I wrote this because I think people need to know how Sallie Mae operates, and I wrote this because I want people to see that the system is broken. But mostly, I wrote this because, as much as I need help, and as much as I feel like I am being forced into some kind of dystopian economic slavery, I know that there are many others who are worse off than I am. I want help. They need help. But my hands are tied. I feel that the only thing I can do is share my story. If nothing else, perhaps it will help someone make better decisions when planning for their education, and that’s something. So here we go.
A Brief Overview:
I started school in 2004. I started working towards my Ph.D. in 2011 and should graduate within the next two years. I currently have loans amounting to 211,716$
Since I am still in school, most of these are deferred (this means that you do not have to make any payments), and they will be deferred until I graduate (when, hopefully I will be getting full time employment and starting my career). However, 85,765$ of my debt is private loans from Sallie Mae. I have no idea how or why I got private loans instead of federal loans. Perhaps it is because my parents made too much money(?). Perhaps it is because I had no clue what I was doing(?). The former is a possibility, as these loans cover my undergraduate degree, and I received federal loans for my Master’s and Ph.D. (when my parents income no longer applied). Either way, I have private loans. I got all of them over 5 years ago.
The Story of the Fall:
In January, I received a letter from Sallie Mae notifying me that some of my loans were going into repayment. This has happened before. Each time, I called Sallie Mae, told them that I was still in school, and they said not to worry about it. All they needed to do was update my records to show that I was still in school, and the loans would be deferred. This make sense, as most students cannot go to school full time and, simultaneously, work enough to make payments on student loans.
The monthly payment on my private student loans amounts to 666.01$ (an ironic number, no?).
Per usual, I called Sallie Mae to tell them that I was still in school. The representative said that they just needed confirmation of this, and my loans would go back into deferment. The representative told me to wait and see if the system updated in a few weeks. If it didn’t, I was told to call them back. I waited two weeks, and there was no update. So I called Sallie Mae again. They told me to contact the school and ask the school to fax over verification of my enrollment. The reassured me, telling me not to worry about the loans and that I did not, in fact, owe them any money. So I called the school and asked them to fax the proper documents to the number that the Sallie Mae representative gave me.
Another two weeks (or thereabouts) goes by, and there is still no update. At this point, the payment was due. So I called Sallie Mae again, called the school again, and then called Sallie Mae to verify that they received the documents verifying my enrollment. The Sallie Mae representative told me that they received the documents, but that the system may take a few weeks to update, and not to make a payment in the meantime. I was told that, once they got my information up to date, any late fees would be refunded, and I would not owe anything.
Another two weeks go by, and I start getting calls from collectors (Sallie Mae representatives who were calling me because I hadn’t paid my bill). They called twice a day, every day. Each representative that I spoke with told me the same thing: They had received confirmation that I was still in school; they didn’t know why my records had not been updated; I did not owe any money; I did not need to make a payment, and that things should get updated soon. Finally, after about three weeks of this, I asked a representative if there was a way to stop the calls while they updated the system.
The representative delayed the calls for a week. Then they started again.
At this point, the bill was over a month past due; however, the Sallie Mae representative again confirmed that I did not owe any money, that I should not pay, etc. This representative delayed the calls for approximately two weeks. Repeat this process for 88 days. After 88 days I got sick of running around, and I asked to file a formal complaint. The representative I spoke to was very apologetic, confirmed that I did not owe any money, and could not understand why the system had not been updated. I was told that a “Customer Advocate” would contact me within three days. This was on Friday April 4th, I believe.
On that Monday (April 7th, 2014) I got a call from Sallie Mae. It was not a Customer Advocate. It was another one of their collectors calling for payment. I explained the situation to this representative (as I had the previous 10 or so representatives that I spoke to). He said that all the previous representatives were wrong, that private loans could only be deferred for continued education for 48 months.
I had never heard this. I was never told this. Even Sallie Mae representatives (like the previous 10 representatives that I spoke to) seemed to be unaware of this (insane) policy. It is not stated in my promissory note. I cannot find it on their website. It makes no sense, as no one can get through a Master’s and Ph.D program in 4 years. But I have spoken with 4 other representatives; I asked them about this policy, and they confirmed that this is the policy. It’s just that no one can find this anywhere in writing on the website or promissory note. The supervisor that I spoke with tonight said that he would put in a “research request” for me. This is when Sallie Mae representatives track down the information for you, and send it to you in writing (and hopefully tell me where this information can be found on the site).
A Breakdown of What I Earn, What I Owe, and My Options:
As I said, I am currently pursuing a Ph.D. My Major is English Literature. I study at the University of Southern Mississippi, where I have a teaching assistantship that pays a stipend of 10,000 dollars a year. To be clear, I make 10,000$ a year. My rent is approximately 565$ a month.
The monthly payment that I am expected to pay on my private student loans is 666.01$
Of course, I can’t pay that. That is more than I make a month. A lot more. So I tried to call Sallie Mae to see if there is some way that I can defer my loans. Surely, there must be some way, and I am only about two years from graduating and they have already been deferred for years. But there isn’t.
If I extend my loan period to 30 years, I will still owe a little over 300 dollars a month. That, plus my rent, leaves me with -32$ a month. Yes, that is negative 32 dollars a month. If I decide to make interest only payments, I still owe about 300$ a month (the difference is only about 50$, so you see how much I am paying towards interest and how much I am not paying towards the principal). Income driven repayment options are not available for private loans. I could attempt forbearance, but that is only good for a year, and so it would leave me in the exact same position next year.
So there we are. No options.
Bad Practice and Bad Policy:
I did attempt to set up interest only payment, but Sallie Mae requires that the first 15 months are direct withdraws from my bank account. That means that I don’t get to decide what bills are most important; Sallie Mae demands that I pay them first. This could mean that I am unable to pay my rent, car insurance, or health insurance ( or pay for food, heat, or gas to get to work) because I have to pay my student loans.
So I didn’t set up the payment. How could I? I can’t guarantee that I will have the money, and I can’t risk not being able to pay the rent or buy food.
So I am still trying to work out what I will do. In all likeliness, I will come up with something. I mean, it’s not like I will lose my apartment and end up on the street, right? That’s not a thing that really happens to people…?
And I know that some would say that it is my fault, and that I should have known what I was getting into. This is a fair point. But I would like to reiterate that the promissory note does not stipulate that in school deferment will only last 48 months. And every thing that I saw on the Sallie Mae website led med to believe that the loans would be deferred as long as I was in school. Moreover, after a half hour of searching, I still can’t find the policy on the website (I am sure it is there, I just can’t find it). Also, I am not arguing that I shouldn’t have to pay the loan. Rather, there is no logical reason that the loans cannot be deferred until I graduate and start my career. I have been going to school for 10 years. I will have my Ph.D. shortly. Surely, giving me a little bit longer could not hurt. Surely, allowing me to become a functioning member of society is more productive that forcing me to stop my education when I am just shy of getting my Ph.D and starting my career.
A Final Complaint:
As I said, I have been in school for 10 years. I am 2 days away from taking the most important test in my education (the Ph.D. comprehensive exam). I got to spend the days, weeks, and months leading up to this test on the phone with Sallie Mae representatives (10, at least), who all told them that I don’t owe money, only to hear a week before my test that every other representative was wrong and I do own them money. Starting last week, (Monday, April 7th, the same day that they told me I actually do owe them money) they began harassing my parents because the payment is now three months over due. They did this in spite of the fact that I told them that I would review my finances and figure out a payment plan with them. Ordinarily, individuals get a month’s notice for payment in order to figure out their options. Yet, Sallie Mae has given me no time to work out a plan, despite the fact that (I feel) they are largely responsible for creating this situation.
It’s a scary, broken world.