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Excellent link as to what we are up against


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Since 1997, student loans have become the most profitable, uncompetitive, oppressive, and predatory type of debt of any in the nation. This has occurred due to legislation that was paid for by the the lobbying machine of Sallie Mae, the largest student loan company in America. Vast personal fortunes are being made by both Sallie Mae executives, and others who paid for this legislation, at the expense of decent citizens who were not able to capitalize on their education. This has effectively crippled MILLIONS of decent citizens who want to repay their original debt, but are prevented from doing so by staggeringly higher amounts being demanded from them by both "non-profit", and for-profit student loan companies. This has truly created a swath of economic destruction across our land.

http://www.studentloanjustice.org

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Well that link doesnt work...but I have read the site before. I won't list my opinion of the ones who run that site.

Post secondary education is not a right. You want to go to school, you pay for it. You also plan for it. I took out several thousands of $$ in FA and I worked my a$$ off paying it off as quickly as possible. That meant delaying a car purchase, a home purchase and living at home for 3 years. My loans were not during the years of 3% interest...it was during the 8 per cent era. During my years of collecting defaulted student loans, you would be amazed at the crap I saw on peoples credit reports, yet they had allowed their loans to fall in default. Victoria's Secret accounts, god knows how many credit cards, home payments and expensive car payments....and yet they couldnt afford their government student loans. These also ended up being some of the biggest whiners. Then as I progressed into being a Financial aid officer, students would walk in July totally ill prepared to pay for school. No summer job, no part time job....nothing. Parents were mortgaged to the hilt and couldnt afford the expected family contribution. Yet these same students and families expected the government to pull fund them becaused they were ill prepared. Not to mention the fact that these kids "had" to live in the dorm although they only lived 5 miles from campus. Now yes, there are always expections to the rule, but from my experience the majority of students I saw were clueless. They ended up with gobs of FA and yet alot could afford spring break in Florida. Do work study?? No way.

Do you see website bitching about high interest rates on sub par car loans?? 19% at Victoria's Secret. Then why are people bitching about 3-4% interest on student loans?? Must make you wonder.

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I fixed that link for you, Lynn. 8-)

If someone misses a loan payment, they will have to pay a late fee, which makes perfect sense. Unless it's a student loan payment, then they will have to pay 5-10x the amount they borrowed, which is unconscionable.

The fact is that defaulted loans are far more profitable than servicing a loan in good standing. The student loan industry knows this, and they know they have the government-given power to squeeze every last penny out of someone that had to deal with life.

There's always some jerk who has it all figured out who says "If you would just live within your means blah blah blah..." or "if you would just pay your bills..." that is living in some fantasy world where nothing bad ever happens.to anyone.

People who miss payments on anything don't do so on purpose, that would be stupid. People don't pay their bills when they can't afford to. They have enough common sense to pay their basic living expenses first until they get back on their feet.

When life happens, it's not as easy to recover as it would seem. Sometimes being out of work for a month takes years to recover from.

The punishment doesn't fit the crime, especially when it comes to student loan collections.

I have little sympathy for deadbeats who borrow money without understanding what they are doing, either, but they are the minority of people in default.

The vast majority are in the situation they are in through no fault of their own and are constantly kicked while they are down.

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I fixed that link for you, Lynn. 8-)

If someone misses a loan payment, they will have to pay a late fee, which makes perfect sense. Unless it's a student loan payment, then they will have to pay 5-10x the amount they borrowed, which is unconscionable.

Obviously you dont know your student loan facts. You miss a student loan payment, you pay a late fee like any other loan. Default does not occur until you are 270 days or 9 months past due...and during that time you have the opportunity to defer or forbear your loan. How many other loans will allow you to defer your loans while the government pays the interest for 3 year of economic hardship or it you take time out to have a child?? I know my mortgage company won't!!!

Most people do NOT pay back 5-10X the amount they borrowed. Do the math. Interest rates have been running 4%...you pay it in the proper term. Interest on a $10k loan over 10 years is about $2100. Ignore a loan for 20 years and yes maybe is will be 5-10x the balance, but that is the extreme.

The fact is that defaulted loans are far more profitable than servicing a loan in good standing. The student loan industry knows this, and they know they have the government-given power to squeeze every last penny out of someone that had to deal with life.

Again you are WRONG. Defaulted loans are not as profitable. The servicer/lender must pay out default aversion costs either by hiring an agency to cure the account or pay internal staff to try to prevent the default. Salary, phone, postage and other costs are involved. Then the acccount defaults and the guarantor pays it. Collection fees of 18.5% are added. Generally a CA assigned to the account is paid between 8 and 10% on proceeds they collect. The remaining collection costs is absorbed by the guarantor to run their collection department. It aint profitable. If they fail to collect the loan, the DOE subrogates it and pays them off at a discount. They lose money on the account.

There's always some jerk who has it all figured out who says "If you would just live within your means blah blah blah..." or "if you would just pay your bills..." that is living in some fantasy world where nothing bad ever happens.to anyone.

People who miss payments on anything don't do so on purpose, that would be stupid. People don't pay their bills when they can't afford to. They have enough common sense to pay their basic living expenses first until they get back on their feet.

A lot of these people ignore their student loans when they have deferments available to them.

When life happens, it's not as easy to recover as it would seem. Sometimes being out of work for a month takes years to recover from.

I have little sympathy for deadbeats who borrow money without understanding what they are doing, either, but they are the minority of people in default.

Actually borrowing money without understanding what they are doing would probably be the MAJORITY in default from my experience. The minority would be the hardships who really got into a bind. How many times did I talk to the stay at home mommy who decided she had to stay at home and raise her child only to have them call back bitching 6 months later that it was my fault that they cant get a mortgage?? Or the student who went to school for 10 years only to find out that the masters degee in old english wasnt going to get them a job?? Until you work in a student loan collection call center and have experienced the excuses of the masses, you have absolutely no insight on the industry. We were expected to make 180 calls per day...on average I would have 30-40 contacts. If I set half of those up on payments I was lucky. The excuses, the lies, the fraud....it is unreal!! I had one women who actually had the bad luck to fax me her permanent disabiltiy certificate from her job!!! I went to the fax to get it and noticed a business name. On a hunch, I had a co-worker call and verify employment....my client actually filed federal fraud charges against her and the doctor who completed the certificate! I have been out of the collection industry now for 7 years but I still have friends who collect and nothing has changed!! Pre default, the lenders and servicers are being even more generous on reducing payment plans and extending forebearances than ever before.

The vast majority are in the situation they are in through no fault of their own and are constantly kicked while they are down.

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Lynn is right. I take total responsibility for my student loans going into default. There's really no excuse unless you are in serious dire straits. You can get forbearance and deferment. You're supposed to take exit exams, etc. There are plenty of opportunities to get a grasp on how your loans work and when to pay.

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You turn me on, Lynn. Because you're so beautiful.

I never said that the interest rates weren't low, and the forbearance period a student can have is is no small favor. But companies like Sallie Mae who service student loans, and also own student loan collection agencies create a huge conflict of interest to their favor using the governments weight against former students.

As usual, you only responded to things you could nitpick over, instead of the real issue: that people who, for whatever reason, end up in default end up are having to pay more in penalties than the amount they originally borrowed. The link I provided, that I don't really expect you to admit reading, contains testamonials from real people who end up owing a lot more than the 18.5 percent extra that you claim. I also don't belive that most of it goes towards collection overhead. It's almost pure profit for the collectors .You'll also never get me to belive that a whopping 18.5 percent is a small fee to tack on, especially when you're talking about tens of thousands of dollars in education loans, nor will I ever belive that most defaulted student loans are owed by morons with expensive cars and Victoria Secret cards.

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people who, for whatever reason, end up in default end up are having to pay more in penalties than the amount they originally borrowed.

That sure isn't true in my case. I did have to pay an extra $600 (the 18.5 percent in collection fees, which I am not happy about), but the rest of the 'extra' money is accrued interest. Now stop being so direspectful.

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Your opinions of me are irrelevant, and I certianly don't take orders from any of you, but I did edit my posts to something nicer.

I posted an important link that people should at least keep in mind, even if they aren't going through the same thing, that's all this thread was supposed to be about. If anyone disagrees with anything on that website, fine, but going on some tirade about your childhood serves no useful purpose.

A lot of people are being charged more than a total of 18.5 percent extra, and unlike ordinary defaulted debt, the student loan collectors can just take as much money as they want right from peoples taxes or paychecks. They get away with it because people are uninformed, what better whay to inform them off all the angles than a Student Loan forum on a credit message board?

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Your opinions of me are irrelevant, and I certianly don't take orders from any of you, but I did edit my posts to something nicer.

I surely hope that you are not referring to my post. We here at the CIC boards require that civility be shown. With all of us being human, we try to show restraint and understanding in moderating this board. Mistakes happen, emotions can run hot. However, what will not be tolerated are people who are here to fight and to troll.

Please keep it civil.

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A lot of people are being charged more than a total of 18.5 percent extra, and unlike ordinary defaulted debt, the student loan collectors can just take as much money as they want right from peoples taxes or paychecks. They get away with it because people are uninformed, what better whay to inform them off all the angles than a Student Loan forum on a credit message board?

More evidence that this troll knows absolutely nada about the student loan system or laws. Student loan collectors cannot take as much money as they want...never have, never will be able to. However I will not spar with individuals that absolutely know they are right. They aint worth the keystrokes.

I have been on both sides of the student loan system...I have given out and then collected it back. The system aint perfect. However, right now the default rate is the lowest is has been in 25 years, down from 20% in the 90's ...it is now sitting at 4.5%. I have read through the site that the op posted. Yes there are some true hardship cases. However the majority of the posters on that site brought default upon their own shoulders, mostly by ignorance or bad decision making. Many have misplaced anger blaming a system that works for most.

I am the parent to two young daughters and I am fearful of what post secondary education costs and what it will cost when they graduate high school in 8 years. We have started saving but we know that we will not come anywhere near what it will cost. I am self employed and I try to save as much as possible during my high seasons. My girls have savings accounts and they work for me and they are encouraged to save too. Where most kids are saving for gameboys and X boxes, mine are saving for college.

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Wasn't referring to your post, Divemedic.

I know I don't post much, I mostly read, but that doesn't make me a troll, which is the worst thing you can accuse a legitimate poster of being. That kind of personal attack against me is worse than anything I ever wrote.

I asked a legitimate question in the following link a few months ago, and instead of anwering my question, Little Miss Know-it-all doesn't hesitate to act like a typical antagonistic collector telling me I did everything wrong and that I have no right to demand any kind of justice. "You agreed to this" and "they can do whatever they want" is the wrong thing to say to me.

http://www.debt-consolidation-credit-repair-service.com/phpBB2/viewtopic.php?t=42809

I've got a huge student loan headache now, due to the incompetance of student loan servicers and the easy money it is for collectors, since my hands are all but tied in regards to collections of student loans. I found the apllicable laws I needed myself, that prove the student loan CA violated by saying I owe $4000 extra now in collection costs (up from $3000), which is 40 percent, not 18.5.

I pointed everything out to the Ombudsman and the guarantor, who might actually help me now. I got the CA off my back and got rid of their tradeline, but I'm still unlcear if anyone wants any collection costs, or how much. I'm making payments now to the guarantor to clear the default staus, then will pay the rest of the loan off. I invested the payoff in an account that pays 1% more than the interest rate on the loan.

Anyhoo, CA's get away with more than 18.5% because people are uninformed and don't realize that no, a CA can't charge get more than 18.5 in collection costs, but that doesn't stop them from trying, and it's important that people knwo the difference between what they can and can't do.

That's why I posted the link.

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Anyhoo, CA's get away with more than 18.5% because people are uninformed and don't realize that no, a CA can't charge get more than 18.5 in collection costs, but that doesn't stop them from trying, and it's important that people knwo the difference between what they can and can't do.

That's why I posted the link.

Just an FYI...CA's do not charge the collection costs. They do no calculations what so ever. All interest and collection costs are calculated by the guarantor and electronically sent to the CA's. But of course you know this since you know everything.

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  • 2 weeks later...
Guest Gio7707

Sorry for chiming in here , I am so tired of working so many hours just to try to pay back my debt !! But here is an interesting link as well :

http://tinyurl.com/m2u2d

It's a long time since I was on this forum, but it looks like it's getting interesting here !!

BTW talking about SLM , wow I have some files and links which tells me how shady they are !! Well guess J. Fitzpatrick, chief executive and Albert Lord really don't care and will be playing on the golfcourse (built by the money of the students).

SLM has used it's political clout to shape new legislation that has increased the cost of student loans!!

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