Picture drawn by Maggie Stiefvater, 2009. Header made by S.F. Robertson, 2010.

Monday, February 20, 2012

Meandering Monday- Sallie Mae

By the title of this post, you can gather that this is not something usually on a book blog. But it's something I've been wanting to write for a while so I figured I'd do it here. I hope you guys don't mind, though I'm sure many of you have strong opinions about this too.

Now, I know very little about student loans, having thankfully not had to deal with them. Believe me, I am extremely grateful that my parents had a plan for college that didn't involve me having to take out loans or anything. I have several friends from college who now have to deal with loans and it makes me sad, sick, and angry that in most cases, it's very hard to bring your principal balance down. It's especially hard when you're dealing with Sallie Mae.

If you don't want to read my full rant, here's the basic idea: Sallie Mae is a horrible, corrupt company that needs to be stopped.

Hearing my friends talk about their experiences with Sallie Mae makes me so angry and I wish I could do more to help them than just being a good listener. I don't truly hate many people or companies because hate is such a strong word. When you meet me, I'm a very friendly, happy guy and I don't like to focus on negativity, so I feel like it's very telling of someone/something when I do get truly angry. It's a very rare sight.

My problems with Sallie Mae are thus:

1) How they still make you pay interest when you're trying to pay down your balance. I don't know if this is how all loans work (and if it does, I think that's just wrong), but it makes no sense. Or, well, it does if you're a corrupt person who just wants to keep taking money from people who are paying you but aren't able to pay their other, more crucial bills or food. I understand interest being tacked on when you're not paying back the loan because they're out of however much they lent you until you pay it back. But I believe that once you start paying it back, the interest should stop so that the balance can go down.

Many college students graduating in the past few years (and those who will be graduating over the next few) are having trouble finding jobs, including myself. It's not for lack of trying, or lack of ability; it's just lack of positions available. Then, even when you do get a job, you have car payments, utility bills, monthly rent, food, gas, etc. to pay for. Where after all of that are you supposed to muster up $600/month to only be able to pay the INTEREST and not the balance? All you're paying is interest and your balance never goes down. There's no way to save because all your money is going to bills and Sallie Mae every month so how are you supposed to be able to actually bring down the actual balance? It sickens me that Sallie Mae is doing this when they know how bad the economy is and I'm sure they get plenty of calls and complaints about this and yet THEY DO NOTHING. It just angers me to no end.

2) They made unemployed people pay an "unemployment fee" to defer their loans. Um... say what now? The entire point of being unemployed is that YOU HAVE NO MONEY. And what little you do have has to go toward gas to get to job interviews and keeping yourself fed and sheltered, not to a rich beyond belief company who just pockets the money. Oh yeah, they just pocketed it. It didn't go toward interest or the principal balance. It was just money they kept. What the heck?! A recent petition with 75,000+ signatures was brought to their attention and they kinda changed their policy, but not really. They're still doing it but instead of pocketing it, they'll put it toward your balance once you've made 6 consistent on-time payments. That doesn't solve anything though- unemployed people still have no extra money to be giving away every three months. It's like they have no concept of this.

3) They are just out of control and throwing their power around because they can. There really needs to be more regulations and rules set on private loaners like Sallie Mae. I don't know why they don't do that. If I were the U.S. president and saw this happening, I would be going to these people and saying "I am enforcing rules now. Deal with it." Why didn't they do that when they bailed them out a few years ago? Like "Hey, here's this money BUT before we give it to you, you have to agree to stop doing these stupid things to your clients.". I'm just surprised no one in power has really done or said anything. I feel like someone should be doing something about this.

I hate this feeling of powerlessness. Whenever something horrible and unjust happens to one of my friends anywhere, I wish I could do something and make things right. Talk some sense into the wrongdoers and show them the right way. It's just absolutely bonkers that there are a lot of people in power who only care about themselves and don't care about the little people. I want to do something, but I just don't know what. Plus, I'm not THAT articulate that I could start something and lead people.

Anyway, that's my big rant. I feel a bit better having written it out but I'll feel much better when change occurs and things are made better for college graduates with a ton of debt. What do you all think? I'm sure you all have opinions. Lay them on me!


  1. It's funny that you put this post up because my mom handles my school loan things so I'm using Sallie Mae. I've heard it's awful, but that's what she wanted to do. Of course her logic for paying it back is that she's old and she'll die soon so I can use her life-insurance money to pay it back. Yes, those are her words. I don't know anything about student loans so I appreciate you putting this post up so now I know what I'm stuck with. Hopefully I won't get screwed over, but I'm expecting it. Like I said, I've heard a lot of complaints about Sallie Mae. Too late to do anything about it now though. Great post!


  2. I'm sorry to hear about this James, this whole college loans thing is actually very foreign to me because State schools here are basically free and colleges very cheap - I paid about fifty bucks a year in tuition, and most of us live at home, very few schools have dorms here and it's not 'usually done' for people to move miles and miles away from home because they prefer certain school. So for me the fact that education is so expensive is just strange.

    I'm sorry to hear what your friends are going through, I hope things get better. And yeah, companies like Sallie Mae are awful. They basically want you to keep generating interest because that way you end up paying up to three or more times what they loaned you in the first place. They do rob you blind.

  3. Haha first off, I was COMPLETELY off in my guessing!

    But just...ugh!

    I'm going to an expensive school. I'm hoping for a scholarship that will help reduce costs and I'm taking a year off to be able to work and save money but when it comes down to it, I'm pretty sure that I'm going to have to take out some loans.

    I haven't given much thought as to where or anything because I don't know exactly how much I'll need. But I'm going to attempt to avoid Sallie Mae and look into other options because that's just...wrong.

  4. Sallie Mae is one of the worst Loan Companies, I had the bulk majority of my loans through Sallie Mae. When I graduated I interned with a company and was making very little money so I had to get a forbearance ( a temporary payment hold while still accumulating interest) needless to say that after 2 years of interning and a year of job hunting my balance had went up significantly with a 18.9% interest rate. So by the time I was working a decent paying job my payments were almost 800 a month..add that to my living expenses and other debt I was in over my head. My credit was hurt because I couldn't manage the payments. I got legal help and my lawyer had me default on the loan..after 3 months of not paying it went into collections. Then after another 3 months the interest stopped, and I was offered a settlement. I was offered 45% off my balance and could pay the pay off in installments. I had to cheat the system in order to be able to afford my loan. They are crooks, I would have never been able to pay off my loans so early with out letting them default. I would have been paying on a loan well into my 50's at there interest rate. Private student loans such as Sallie Mae need to be regulated, otherwise people are going to be bogged down with debt that they are unable to pay.

  5. Sallie Mae is corrupt. Predatory lenders took advantage of needy students by charging them interest rates of 14% and higher. These loans have now ballooned, and doubled. There are NO conumer protections for borrowers of private student loans. These students were expoloited by preditory lenders.
    The current lending system (for private student loans) invites profiteering on behalf of the banks. Many students are defaulting on their private loans because the payments were too high- due to the fact that their loan doubled in size. The new class action law suit (Sallie Mae's own investors filed suit) states that Sallie Mae put defaulted and delinquent loans into forbearance to hide the delinquencies. And, the suit states that Sallie Mae relaxed their underwriting requirements to give out those private loans at super high interest rates.