry, but you seem to have misunderstood. It has nothing to do with a Federal Student Loan request being ignored. What is being ignored for one of the other posters here, and has no law preventing it from happening, is a payoff request sent from the company they are consolidating with, to Sallie Mae.

    They have been trying to consolidate for 2+ years as I understand it. Sallie Mae has chosen to ignore it. All the company who they are trying to go with can do is send another request after 30 days.

    My initial fear was the above when I tried to go through Federal Direct Loans. However it seems my fear was for naught because for me it didn’t matter anyway.

  29. -J- says:

    @Hexum2600

    If you have time, please read all that information contained on my website. The original amount was $38,000 was the original loan amount after initial fee’s, as what I thought was supposed to be 9% interest rate but the reason it is so high, and principal is now $70,000+ is contained at my website starting with the first article at the bottom.

  30. TaxChick says:

    I just paid off one of my loans with SM. Yes, she is a royal PITA, but not if you pay on time and the minimum amount. I even consolidated through them and it was easy and painless.

    The fact of the matter is, you need to pay it off. Pay as much as you can. Bankruptcy is not an option.

    Joining the military as an option? How about just pay your bills? Sorry to be harsh, but this guy says on his blog himself that he has a good paying job. Cut your expenses, get a second job- you have to do what you can to pay your bills on time. Paying bills is not that hard of a concept. You have an education (obviously, or you wouldn’t be in this mess) – use it.

  31. Justinh6 says:

    I am in ALMOST the same boat as this guy.

    Sallie Mae is the absolute devil.

    When I was going to college, I had no idea, and just signed away thinking I would have a modest student loan payment that I would be able to afford.

    I recently consolidated my loans to another company but they only take certain loans. They do not touch PRIVATE loans, which Sallie Mae is.

    So my one loan is 2.9 percent, and the payment is 94 dollars.

    The sallie mae loan is 11.9 percent, and the payment is 230 dollars plus 140 dollars per month (there are two loans), so its 370 a month just to sallie mae.

    The day after Christmas, I had lost my job and was nearly destitute. I called the first lender (not sallie mae), and told them my story. They had me fax them a copy of my unemployment papers to them, and they called me back.

    They said they would pay the interest on the loan for 9 months, and they would defer it for 9 months, and I wouldn’t pay a dime.

    Then I called sallie mae. The rep on the phone told me that I had to pay a surcharge of 150 dollars, and I had to pay it right now to get the loans deferred for 6 months. The juice would still run on the interest over those 6 months. I had to give the girl a credit card over the phone to get the loans shut off.

    And that was 150 dollars that I needed for groceries.

    Can someone help me reconsolidate about 18,000 in private loans to an interest rate under 10 percent?

    Thanks,
    Justin

  32. shari says:

    Write to your congressperson? I’ve heard other people have success with this approach, so who knows? It couldn’t hurt. You could also try writing to your local newspaper. Sometimes our paper’s columnists write a human interest story about some person who’s struggling or being treated unfairly, and shining the spotlight on it sometimes makes good things happen. Since you have the website already you could just summarize your situation, make the request, and send them the URL.

  33. automatic_blue says:

    Although there’s not a lot that a private attorney can do when dealing with student loan issues, you still are able to stand on your rights under the FDCPA.

    Companies collecting on student loans have a lot more leeway, mostly because they have a lot more recourse.

    BUT, they still have to follow the law…

    Sallie May, if they are acting in a capacity as an original creditor, is not going to bound by the FDCPA.

    However, there might be laws in your state that allow you some recourse against an original creditor.

    Contact someone local at http://www.naca.net and explain the situation to them. Keep in mind that even a successful lawsuit isn’t going to get the debt to go away, but it might make them more willing to be agreeable in dealing with you at the end of the day.

    Also, contact your state AG office and the FTC – if Sallie Mae is using their position as original creditor on federally-guaranteed loans to circumvent consumer protection laws, that should make the light of day.

  34. -J- says:

    @TaxChick

    There are always one or two of you who are “harsh” and say “pay your bills” without really reading anything.

    You said it yourself “…but this guy says on his blog himself that he has a good paying job.” when a large part of the issue is that I in fact do NOT have a job and mention that almost EVERYWHERE on my blog posts. Why is that? well that too would be explained had you read before making a comment.

    I’m sorry TaxChick but your “advise” is non-advise.

  35. I second many of the above suggestions, including:

    -reputable loan consolidation places (non-profit) that can turn the screws on Sallie Mae and help you get that debt “consolidated” to someone who’ll work with you.

    -Call the state AG

    -Call your Congresscritters; student loans are being looked at on Capitol Hill and Sallie Mae horror stories have come up in some of the committee testimonies. (Your statehouse reps might also be helpful.)

    -Call local media. They love “consumer gets screwed” stories.

    -For anyone else with Sallie Mae problems, and if possible, I’ve had an EXCELLENT experience with Citibank Student Loan Corporation and I reccomend them as an alternative. My husband is with Sallie Mae. They suck AND blow. Citibank is clearly in the business of helping me pay off my loans. Sallie Mae is in the business of wanting to make it as difficult as possible in the hopes we screw up and then can slam us with penalties.

    -J, you said you can’t go elsewhere because you need a co-signer. I’m sure your parents don’t want you suffering like this — if you can get a decent place to take the loan, like Citibank, TAKE THE COSIGN. Stretch out the payment term to 30 years and you shouldn’t have to worry about missing payments. Then you can reconsolidate when interest rates drop again and maybe pull the term in to 15 years or so. We started with $130,000 in student loans and on the 30-year plan our payment was about $750/month. With $70,000 you ought to be able to get around $500 to $600/month even with shitty interest rates.

  36. Oh, by the way, permanent disability DOES discharge student loans and mental illness that prevents you from working IS a permanent disability.

    So worst comes to worse, if Sallie Mae does drive you into depression so awful you can’t function, then you don’t have to pay them. But you have to live on social security.

    I also had a friend who fled the country. That works too, as long as you don’t want to come back.

  37. J, what state are you in?

  38. Ran Kailie says:

    Isn’t sallie mae one of the companies under federal oversight? Write to your local Representive requesting aid in handling this situation given its obvious that Sallie Mae is unwilling to work with you.

    Like the person above said, the fed is looking at Student Loans right now and congressmen can also get pretty far in strangle holding these companies.

  39. -J- says:

    I am now in Pennsylvania. I have no parents unfortunately to be able to get a co-signer. Even if I did, putting their home in jeopardy isn’t something I could sleep with either.

  40. joshwinn says:

    http://www.collegeloan.com I used to work there a couple of years ago. They consolodate both direct Federal loans and FFEL loans.

  41. RulesLawyer says:

    my monthly payment would still be $1,100/mo

    Compared to $3300 per quarter, wouldn’t signing up for classes at a cheap community college, for life, be a less expensive option?

  42. automatic_blue says:

    If Sallie May is acting in their capacity as an original (first party) creditor, the FDCPA doesn’t apply, unfortunately.

    If your state has fair debt collection laws that might be your first start for some kind of recourse.

    FCRA is a reasonably new law and you’re going to be hard-pressed to find an attorney in your area who’s well versed enough to take such a case, especially against a student loan lender.

    Like I said, there’s not a whole hell of a lot that a private attorney can do (or will be willing to do) with this set of facts.

    Doesn’t mean give up the ghost, though. http://www.naca.net lawyer search is your best bet for a contact. At least start talking to SOMEONE besides the internet.

    Unless these creditors are stating their income based on (likely uncollectable) debts that they are owed by consumers, they’re not trying to drive people into defaults and interest. On paper, they might be owed 60,000 dollars but if they’re driving people into default and making it impossible to repay, they’re not seeing any of this profit. It’s possible that with the right leverage they’ll be willing to come up with a payment schedule you can live with. 10k in 10 years is better than 50k never.

    Then again, mabye I’m vastly, horrendously wrong and these guys are recording record profits based on inflated debt that will never get paid off. In which case just duck and dodge them until the entire damn thing implodes….

    My advice? Keep bitching until someone can step in and help out.

    http://www.naca.net might be a good start, but it’s unlikely you’ll end up the client of an attorney over this. A naca member might be able to give you some good advice or references, however.

    – Bud Hibbs (www.budhibbs.com) is a good contact.
    – Tom Martino (google it)
    – the FTC
    – state attorney general
    – state and local congresscritters, as someone else has pointed out.
    – the media, possibly
    – credit counselors or financial planners are certianly an option, but do some research before you end up working with someone – a lot of them are basically just front companies for the same bad guys.

    Shame on you piping up with “PAY YOUR DEBTS”

    These guys are willfully circumventing federal law based on what essentially is a loophole. They’re not playing fair. Hopefully you never run into a bit of financial trouble and end up having to deal with abusive debt collection practices.

  43. Theseus says:

    For folks who have a decent income and are looking to consolidate and/or pay Sallie Mae to get off their back, depending on loan size you might want to consider Prosper.

    I see a lot of similar loan requests being fulfilled on there at 9-13%, and within a system that sounds a lot less heinous that SM.

  44. -J- says:

    If it were not for this Sallie Mae thing, I would be completely debt free. Not many could say that. While I wish I could, as I mention at my website, the one debt I actually took on has nearly killed my hope of ever being able to do anything in this life.

  45. -J- says:

    Prosper only works if you live in a state where you can get up to 30% interest in loans. I happen to live where the max is 6%.

  46. TaxChick says:

    Well, J, maybe my “advice” is non-“advice” to you (quotes added intentionally because it is not “advise”, its advice) but it has served me well. My student loans were at 2.75% and are paid off. My advice to you is to seek some legal representation. Many of your statements are blatantly false for PA, the maximum interest rate being one of them, as there are many exceptions to the 6% max.

    And to the poster who said shame on us for saying pay up, Sallie Mae may be a beast, but it is amazing how so many other people don’t have these heinous experiences with them. It is our jobs as consumers to be smart enough to read the fine print when we sign up for loans like these. Thinking that they will be honorable and spell everything out clear as day is naive.

  47. TaxChick says:

    Forgot to add, J, you are correct. I was linked to another blog from your blog when I saw the job comment. Sincere apologies.

  48. Another site dedicated to Sallie Mae: Sallie Mae Beef

  49. -J- says:

    TaxChick,

    None of my statements are blatantly false. Perhaps you made an incorrect choice of words? How about I correct it for you since you are so inclined to correct spelling for some reason:

    “Many of your statements are possibly false for PA,”

    Now with that you also say there are supposedly many exceptions to the 6% max yet do not cite any sources.

    One source I can cite for you which makes a possibility such as prosper.com not possible is at prosper.com. http://www.prosper.com/public/legal/states_and_licenses.as

    While I wont come right out and call you a liar here like it seemed you called me by your original wording, I am willing to find out if there really are any exceptions to this, of which I have not been able to find.

    And just like the other “one or two” I mentioned above, you do nothing but presume that no one else is going through this, and just because a company isn’t forthright with how they manage their loans and contracts it is my fault somehow for their bait and switch tactics.

    It is our job as consumers to enforce our buy power to prevent companies from abuses such as these. Not bend over and take it if we don’t happen to have a perfect knowledge about the company we are seemingly forced to do business with to reach an innocent goal of getting an education.

    Sitting down and doing nothing just because it hasn’t happened to you is selfish and lazy.

  50. zolielo says:

    @TaxChick: “Joining the military as an option?”

    I seconded the original suggestion for joining as an officer in the Army or the Marines can provide a significant signing bonus, fair pay, and contractual term employment. With living lean in the military the loans could surely be paid off in a matter of years.

  51. willy_wonka says:

    Try Nelnet; I consolidated my federal loans through them and they’ve been wonderful. You can see if you’re eligible for private consolidation through them here.

    If you’re not able to find anyone else to consolidate through, you really might want to consider seeing a debt counselor. I’m so sorry for all that you’ve been through!

    PS-
    BOOOOO TaxChick. You’re MEAN.

  52. Drello says:

    “I also tried posting the following message on your website J*

    Have you thought about contacting your guaranty agency? When a student loan is processed through the Federal Family Education Loan Program (which is the program you went through), a guaranty agency will oversee the life of the loan. If the borrower defaults on the loan, the claim is then sent to the guarantor. All guaranty agencies work with borrowers to avoid default or, at the very least, give advice on what the borrower should do. It is probably the best place for advice without getting yelled at by the lender or being ignored by the government. They also work with the Department of Education’s Ombudsman Office if you should choose to file a complaint.

    Try looking on your copy of the Master Promissory Note to see who the guarantor is. If you don’t know, try contacting you financial office from school which should provide you the information. In reading the previous post from users, it appears that your guarantor is likely to be Pennsylvania Higher Education Assistance Agency (PHEAA) or you may be more familiar with the American Education Services (AES), which is a division of PHEAA that handles these situations. Try http://www.youcandealwithit.com/cant_pay_student_loan/inde

  53. jboise73 says:

    Lets get some misconcepts out f the way here 1st.

    “First off, if you tell Sallie Mae that you cannot accept phone calls at work, they must stop all communication with you while you are working. If they don’t contact a lawyer immediately.”

    This is not true. SAllie Mae trying to collect their debt is of the 1st party. The laws only apply to 3rd party debt collection agencies. I am not saying that I condone thir practice of what they are doing, it is not illegal.

    “Second, contact a credit counselor. Technically, they don’t work for you, they work for the lender, but once you are in with them, creditors are supposed to stop contacting you. They will also be able to do something about the payment amounts. If they are reputable, they might even be able to help you remove the inflammatory remarks on your credit bureau.”

    This is also false, a creditor does not have a contract with the conselor, and no they do not work for the lender, they are a 3rd party that the debtor brings in to help them with the lender. The lender does not have to work with them. Ultimately the responsibilty of the debt is the debtor and a credit does not have to work with anyone else. In the lenders best interest to get the loans paid off they should do what they can to get the debt satisfied.

    Don’t think I agree with collection practices, Just we need to know the truth and the laws. They are sometimes misguided.

    If this loan is not federally backed, i don’t see a reason why the debtor can’t file banko.

  54. justelise says:

    You could always go back to school part time and get the loans deferred because you’re in school (I don’t know if it applies to private loans but with Federal loans you can put your loans in deferment while you’re in school) and continue to send payments while the loans are deferred to get the amount of debt down. They have to stop collection efforts if the loans are deferred.

  55. zingbot says:

    I have some questions about two parts of this:

    How have I avoided EVER having my credit checked on application for employment in the 10 different places I’ve worked/applied? Is this a specific industry thing? I’m on the creative end of things.

    I also don’t get the multiple loans thing. I had 10 Direct Loans consolidated to Sallie Mae into 1 loan, mostly because I couldn’t take the paperwork and multiple checks. Why did they make this guy do 5 loans?

  56. tunatofu says:

    All this talk about fines and lenders paying schools or states – what about ME? How do I get back the overpayment -I- have made? After all, its MY MONEY!! Also, there is supposed to be a “class action” suit on borrowers’ behalf EXCEPT…Where do I sign on to get my money back? Nobody has contacted ME and Sallie Mae certainly isnt posting anything about any of this on their web site or sending out e-mail or paper mail notices. If all these “concerned” groups are going to invoke my name (aka “borrower”) and use MY situation to launch lawsuits, then surely I should get a cut of the money -I- overpaid!!