WSJ says:

A Sallie Mae spokesperson told me that you can use money earned through Upromise rewards to help pay off your student loans. You can even have the funds earned withdrawn as a check. Then, the options are limitless. Roll it over to a charity of your choice. Give it in lieu of a gift card. Cushion your rainy-day savings fund — or get one started. Or, if you’re feeling brave, really put it to work by tossing the extra cash in an IRA or your 401(k).

Neat.

Some Help For Paying Student Loans [WSJ]
UPromise.com

Here's what readers said in previous rounds about why they hate these two companies...

Sallie Mae:

"Sallie Mae has a program with my university where they let you divide your tuition for a semester up into monthly payments. But they charge you a $14 service charge for any payment made with a credit card! The only free way to pay is to have it automatically taken from a bank account... and we all know how reliable that is. Needless to say, I don't use this payment plan anymore."

"I recently had to change my home phone number due to harassment by SallieMae and the collection agencies they sold a debt to.

Someone has a similar name to mine (only the middle name is different), and they have been bugging me for 6 months. Once I finally got SallieMax to stop calling, they sold the debt to someone, and now THEY won't stop calling.

Problem is, the new collector does not show up on Caller ID (shows up as Name Unavailable 000-000-0000) and they refuse to tell me which company they work for. "

"they have ruined the lives of many of my friends. They use scummy debt collectors, and are more than willing to garnish paychecks that are already too small to live on."

"Was SallyMae also the one that paid bounties to schools that steered loans their way?"

"

I pay my student loans on time but I still have a horrible time dealing with Sallie Mae for consolidations and other regular issues.

They outsource their customer service overseas. Financial aid is a complicated business that doesn't need to be further complicated by adding cultural barriers. I have no problem with accents, but I have a problem when the person on the other end doesn't understand the concept of "half time grad student in thesis hours."

They also cheated me out of my grace period, refused to tell me why and instead, just threw some economic hardship deferment forms at me to get me to stop asking.

Also, their marketing is insane. I was receiving consolidation offers even after I called to find out I couldn't consolidate until after I graduated!

Now that I'm in repayment I get bombarded by emails about their special programs and services. It's difficult to sift through the crap to figure out what is important.

They don't have to worry about customer service because once they've got us we can't go anywhere else and the government subsidizes them. "

"Way back when I was going to grad school, I decided to take the minimum amount of credits (all credit requirements already met) while working on my dissertation. Sallie Mae (or one of its progenitors) promptly started requiring me to repay my student loan. I called and asked how I could get it postponed. Their rep told me I had to become at least a half-time student. So I added a few more credits (at several hundred dollars a credit). The notices for repayment continued to arrive. I called again and was told being a half-time student didn't entitle me to receive a postponement. I told them I had been told otherwise by one of their reps. They said tough, they couldn't be held responsible for misinformation by their reps. Ended up my paying some $500 (a nice chunk some 20 years ago for a grad student) more than I should have. A really great organization. We're not responsible for any information we might give you."

"

Sallie Mae is terrible. My wife has student loans through them and while she was still in school, she was constantly bombarded by credit card offers, "deals" on MP3 players and TV's, car ads and freaking LIFE INSURANCE offers.

Now that my wife is out of school, I have begun repaying the loans. The latest thing Sallie Mae emails us constantly about is this thing called UPromise. Basically it supposedly helps you save to pay off your loans by automatically putting aside the change on debit card purchases (so if you spend $2.48, it would put $0.52 in your UPromise account). For me, totally unnecessary, but it would seem on face that this is a genuine program. That is until you really check it out and see that it's just another way to expose you to more ads imploring you to blow your money on anything BUT student loans.

On top of that, Sallie Mae will not automatically withdraw monthly payments from my bank account in excess of their preset payment plans. Surprise, surprise, all of their plans are as close to the minimum payment as possible with no indication that this will end up costing you thousands of dollars during the lifetime of the loan.

I understand they are running a business not a charity, but I just think it's sick the way they prey upon college students and recent college graduates. I would never consider them for any loan of any type ever again."

"I dislike Sallie Mae for the simple fact that they send me TONS of junk mail, even after changing my accounting settings and submitting a request in writing."

eBay/Paypal:

"In the early days, eBay used to be a flea market shopper's paradise. I could find one-of-a-kind items sold by honest sellers cleaning out Grandma's attic. Quality homespun niche businesses sold unique items not found in regular retail stores. Items were priced fairly and shipping rates weren't outrageously inflated. Shopping on eBay was fun, additively so.

In recent years, eBay has become an overpriced junk warehouse. Thirty sellers will auction the same "one-of-a-kind" item at a starting bid of $.01, with a bargain basement shipping rate of $24.99.

If anything is left in Grandma's attic, the heirs are selling it at double its value.

Retail chains have an eBay store that only sell merchandise the foot traffic didn't want.

Unscrupulous sellers bait customers in with low prices only to kick them in their Paypal buttocks with sneaky fee-avoiding, high shipping rates.

Paying is no longer your pal. The consumer protection process is so convoluted that by the time eBay gets around to denying your claim, the seller has already begun defrauding other unsuspecting buyers under a new identity anyway.

I used to be an eBay addict. I simply had to browse everyday just in case I missed that special item I didn't know I wanted. Now, it might be four times a year I find myself on eBay...and rarely do I leave having place a bid or purchased something.

Nothing exciting, nothing unique, nothing cheap (unless you are referring to quality). "

"Ebay is Just EVIL, They grew and grew off of their community, bought paypal, and are now Raising their Rates to up to 10% of the value of your listing! INSANE! Their saying its to "improve their website".... you need BILLIONS to improve your website? I WILL NEVER SHOP EBAY AGAIN after their recent fee changes, They stabbed every customer they had in the back"

"

I got scammed for a car that arrived with $2000+ of damage off eBay. The auction stated just $400 of damage. Paypal told me I was wrong without asking for my side of the story, or any estimates for that sake. That's enough for me.

A list of the damages stated in the auction: Cracked windshield, broken control arm, minor ding.

Actual (that I told PP about): Cracked camber, rims were scraped/spray painted, rear bumper was painted dark blue (the car was black), Cigarette holes in the back seat, larges holes on drivers side carpet, passenger side rearview mirror was missing, four flat tires.

And they told me that they sided with the seller and not to contact them. When I did I was told that they get many scams on cars from fraudulent buyers.

Boy wish I had the Consumerist back then "

"ebay/paypal no contest. They sent me a letter telling me that they weren't going to credit my account for a fraudulent failure-to-refund (mail fraud was involved) charge.

The first paragraph of the letter said they weren't refunding me.

The second said that Paypal does not support or condone fraud.

Hypocritical idiots, and I'm already working on closing my account (but paypal claims I need to wait for 4 months to pass since the last transaction before being able to close my account. I think that's bullshit).

BTW, I did finally get my money back from my bank. Suck it, paypal. (and I just tried again to close the account and it failed again, and the CSR who claimed he'd close it for me by phone the other day was apparently a liar)"

"EBay is full of scams. In my opinion, one of the more insidious is the hijacked account scam.

Phishers send out millions of emails - "Your eBay account will be suspended"; "There is a problem with your eBay
item", etc. Emails have a "click here to respond" button that asks you to log in.

And that's it. The scammers have a legitimate username and matching password! The account has been hijacked!

Shortly thereafter, up to three dozen one-to-three day listings of very expensive, usually sold at list price electronic, athletic or similar equipment will appear as if for sale by the hijacked account holder. Listings always say: "Email me here (not the eBay contact address) for shipping or buy-it-now or other information".

Those who email are given a spectacular price . . . perhaps 1/3 of list including shipping. They are told that they will receive a payment invoice through eBay's Trust and Safety or similar department and that the transaction is perfectly safe because it is approved by eBay. The seller asks only for name and shipping address.

If the potential buyer asks about PayPal, he is told that the seller's account is temporarily full; or there is a problem; or there is a divorce; or some other reason why he needs to deal directly through eBay.

Shortly afterward, he receives an authentic looking "invoice" from eBay and perhaps a second eBay email stating that they have investigated the transaction and it is safe.

The invoice asks the buyer to send the money by Western Union to somewhere in Europe. Once sent, the money is lost. Gone. Of course, the buyer never receives the purchased item because it never existed.

Everything in this scam is forged: the phishing email; the eBay invoice; the eBay verification letter. Nothing appears in the buyer's eBay inbox because nothing is sent from eBay's own server.

If eBay receives complaints about a listing, it will eventually remove it —- perhaps in minutes, perhaps in hours. During that time, the scammer receives email for potential buyers, some of whom will end of sending money by Western Union because the deal is just too good to turn down. The scammers never expect these listings to stay valid for an extended period; just long enough to get some people interested.

A few days latter, the same scammers return with new hijacked accounts and the same listings. Even the "email me here" addresses are the same.

This is a HUGE business. We are talking about $1,000 - $2,000 or more per transaction. In cash.

I believe eBay is part of the problem. They have no organized system to screen for obviously hijacked listings; they frequently leave the listings up even after complaints. More important, it is just too easy to list a sale on eBay. There is no secondary "sale only" password or other verification. Finally, even though these scams leave a mile long electronic trail (including having to show up at a Western Union office somewhere to pick up the money), eBay seems to make minimum, if any attempt, to shut them down.

In my opinion, eBay needs to stop saying: "we are only a venue" and start protecting its customers."

"Paypal freezes your money for no good reason. They regularly screw both buyer and sellers. They claim to have protections but the requirements are so convoluted its nearly impossible to get coverage even if you're trying to follow the steps. They take a huge chunk of the sale price in fees for doing nearly none of the work or risk."

"It isn't a transaction "on eBay". It is a scam that uses hijacked eBay accounts to make offers to people who send them emails. They try to make the buyer think that it is a legitimate transactionthat is approved and escrowed by eBay. Of course, eBay doesn't send out invoices; doesn't approve transactions; doesn't collect or escrow money. But to get a $3,000 computer, audio or other product for only $1,000. Wow! Just send the money by Western Union! Ebay will hold that money until you receive your product!

I understand that there are lots of scams and scammers; and lots of people looking for a bargain. But with very little effort, eBay could shut this whole thing down by responding instantly to reports; by making it harder to list sales (extra password?); and by using the law to go after the scammers."

This is a post in our Worst Company In America 2008 series. The companies nominated for this honor were chosen by you, the readers. Keep track of all the goings on at consumerist.com/tag/worst-company-in-america

STILL OPEN FOR VOTING: TransUnion vs Diebold, Best Buy vs CompUSA, DeBeers vs Verizon, Exxon vs United Airlines, Sony vs Ticketmaster, Comcast vs The American Arbitration Association

Sallie Mae has publicly apologized for a coding error, potentially affecting around 1 million customers, that caused some consumers credit scores to drop over 100 points, and some consumers report that their dinged scores are already back up. If your score is not back to normal and you are in the middle of a transaction where your good credit is at stake, Sallie Mae said it will provide a credit reference letter. You can also call Sallie Mae customer service at 1-888-2-sallie. Sallie has pledged that the fix is in, but consumers can still take matters into their own hands by pulling their free credit report from annualcreditreport.com and disputing the incorrect information with Experian. Note, it's against Federal law for creditors to report false information to credit bureaus, and consumers can sue violators up to $1,000.

PREVIOUSLY: FICO Scores Drop Over 100 Points After Sallie Mae Recode, Potentially Millions Affected

(Photo: Getty)

Sallie Mae offers a variety of loan repayment options. One of these is a graduated repayment, with low non-principal payments for the first few years, with the payments slowly getting bigger over time. Before, this loan was coded the same as all other Sallie Mae loans. Now Sallie Mae has added the comment "Arrangements made with credit grantor to make partial payments" to the graduated repayment loans. To the credit bureaus, this comment is a black mark; ConsumerismCommentary says that it means that, "Sallie Mae is reporting the your loan balance is fully due immediately and that your payments are behind more than 60 days." Reader Jules, a victim of the credit score downgrade, writes, "Hopefully if enough of us complain this can get fixed soon, and hopefully before my credit card company notices and takes an opportunity to jack up my rate since I no longer have excellent credit."

The error appears to be limited to Equifax for the moment. Posts later on in the forum say that Sallie Mae officials are aware of the issue and are sending an update to Equifax later this week with a request to change back to the old way of reporting.

For insight into how just a few points lower on your credit score can affect your life, read How Much Do Credit Scores Really Matter?

*new error in Sallie Mae reporting* WTH happened - why is FICO contradicting itself? Please help! [myFICO forums]

As for the 1.5% loan origination fee, students will no longer enjoy having that waived by Sallie Mae. The magazine says you should now start shopping around for lenders who are still willing to pay them (they suggest J.P. Morgan Chase).

"Sallie Mae Halts Student-Loan Consolidation" [SmartMoney]
(Photo: Getty)

I recently completed a 3 year enlistment with the US Army, and one of my benefits was the student loan repayment program. The Army paid off my student loans, 1/3 of the loan per year for three years, making payments directly to my lender, the infamous Sallie Mae. The first two payments were a month or two later than the Army said they would be, but still, free money, and I made the small in-between payments to keep the account current.

Then I finished my enlistment, was honorably discharged, and waited for the last payment to come in. It was 4 months late and when it got there (mid-December), it looked like it was $1500 MORE than what was left owed on my account. I called the Army and they confirmed that they had payed the correct amount they owed me, taking interest into account. The overpayment belongs to me. Yay, more free money!

Alas, no such thing...

I called Sallie Mae to see how they would handle the overpayment. They said a check would be sent to me about the third week in January and to call them back if it didn't arrive. Mid-February, the check has not appeared and I called Sallie Mae again. They said the problem may have been my recent address change and said they would stop payment on the first check and send a second one. It would take 3-4 weeks.

Late March, the check has still not arrived, and I call Sallie Mae again. Reading Consumerist pays off - I recognize that the customer service representative does not speak English as well as it appears and is using the "keyword" strategy...meaning she spouts phrases irrelevant to the situation I describe based on words she picks out of my description seemingly at random. I ask to speak to a supervisor, who surely must speak English better than the service rep did.

Sadly, he speaks better English than all three of the representative I had previously spoken to - since all of them had given me the wrong information. The check had never been sent to me at all. Since the overpayment was made by the Army, the money had been sent back to the Army. Simple company policy. Which not one of the service reps apparently knew about. The payment on the first check had never been stopped because the Army had already cashed it. No one at Sallie Mae though this might be important to tell me.

My $1500 has been with the Army since January, and I should have spent all this time trying to get the money from them. The supervisor declined to pay the interest on the money I could have been collecting all this time (sure a lender understands about interest and timely payments) but was very sorry. Suffice to say, Sallie Mae will never get my business again.

Heidi, Colorado Springs

In an apparent reference to investors' anger, he said: "I can assure you, you will be going through a metal detector." He ended the conference call by saying "Let's go. There's no questions. Let's get the [expletive] out of here."

Sallie Mae spokesman Tom Joyce called the metal-detector remark "an attempt at humor" and the expletive "an unfortunate slip of the tongue." Mr. Joyce said the call had been intended for Mr. Lord, in his new role, to give investors a "broad overview" of the company's situation.

Sallie Mae: Expletive Included [WSJ]
Full Conference Call Transcript [Seeking Alpha]
(Photo: Susan Biddle)

Current Pell Grants top out at $4050, but the bill will gradually increase that to $5400 by 2012. The bill will also temporarily reduce interest rates on need-based student loans from 6.8 percent to 3.4 percent over the next four years (the reduction will expire two years after that).

"Lawmakers to Cut Subsidies To Student-Loan Providers" [Washington Post]

RELATED
Department Of Education Busts Student Loan Party Once And For All
Cuomo Goes After Student Lending Criteria, Is So Not Bored Of This Investigation Yet
Private Student Loans Are Potentially Evil
Department Of Education Sends Warning Letters To 921 Colleges
(Photo: Getty)

Sallie Mae is both a lender and a debt collector, making profits on both sides of its loans. Last year, the company earned $1.2 billion and generated a lot of cash that makes it attractive to private equity buyers. Even so, some Wall Street analysts believe that it is a poor candidate to be saddled with debt because its business relies on razor-thin interest margins and the use of derivatives to manage its exposure to interest-rate swings.
... Currently, the company is carrying $142 billion in private and guaranteed loans on its books, about 27 percent of American student loans in the United States.

While 85 percent of its business is currently federally guaranteed, the company could also shift into the higher-interest and faster-growing market for private loans, which unlike guaranteed loans, is not subsidized by the government.

Sallie Mae itself recently settled a case with the New York Attorney General and will pay $2 million into a fund to educate students and parents about the financial aid industry. —MEGHANN MARCO

Sallie Mae to Be Sold for $25 Billion [NYT]

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.

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

Concerned that guidance offered to students is tainted by conflicts of interests, Cuomo's office asks schools to disclose if there are financial relationships with lenders and if any favors were offered to individual financial aid officers.

"My office is seeking to ensure that students are being steered toward lenders offering the most competitive rates, not those who offer the best perks to schools or financial aid administrators," Cuomo said in a statement.

"When making recommendations on how to make tuition more affordable, there must be absolutely no conflict of interest at the expense of students and their families," he said.

Spokesman for Sallie Mae and Nelnet separately said their companies are cooperating with Cuomo's office.

New York expands student lending probe [Yahoo!]

I was hoping that I could get my interest rate down and also my monthly payments down considerably. Not a chance. They even get belligerent if you dare trying to make payment arrangements. I even tried to send $600 one month hoping they would take it in good faith and they just sent it back. It's either payment in full, or nothing so they can charge you late fees.

UPDATE: Reader D, who seems like he knows what the hell he's talking about, suggests that those of you having serious trouble with the servicer of your loan contact the Department of Education via the FSA Ombudsman. 1-877-557-2575. D. says this may not solve the problem, but will provide an advocate.

Sallie Mae Is Ruining My Life!

Despite our best efforts to cast Target as an evil interloper, Walmart took the gold. Sprint barely beat Verizon by 18 votes, despite Verizon having such vaunted customer service. And in a surprise upset, the US government, despite not "officially" being a corporation, beat Enron by 169 votes! You go, girl!

We understand Tier 2 will be filled with trouncing. This is our first ladder we've ever made, sorry. While you were betting on basketball, we were touching ourselves.

Having eliminated all the lesser of two evils, Friday's shakedown for Tier 3, will be hot.

We're talking Paris Hilton hot.

In other news, NPR's Marketplace says they're going to interview us this afternoon about this poll. This will be a great way to reach all those execs and vp's who can't read the New York Times. We wonder if we're allowed to bring in our own sound effects.

"According to consumer affairs, ChoicePoint operates as a front for Data Mining for over 25 federal agencies." - mrscolex. His argument against ChoicePoint continues after the jump.

Sallie Mae: "The have a convenient history of "loosing" paperwork on in school deferments so they can double collect on fees from student loans." - Eusie.

Wikipedia entry for Sallie Mae.

Previously:

• Round 5: Jet Blue vs. Southwest
  
• Round 4: Target vs Walmart
  
• Round 3: Sprint vs. Verizon
  
• Round 2: H&R Block vs. US Postal Service
  
• Round 1: Halliburton vs. Monsanto
  
• Round 0: Competition Ladder

ChoicePoint. Check out their website at www.choicepoint.com

Looks all happy and friendly doesn't it? Smiling kids having fun. Thats exactly the image I think of when I imagine a massive database on every citizen of the united states.

ChoicePoint is one of the few companies that the government contracts for information on its terrorist databases among other things.

Where to start on a company like this? We'll start with an easy source, Google News

ChoicePoint leaked the records of 145,000-163,000 people back in October of 2004. The citizens who had their records leak didn't find out about it until Feb of 2005, and even then initially only the people who were residents of the state of California were notified per state law. (Everybody was eventually notified to the best of my knowledge)

In 2002 ChoicePoint willingly gave (choicepoint claims they were duped) records of more than 1500 individuals to a Nigerian businessman in california. I quote from the atlanta journal constitution: For at least two years beginning in 2002, Oluwatosin used cellphones, fake addresses and anonymous mail-drop boxes in the Los Angeles area to masquerade as a business owner and trick ChoicePoint into selling him access to addresses, real estate records, bank data and other details of consumers that ultimately led to millions of dollars in credit card fraud.

The funny thing is that most people don't even know that their records are kept on this Georgia based company's data system.

Recently, the FTC levied a 10 million dollar fine against choicepoint, and choicepoint agreed to set up a 5 million dollar trust for victims who may have lost money as the result of ID leaks from their systems. Fortunately, if you do the math on total possible number of people who have had their data stolen, you get a whopping 30 bucks per person. Thanks choicepoint!

At one point the TSA almost agreed to use the databases that ChoicePoint holds to do their security checks for flights, but the plan was scrapped after outrage that the government was trying to circumvent privacy laws.

But in June of 2005, that didn't stop the CIA from granting a contract up to 20 million dollars to ChoicePoint for batch processing of public records.

According to consumer affairs, ChoicePoint operates as a front for Data Mining for over 25 federal agencies.

So go take one last look at their happy website with the children dancing. Makes you sick doesn't it?