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Sorry if this is long but I just had to write. Something needs to be done. Looks like there are more of us in the same boat. My loans had originated back from 1991. When I left school in 1996 I had taken out $41,000 in student loans. First 2 years I had trouble paying being that I was just reentering the work force, single with 2 small kids. I had to deferred my payments with Sallie Mae. My boyfriend and I was finally starting to be able to make payments which we did for 2 years solid. At this time the company he was working for dived leaving us looking again. But we were still okay at this point and still making our payments. We bought a laundry mat that was determined had fraudulent profit margins. We went to court, won and the person that we sued bankrupt on us leaving us out of all the money that we had bought the place with. We then had to file bankruptcy ourselves - of course student loans were not covered. We lost our house and had to rebuy a singlewide trailer. (for a family of 5 - had a baby in 1999) My husband also at this time decided that he would stay at home to take care of the baby so he wouldn't have to be placed in daycare. Here is where things start to go downhill. We tried to keep up making payments but it seemed as Sallie Mae knew more about our income than we did. They kept being unreasonable. My husband kept begging them to please come down on the payments. Then in 1993 a couple of SM employees told us the same as they told you. The instructed us to do nothing, do not make payments, do not answer letters, do not answer calls ect and the DOE would come in and take over and give us a payment we could afford and we would be on the 25 year deal. Well, we didn't receive and letters or phone calls and then in 6/04 I receive a call from GRC (actually harassed) saying that I owed $20,000 on $6,000 of the loan. I asked the lady to not call me again at work because it was against the law and she said that it was a government loan therefore she could call me or my employer anytime she wanted. My husband took over and called them - we were then advised to consolidate through DOE. We filled all of the paper work. Only 2 out of the 11 were picked up. I called to see what happened. Apparently Sallie Mae handed the other 9 back to Oklahoma Guarantee Student Loan. I called and got my loans to send to DOE. OGSL then sent me a letter stating that I owed them $35,000. I sent in the loans to DOE. That opened a can of worms there. OGSL knew then that I was trying to consolidate and within 1 month I received another bill stating that I owed $53,000. We had to resend the consolidated form to DOE 3 times to finally get OGSL to fill out the form to send back to them. Boom GRC just made $14,000 and OGSL just made $18,000 off the government and left me stuck with a $73,000 bill. Also just before OGSL (being nice at the time) had told my husband that he shouldn't add his loans to mine (not very much) because DOE would take that into consideration that we were the same family with the 1 income. Wrong again. DOE has taken what is considered the maximum payment for a family such as mine and doubled it because of our loans being separate. This whole thing has gone out of control only because they know that they can get away with it and we has the loan holders can do nothing about it. It just sickens me.
I borrowed a total of about 30,000, in the late 1980's, and when the loans defaulted the banks just waited in the dark to pounce. I believe that it is a pre-meditated practice to allow students to default, then wait quietly until years have passed, then find them and attach their wages with ridiculous and unregulated fees. It's not the debt that I mind repaying, (which, by the way, will be paid off when my SON enters college), but the abitrary fees that the banks were allowed to charge on defaulted loans.
When all is said and done I will have paid more than 100,000 on the original loans.
It is criminal, and it has taken me YEARS to recover my damaged credit. We actually moved out of the country for two years so that we could live cheaply enough to pay down our debt.
1. Students entering college need to be educated on the dangers of taking on studen loan debt. They need to understand what is interest, and what is compound interest. They need to get some information about PREDATORY lending. Informed students will make the right choices.
2. Banks should not be allowed to sell off student loans and charge arbitrary fees, which can then be capitalized into the principal. Student loans should not be LOW interest, they should be NO interest.
My children are receiving an education from me about banking, credit cards, interest and loans. My 11 year old is in charge of the electric bill. He knows how to write a check, and he knows about credit cards and compound interest and fees. Before my children graduate from high school they will have a checking account and credit cards which they will have practiced on for at least one year under my supervision. I will not send my kids to college without educating them about the dangers of predatory lending.
Banks are the only winners here. Those of us who were stupid enough to borrow and default are nothing less than indentured servants to the banking industry.
5 original loans (Perkins, Stafford, SLS): $14,780 from 1989 to 1991-
Consolidated into 1 loan in 1996 at amount of $18,994.
Current amount owed as of January 2006:
$38,981-Held by NELNET Corp
Current amount owed as of January 2006:
$14,724-Held by Dept of Education
TOTAL NOW OWED AS OF JANUARY 2006: $53,705
In the almost 15 years of the life of these various loans I have only been able to repay somewhere around $1,000.
I have been in near 100% deferment or forebearance status since the orgin of each of these loans. I have averaged about $10,000 a year in income since 1989. I have been diagnosed with several mental/emotional disorders that impair my ability to work and earn enough to pay on these loans. I am very close to filing a Chapter 7 bankruptcy petition and taking my chances with the judge. This is literally ruining my life.
The best that the lenders will offer
me is to pay at least $400 a month over the next 25 years. I am now
51 and in 25 years I will be almost 77.
I would be willing to be interviewed.
Borrowed ten student loans from '91 to
'96 totaling 27k. Deferred as long as possible, made some payments,
and then filed chapter-7 in '97. Heard nothing until 2001 when
contacted by DCS claiming over 53k owed! First defense was claiming
all was discharged in court, but a credit report quickly discounted
that theory. Not only is DCS diverting all tax refunds, but
has garnished my wages to the tune of 25%. As of now, I've paid
over 20k and still owe 33k. Try settling with DCS but it's not
in their best interest to settle unless for the full amount--which
includes projected collection costs, not current collection costs.
This is a racket if ever there was one! Original guarantors
(DOE and Sallie Mae) just refer to collection agency for all correspondence.
DCS has tacked on 25% collection fees to each loan, despite servicing
all under two separate accounts. I refuse to pay more than twice
the amount I borrowed so will have to make a move soon--Baha!
On top of refusing to let the Dept.of
ED by my loan at a lower 8%, Sallie Mae refused to let me use any
of the offers being made at 5.4% and above because they claim that
they have exclusive rights on my loan because it has already been
consolidated and they have 100% of it. Can you imagine if your
home mortgage Co had that kind of power? This is the only loan
I have ever encountered that basically takes all your financial rights
away from you. Surely this is unconstitutional and should be
able to be taken to court.
The first time I borrowed money was in
1989. I was going to cosmetology school. the amount was only about
$2000. While working the cosmetology industry I was successfully payback
this amount, but it was a struggle. So I decided to increase my opportunities
and go back to school.
We are a middle-class family that doesn't
make enough to pay for college but are not poor enough to have money
thrown at us. In 2001, My son, Andrew, was accepted to the Brooks
Institute of Photography, which was a dream come true. He couldn't
get any scholarships as the school is private. We scrambled around
and was told the only help he could get was a small Stafford loan
of about $10,000 and private loans from Stillwater Bank that were
$95,000 when he dropped out after 3 academic years, just short of
his Bachelor's degree.
Since we co-signed for 2 of the Sallie
Mae loans, my husband and I needed to protect ourselves from possible
retaliation from Sallie Mae in the event that our son, Andrew couldn't
repay. We took out an equity loan for $65,000 to pay off our obligations.
The original loan amounts for the 2 were $25,000 and $25,301. Sallie
Mae made over $17,000 in interest for 3 1/2 yrs! The equity loan is
at an adjustible rate with interest only payments of about $600.00
a month probably forever. Andrew has also started to pay $555.00 a
month directly to Sallie Mae for the private loans.They don't send
any billings or statements so I have to remind him. Next year
the Stafford loans become due for over $11,000.00. When we repaid
the loans, Sallie Mae didn't even give us the courtesy of acknowledging
the payments. I had to call several times to see if they received
the 2 checks. We sent them together both equaling the $65,000
and only 1 was applied. When asked where the other check might be
they said...probably thrown away...After about 21 days, they found
it but I needed to pay another $2,200.00 in interest. We scrambled
to do that and are hopefully free of Sallie Mae. Now for Andrew, that
is another story.-
This has gone on so long that I honestly
don't know where to begin. I went back to school when I was
42 years old, a single mother with three children, working full time
and going to school full time. I got fired, never would give
me a reason, just that it had nothing to do with my work. I
think it was because I was in school and working afternoons and evenings
and that didn't fit well with their office, but they were the ones
who gave me permission to do so. I got married while in school,
had another child, got my degree, got my master's, taught school for
a year, then moved to Arizona. We were living in Bullhead City,
AZ and I could not find a teaching job. I went to work for the
City of BHC. My husband was working for Mohave County.
He lost his job, but prior to that he started gambling and as the
years went on the gambling problem got worse. I paid on my student
loan as I could, but there was a family that had to be supported too.
He eventually found work with the State of Arizona and we moved to
Phoenix. Again I tried to find work teaching in a community
(junior) college, but was unable to. I also tried to find work
in the legal field where I had 12 years experience in Arkansas, but
was always told that I had no Arizona experience. I eventually
took a part-time job working with Beth El Synagogue for a fundraiser.
My husband was fired again by the State of Arizona and started buying
and selling cars. I continued to look for work and eventually
went to work for the Maricopa County Attorney's Office as a secretary.
I worked there for approximately 2 years and then got a job with the
Maricopa County Legal Defender where I stayed for nearly 10 years.
I am now working for First National Bank of Arizona as assistant to
the SVP for Charitable Contributions. I am 62 years old and
have a son and stepson still living at home.
I originally borrowed money to get my Master's Degree in Music Education. After I graduated I consolidated the loans into one loan and began paying small amounts which I think were income contingent. As an educator, I do not make an enormous amount of money. I needed to be in Forbearance so I did that. What they don't tell you is that when you have an Income Contingent Payment option you are actually using up Forbearance time. I think I was on my 3rd Forbearance and I get a letter about 3 months into it saying that I owed them 1300.00 which is an impossible amount to pay on my salary. I tried to talk to Sallie Mae for about 3 months. I got told that I needed to defer my loans, but I didn't have deferment time. Which I knew but they continued so I filled out the paperwork only to find that I couldn't do that. All the while telling them that I could make small payments but they told me no. I needed to fill out another Income Sensitive application. So I did. I was not eligible for that as long as I had an outstanding balance. My guess is that I wouldn't have been eligible for it even if I didn't have an outstanding balance. I then began getting the default letters. I heard about a program through direct loans that I could consolidate and sell the loans to the government. So that's what I did. I was in default for about 30 days until all of it was straightened out. I spent 6 months filling out paperwork that Sallie Mae had me doing. I originally borrowed about 40000.00 and I now owe around 72000.00 but hopefully my loan won't be sold back to Sallie Mae. They are completely worthless. There was no one there that I could get a straight answer from.
In 1993, I wrote and published "
THE DEBTORS HANDBOOK; HOW TO STAY COOL IN HOT WATER " .
It's in the library of Congress. Pages 35-40 contain a situation very
similar to yours. Call me with your address and I'll send you a complementary
copy. Keep up the good work.
I was contacted by my student loan collection
agency today, DCS out of California. They wanted me to consolidate
I asked what was my remaining balance--$23k,
already paid over $20k in garnished income and intercepted refunds
whether or not Sallie Mae is feeling the heat of the recent negative PR in an effort to possibly shed its shakey image as
a loanshark. It seems to me that if I consolidate, I'd be caving into their strong-arm tactics by letting them off the hook
for what is obvious to me some extraordinarily creative accounting practices. Any insight would be appreciated.
My son originally had a student loan in the approximate amount of $7,500.00
Today, after going to a variety of collectors who added their charges and interest, the amount is $25,000.00 and the final collector, USA Funds(Their logo is an American Flag and under the USA they point out that they "support access to education" in fact, their primary business is garnishment. Question: Why are they allowed to use the American Flag, the letters USA coupled with their "supporting access to education.'?
They are about to garnishee Chris' paycheck again; what do you suggest can be done in a situation like this- it's not as though Chris graduated and is earning a lot of money as a Doctor or Teacher; he took a few courses and now owes a figure that probably will take the rest of his life to repay.
The government recently announced a reduction in interest rates; when we notified USA they simply responded with an advice on their intention to garnishee.
We've brought this to the attention of Senators Kyl, McCain, Schumer and Feingold and are about to alert them again.
Question: Do you know of anyone in Congress who might be specifically addressing this problem?
Well, i saw an
infomercial for UTI in phoenix, expressed interest never spoke ,setup
or had a cosigner ....nothing about how i would be paying for the
school had been spoken of, i got a postcard with a start date on it........i
was moving yipee!
I In 1988-1990, I returned to Concordia College to finish my teaching degree. I had loans from previous schooling and paid them. I accummulated $8,000 this time in Stafford/Perkins Loans. I accepted a job in Del Rio, TX which was a teacher-shortage area and filed the appropriate forbearance papers. My loan was to be in forebearance. February, 1984, my income tax was taken. When I contacted the Department of Education, they said that there were loan companies buying up loans, sitting on them, adding fees, and then selling them back to the Government because they were guaranteed loans. The loan was up to $17,000. (I worked in the same school district. I was never contacted regarding my loan being in default and the additional amounts until this phone call I made.) The Department of Education said not to worry about it, my taxes would not be taken again, and they were not.
I filed the deferement papers when I was in the Peace Corps from 1996-1997. I returned to work in another teacher-shortage area, inter-city, junior high math in Sacramento, CA. I purchased a home in 1999. The loans were marked "written off" on my credit report. In 2000, I had a nervous breakdown, stroke, and another nervous breakdown, with two long hospitalizations. I filed a Chapter 13, and loss my house and car. The Department of Education was sent my notification of a Chapter 13. (I have recieved my records from Department of Ed and you can see where they were notified). They had the opportunity to be included in my paying back of my debts through the Chapter 13, and chose not to participate. Not unitl,November, 2006, because I was taking an online course, I recieved from the Department of Education, that I now owe, $33,000.
I have been trying to work out a settlement, paying them $400 a month, but I do not agree with this total amount and want my hearing. They continue to harrass me without a hearing. I just want to pay back the $8,000 and a reasonable amount of interest without this growing more. They said if I pay $400 a month for six months the loan would be reduced. Then I get papers saying the loan will be sold with new fees added. They also said I have to agree with the $33,000. If I do the repayment program, and I have to give up my right to a hearing. They keep on harrassing me. I am working in another teacher-shortage area, Northern Arizona, servicing the Navajo Reservation, and teaching junior high math. I have always worked in impovershed, areas where I was needed. Is there anyone who can help me get a legal, reasonable agreement, that is not going to continue to gather large fees. My high blood pressure, and depression problems are returning. I do not want to be out of work again. I am alone with no one to help me. Please, someone help me.
God help me,