Changing Repyament Option Nightmare

I have tried changing my repayment option to lower my payments twice now.  Each time I have contacted them after I sent in the required paperwork and both times I was told it was being processed and I would receive a notice of either acceptance or denial of the new payment option.  I just followed up again after not hearing anything since November and surprise surprise they have lost my paperwork AGAIN.  I know have to resubmit my paperwork for a third time and hope they don’t loose it.  This process has been going on since last summer and in the mean time I am still paying the full monthly bill instead of the lower payment that I qualify for!

Turnaround Time

On 1/22/12 I sent this email to ACS regarding my inability to choose IBR on their website:

Hi - I’m eligible for IBR loans (I’ve done the calculator), but I don’t have the option to choose them under the “lower payment options.” How can I apply for IBR?

On 2/3/12 I got a form email response with an IBR application attached:

Dear Direct Loan Borrower,

Thank you for your email inquiry. We’ve attached the IBR application to this email.

Sincerely,
The Direct Loan Servicing Center Email Support

That’s just within their 10 business days processing time. For sending an email. Did it take them 10 business days to copy and paste the form response?!?!?!

broken promises

 Hello. My name is Brie and I but one story in a sea of stories of millions of people who are living lives of quite desperation drowning in a student loan debt crisis.

Like so many others of my generation I was raised to believe that college was a necessity in order to secure a good job and to have a bright future. So senior year came and I began looking at colleges and of course their expense. Both parents were living paycheck to paycheck and had no resources to help fund my education. But when all hope seemed lost I found what I thought was my salvation in student loans, which offered low interest rates, consolidation, and flexible payment option. Unsure of what to do I consulted my parents, school, and loan advisors who did not hesitate to tell me that while my college education would be expensive I would  have a degree which would guarantee me a good job with a nice income and thus I would have no trouble paying my debt off. I was told it was an investment in my future. Like so may other naive students with no other options I signed on the dotted line.

My college experience was grand and before I knew it five years had come and gone and it was time for graduation. I was proud. Mom and dad were proud after all I was the first person to go to college in my family. Then it was time to look for a job. I naively assumed that finding a job even in an economic recession was going to be no problem after all I finally had that degree. I was wrong. After six months of trying to look for a job in my degree field and working two full-time jobs that paid only eight dollars and hour just to get by the student loans came due. I had accumulated $100,000 in student loan debt from two companies, Sallie Mae and Mohela, with a combined monthly payment of around $900.

Living on my own with nowhere to turn and no parents who had the means to help, I called my lenders to let them know that I was unable to make those payments and to see about consolidation, lowering my interest rate, and all those flexible payment options I had heard so much about several years ago. I was horrified to learn that Sallie Mae and Mohela no longer offered consolidation, that there were very few payment options available to me because I had private loans, and my Sallie Mae loans had sky high interest rates. I also found out that unbeknownst to me Sallie Mae had purchased all of my federal loans from other lenders. I subsequently found Direct Loans who bought and consolidated my federal loans. Direct Loans also offer many options for repayment for struggling graduates.

But most of my debt was in private loans and there was simply no way for me to make those payments, I mean what was I supposed to do… not pay my rent and car payment so I could pay my loans? Mohela offered forbearance which I was granted due to economic hardship but there was a catch, interest would still accrue. Sallie Mae was a different story. I could attempt deferment or forbearance but their application fees for forbearance and deferment were also sky high and there was no guarantee that it would even be granted. Not wanted to throw my money down a black hole I decided to attempt to pay Sallie Mae what I could. Then the non-stop harassing phone calls began. I would receive around half a dozen phone calls a day because my account was past due always speaking to someone I could barely understand in another country. I once again naively believed that because I was doing my best all would be right with the world however I quickly was threatened with delinquency and default. After several months of paying what I could and Sallie Mae’s relentless phone calls I did the only thing I knew to do to escape the horrors of default and I went back to school part-time at a community college, which was inexpensive and that I paid for out of pocket, to put all my loans in deferment.

Here we are two year later and I am still in school. I have found a job. I work in public service and while meaningful it doesn’t pay very much. I also got married to a lovely man who unfortunately makes significantly less then even I do. But we have each other, a cute little one bedroom apartment which we love, and we were optimistic.

One day I went to check on my loans and I was once again horrified to learn that my original debt had ballooned to $149,000 due to capitalized interest and that my Sallie Mae loans have such a high interest rate that my loans are accruing over $500 every month just in interest. Again I began to panic. I’m not doing much better then I was two years ago. We are living practically paycheck to paycheck and are nowhere near close to being able to afford over $1000 payments every month. Together after taxes and health insurance we bring home around $42,000 a year. I am literally accruing more interest every month then I can afford to pay let alone anything going to the principle. Even if I could make the payments by the time it is all said and done I will have paid at least triple the original loan amount due to interest; that hardly seems fair. If I paid the lenders what they were asking for every month I would be handing over 60% of my take home pay which means I will have far less then even minimum wage to live on. So what was the point of going to school in the first place? I would gladly give it back if I could. I have contacted credit counselors, attorneys, conducted research on the internet for help and resources, I have even contacted the Attorney’s General’s Office and Congressman and found very little help other then the ominous warning not to default on my loans.

Desperate not to accrue even more debt I am left with questions…what do I do? And where are all those thing that were promised to me at the beginning? Why is there no relief for the college graduates who are in over their heads? It appears that default is inevitable. And because these debts can not be bankrupted, there is no statue of limitations to pursue these debts, and wages can be garnished there is no incentive for these lenders to work with their clients thus creating a predatory lending system that is creating indentured servants out of an entire generation. As of now our dreams of owning a home and having a family are gone which I have read in my research is the case for many people. Something has to be done. An entire generation is drowning in debt. A generation that will not be able to afford to buy houses, buy goods and services like the last generation, and will have smaller or no families because they can not afford to. Further our generation will not be able to send their kids to college and certainly with the horrifying lessons we have learned in dealing with these private lending companies we won’t want to. This will impact the economy for years to come.

Sallie Mae: Too Organized to Be Incompetent

If I would have known, I would have never gone to college….

Well, we are all here for a reason. Something needs to change when it comes to these private and federal loans.

Thank God that I did not have an issue with my federal loans. I chose the income sensitive plan with Direct Loans. I don’t make any payments. It did take a very long time to finally consolidate my loans because the lenders kept selling my loans to other companies. In all, it took about 9 months.

Now, on the subject of private loans. I took out private loans because I did not know any better. I went to a public university but my tuitoin did not cover my room, board and other things that I needed for school. By the time my grace period was over, I owed so much. I do have a job but I live pay check to pay check. I am not married and I had to move back in with my parents. I’ve called Chase, Sallie Mae and American Education Services to see if there were any other payment options. They all told me that the only option I had was to pay the interest for 2 years, but in time, my payment would only go higher. So if one of my loans were $369 a month and I choose to pay the interst option then by the end of that 2 year period my monthly payment could be well over $600. That’s just one of my loans. I can not afford that option, so I have no choice but to pay all my loans. I have never gone in default but I live pay check to pay check. I struggle just to put gas in my car or even pay my credit card. I can not get any loans due to the amount of my debt compared to how much I make a year. Even though my credit is perfect, that does not matter. I’m not looking for anyone to pay my loans off. I’ll pay them but we need better payment options for those who pay private loans. Don’t worry lenders, you’ll get your money but in order to get it, you need to help us out.

One time, ONE time I paid partially on a loan (for some reason, they split them up) and I did not know I had a balance. They called 3 days after I made the first payment and they spoke to me as if I were a criminal and the same response I got was “well you should have known.” I told the rep. that I did not receive an invoice in the mail. The rep’s response was “it’s a curtosy that we sent out invoices. Check the website.” I told the rep, what if I didn’t have internet? He didn’t care. I wasn’t even past the due date and he spoke to me that way. If I would have known all of this, I would have never went to school. I have a masters degree and I’m a public servant getting paid close to nothing. But that’s another topic.

We have to take a stand. We need to go to the media, our state reps, congressmen and anyone else who can help us make changes. If the govt. can bail out the banks to whom we make our student loan payments too such as Chase, then the govt. can bail out those who have private student loans.

I urge you all to make this issue PUBLIC!!!!

Department of Ed Consolidation and Loan Service Departments Aren’t on Speaking Terms

Student Loan Hell (Private and Federal)

I graduated college two years ago with roughly $120,000 in student loan debt. The majority of my debt is private, which has made life as a college graduate complete hell. I walked across the stage to accept my degree in the worst economy this country has seen. Since I took a semester off early in my college career I did not get any grace period before my first payment was due. To my horror, my first bill appeared in my mail box on the very day I graduated. How did they expect me to have a job this soon after completing my degree? How was I supposed to pay it? Again, to my horror I learned that they did not care. They wanted their money. And so began my nightmare with student loans.

The lender of my private loans, New Jersey Class Loans has caused the most stress. I took out $110,000 mostly because the private university I attended pushed private loans. I foolishly borrowed this money unaware of their lack of affordable payoff programs and complete disrespect for their borrowers. 

I was laid off from the non-profit I worked for six months after graduating. I was told due to the rough economy my position was being eliminated. Since I had not worked my last two years in college and since I was only employed for 6 months, I did not qualify for unemployment. Upset and scared I called my creditors and lenders explaining my situation. Sallie Mae offered an unemployment deferment, as did Perkins and Direct Loan. NJ Class did not. Instead, I was mocked and belittled with questions like “why did you take out the loans if you can’t pay them?” or “just ask a family member to pay”

My monthly payment was $1,100/month, how was I supposed to pay that with no job and no unemployment benefits? Once again, to my horror they did not care. On a conference call with them, my mother asked what we’re supposed to do if we cannot pay. They told her to sell her home. I am completely serious. SELL her home! I applied to about 10 jobs a week for 7 months and saw zero interest from employers. I graduated with high honors from a nationally recognized university and there I was, unemployed and blowing through my savings just to get NJ Class off my back.

Eventually, my savings ran out. I went through $6,000 and was left with nothing. At that time I had no choice but to default on my private loans. They called me all times of the day to get their money. Each time I spoke to them, I asked if they offered any help to the unemployed. Their answer was a quick and stern “no.”  Once they got tired of calling me, the letters started. Threats of sending me to collections and threats to turn off my drivers license. They then went after my credit score. I saw my score go from 756 to 530. All because I lost my job and they could not and would not offer me any sort of reasonable payment program. I pleaded with them, explaining that its not that I don’t want to pay its that I cannot pay that much. They refused to budge. 

I finally found a temp job, but after three months those positions were outsourced overseas and I was once again thrust into unemployment. It took another 6 months to land a steady job with good pay. At that time I was able to talk NJ Class down from $1100/month to $780. Sadly, my job was once again eliminated after only 7 months. It was another small non-profit company that was downsizing due to the economy. It seemed to be the story of my life.

This time, I worked long enough to collect unemployment. A mere $1000/month. A shocking difference from my $45,000/year salary. Since my monthly unemployment check was not enough to cover the now lowered $780 payment and my other bills, I once again called NJ Class to discuss options. It was then that I discovered the lowered payment plan I was on was actually increasing my overall balance! I was paying them nearly $800 a month and they were only applying $34 to my balance…$34!! At that time I was also told my only option was to consolidate.

Since they are a private lender, they offered only one consolidation program with a finance charge of $169,000. That means, over the life of the loan I will pay back $279, 529.20. All for an undergraduate degree that has gotten me laid off 2x in two years.

The consolidation brought my payments down to $722/month. Still way too high for my minimum wage unemployment benefits. I asked several times how I was supposed to maintain a minimal standard of living while also paying my loan and they kept referring to the fact that I took out the loans, so its my problem not theirs. Great customer service huh?

Fast forward to today, a year after being forced to consolidate and I am still on unemployment. In order to afford my private loans both my parents agreed to split it three ways, so we each pay $250.

My husband is a United States Marine and we’re stationed in a tiny military town in North Carolina. The jobs here for the educated are hard to come by. I apply to jobs every single day and am hopeful I will land something. However, next month unemployment runs out. And once again I will be forced to deal with NJ Class, a lender that refuses to recognize the state of the economy. Instead of working with their borrowers we are treated like criminals. 

Did I mention I also have federal loans? Well, lets make this short. I consolidated my Perkins Loan, Sallie Mae and Direct Loan into one under Direct Loan. For the past 11 months I have been trying to get on an IBR payment program.

Each time I send in my paperwork along with all the required documents, I get a letter back saying I have not provided sufficient information. I then call them and ask what needs to be sent and then proceed to mail my documents again. This process has gone in circles, six times to be exact. 

The last time I sent in my paperwork I followed up two weeks later and to my surprise I was told everything had been received. I was also told the changes would take effect in about a month. The next month, as promised my min. due changed. But, it went higher not lower. I figured it was just the amount calculated by the IBR and paid it for about 3 months. Since I am on unemployment, I started to struggle with the $184/mo payment, so I called to inquire about how they came to that amount. I was then told that I was NOT on an IBR program like I thought I was. Instead, I was told I was not on any payment program. The rep said nothing in my file indicated I was trying to get on the IBR program. This was after I had sent in my paperwork 4 times. 

She told me she would send me out the packet to complete and that once they got it, I’ll be changed to an IBR. I waited two months and never received any paperwork. I called back, explained the story and was once again told I was going to be “sent” a packet to mail in. A month later, still no packet. I called AGAIN and asked for a manager. I was told that “even though I didn’t receive anything in the mail, doesn’t mean they didn’t try to send it” Apparently, they have occasional computer “glitches.” Glitches? Really? That’s your excuse? So, again I was told I would be sent my packet. Well that was 3 weeks ago and I’m still waiting. 

Next month marks a full year of trying to get on an IBR program with Direct Loan. Why is this allowed? Why do students have to put up with lenders who are inconsiderate, unorganized and only after your money?

I am not some irresponsible twenty-something who went to the mall and recklessly wracked up credit card debt. I am a responsible member of society, who went to school to further my education. Like many others, I am a victim of this economy and I am treated like a criminal from these loan sharks who refuse to work with me.

Why can someone claim bankruptcy and get out of credit card debt and gambling debt, but we cannot forgive student loans? Why are the educated being punished for doing what we were told to do? We stayed in school, we got our education. Where is OUR bail out? Instead, I am forced to live near the poverty level because my private loans refuse to offer affordable payment plans. This has got to change! 

I pride myself on paying my bills on time and keep up a spectacular credit rating, but my student loan servicing company—notably the largest student loan servicing firm in the country—has made some pretty bold attempts at ruining that perfect record for me.

I signed up for their automatic payment plan for the much touted benefit of a lower interest rate. But the way the payment plan works right off the bat is strike one by my servicer: they only allow automatic payments to be taken out at the absolute last possible moment before the payment is due. You can’t choose when your payment posts, they choose for you. But that shouldn’t be a problem, right? If you have the money in the account, and you keep your records up to date, everything should go perfectly fine, right?

WRONG! Because they screw up your payments for you! The first time was after they sold my loan, to a division of their own company of course, and sent me a letter telling me “nothing regarding my servicing terms has changed and payments will continue as normal.” But I didn’t trust it. So I called and inquired as to whether my auto-payment plan (with the same servicer, same account number, to repeat: “nothing has changed”) was still set up.  Nope! Somehow in changing nothing, they lost my auto payment info. And of course I found this out just one day short of the cutoff to make my payment on time. Consider that strike two.

A few years later, while doing my usual meticulous checking-up on my accounts, I noticed my student loan payment had not been taken out by the usual time… I had gotten used to the occassional moment of panic when the deadline fell on a weekend and caused the posting date to shift a bit with no real consequence, but this was strange, as it skipped a mid-week due date.

I called my servicer, who claims to be available “Anytime you need them. 24 hours a day, 7 days a week” only to find out that if I actually wanted anything more than hearing a computer read back my outstanding principal, I had to call during their extremely narrowly defined business hours, which meant taking an hour out of the next work day to wait on hold until I could talk to someone. And of course, no surprise, they told me they had no idea why my payment was never made but it must be my fault (because of my still active totally unchanged account full of money that I must have just spitefully hid from them), and I’d have to arrange for a manual payment with late fee (and I’m sure all the fun that gets put on my credit report). Well, I politely told them this was bulls**t and demanded to talk to a manager who gave me the same line… and then told me I’d have to wait until the next day to actually post a payment, since it was outside of their payment posting hours (what!? do they not have computers that handle all this 24/7 like any normal financial institution?).  STRIKE THREE. Before I hung up I informed them that I would be contacting my state’s various financial and consumer regulatory agencies—and this was not an idle threat. It turned out though, I wasn’t the only “customer” (yeah, like we chose to do business with them) who had the same problem and gave them an earful. The next morning, as I logged on to make my payment, there was a message informing me a “payment processing error” had affected my account and that my automatic payment would be processed the next day with no penalty.

Ok, that’s nice that I’ve still got my great credit rating and perfect payment record, but they’ve still got three strikes against them… I shouldn’t have to jump through hoops to make “automatic” payments work. The big problem is, unlike many businesses where you can take your business elsewhere, that I have no choice in the matter. They’ve got me on the hook until the full $28k and all the interest on top of that is gone. So what incentive do they have to not make mistakes like this again?

We need reform NOW. If we’re going to be held responsible for tens of thousands of dollars of debt for getting an education, student loan servicers sure as heck should be held fully responsible for when they fail to competently provide the “service” of taking our money.