Jan. 12, 2007

More Than a Rabble Rouser?

A man who mobilized a virtual battalion of unhappy borrowers after defaulting on his own student loans — and has since served as a poster boy for the loan reform he’s seeking in media outlets nationwide — is now trying to raise the stakes.

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Student Loan Justice’s founder, Alan Collinge, who estimates that he owes the federal government about $110,000 for what was once a $38,000 loan, formed a political action committee in December to, he says, return consumer protections and “reasonable interest” to borrowers. But while the PAC may be emerging at a time when a new political establishment seems poised to make some changes, it is unclear whether the Student Loan Justice Political Action Committee itself will be a meaningful player in the policy process.

Some observers credit Collinge with giving a passionate voice to an underrepresented group of older, debt-ridden borrowers and, as one advocate for loan reform says, taking what has mainly been a Beltway-based battle “to the streets.” Others, however, play down Collinge’s potential to influence a serious policy debate and criticize him for unprofessional tactics, including expletive-laced correspondence and a penchant for finger pointing.

As Collinge prepares to leave his home in Washington State and step into a 1989, “sort of weird tan,” $8,000 Fleetwood Southwind motor home Monday for a cross-country lobbying tour of the home districts of lawmakers on the House and Senate education committees, he says he will bring to the Congressional discussion “a face [of the debt-ridden student loan borrower] and actually raw emotion as well.”

“It’s very easy to abstract a problem without actually hearing from the people on the ground,” Collinge says. “In terms of my niche, I’m the person on the ground who actually deals with the real people in the country who are having the problems and I’m documenting their stories.” That approach has powered Collinge’s success in linking reporters with sources and mobilizing media coverage over the past two years, including a May spot in a 60 Minutes segment on Sallie Mae in which he was featured.

Since the founding of the Student Loan Justice Web site in March 2005, it has become a repository of stories from across the nation that may not have found a forum in the past. While some deride the site as unprofessional, it is, other observers say, a powerful space, virtual or not, in a world with far too few advocates for borrowers, and where debt is too often perceived as a source of shame to be privately pondered.

“These are people who wake up every day, wondering how they are going to pay their student loans,” says Collinge, who added that he represents about 2,000 members. It’s in that spirit, he says, that he once called Al Lord, the chief executive officer of Sallie Mae, the giant of the student loan industry, at home at 3 a.m. “The point there is that we the borrowers lose countless hours of sleep over student loans; why shouldn’t he get at least one night of bad sleep?” he asks. And it’s in that spirit of accountability that he pinpoints “who did it” — that is, who created the current loan system — on the Student Loan Justice Web site, complete with some contact information.

Questioning the Tactics

Collinge’s tactics have, some in the loan industry say, gone too far and undercut his own credibility — but their distaste for Collinge is not just political, as might be expected, but more personally tinged and, in some cases, still stinging. After all, in one 2005 e-mail to a loan official, Collinge called the recipient “an evil fuck” and “piece of shit,” and asked, “How much money have you made off the backs of defaulted student borrowers? Are you proud of what you have done? What do you say to the hundreds of thousands of people who’s [sic] lives you have committed your career to paralyzing just so your buddies ... can buy second and third homes.”

Student Loan Justice’s advocacy, one lobbyist working on guaranteed loan interests in Washington says, has in the past included “reckless allegations” and attempts to discredit groups in the legislative arena. “You’ve got to be civil to be listened to,” says this lobbyist, who asked for anonymity because of concerns about becoming a target for personal attacks from Collinge and his followers.

“I still stand behind that statement,” Collinge said Wednesday about the 2005 e-mail, recalling (with apparent pride) another “juicy” one he sent as well. “These are the sort of things that we do. This PAC is emotionally driven; there are times profanity is a pretty useful weapon. I’m echoing the sentiments of my members when I use that sort of language.” He sent an e-mail later that day backing down from his earlier statements, however, calling his word choice in the 2005 e-mail “a bit unwise, and probably inappropriate. However, the sentiment behind the note was heartfelt and quite accurately reflective of the sentiment exhibited by the borrowers who I hear from.”

Collinge’s “full speed ahead” mentality has made even some advocates for loan reform — those who are generally on his side of the issue — question his effectiveness at times. “Frankly, the way that they presented themselves in the beginning, it was very extreme. [Collinge] seemed very obsessed; I wasn’t sure what he had to contribute,” says Anya Kamenetz, author of Generation Debt (Riverhead, 2006) and its blog. “As he’s grown in size, and grown in the number of people who are sharing their stories, he’s gained legitimacy. It’s no longer just what Al Lord did, or his private jet.”

Some advocates for borrowers, while not specifically endorsing Student Loan Justice, argue that the more aggressive tactics are just one piece of the advocacy puzzle. “It’s the same debate that people have been having forever,” said Deanne Loonin, a staff lawyer for the National Consumer Law Center, which works on student loan and other issues. “Some people are comfortable keeping it in a ‘professional environment’ where it’s mostly lobbyists talking to each other, and some people are really uncomfortable with other sorts of strategies, the ‘take it to the streets’ strategy. If you take a look at all of the political movements in the United States in the last 100 years, it’s usually involved a combination.”

She adds: “Debt issues and debt borrower issues in particular are something where that ‘take it to the street’ element has sometimes been missing.”

From Advocate to Lobbyist?

But will Collinge’s no holds barred message, so far isolated from the policy debate where more established players like the higher education associations and groups like the Project on Student Debt and U.S. Public Interest Research Groups’ Higher Education Project are doing the heavy lifting, ultimately prove to be lasting and effective? And will the PAC prove to be the best forum for his advocacy, which has been distinguished by his outside-the-beltway style?

Asked whether he fears being perceived as a lightweight in the policy discussions, a defaulted borrower with a Web site as his bullhorn, Collinge says he simply does not care. “Up until now, the current structure in Washington, D.C., has failed the borrowers; at this point, something new is needed.”

He concedes that student loan debtors present a difficult fund-raising challenge, and describes modest goals (especially vis-a-vis the deep pockets of the lenders). Total contributions to the PAC stand at just around $2,000 so far, mostly in $10 to $50 checks from 75 Student Loan Justice members, Collinge says.

Collinge says he has another $6,000 in commitments, and asserts that if he can raise $7,000 to complete the bus tour by May, and another $7,000 after that, the non-partisan PAC will be in good shape to write some small but strategic checks to Congressional candidates, either Democratic or Republican, who support the PAC’s agenda: legislation that would allow those who have been in default for five years to repay only what they originally borrowed, or a “reasonable amount of interest,” or the amount the federal government paid for the guarantee of the loan; grant borrowers the right to refinance their debt to get lower interest rates; ban endorsements of lenders by colleges; return “standard consumer protections” to student loans and make student loan repayments tax-deductible.

“The passion that we bring hopefully will be enough to tip the scales,” says Collinge, who adds that while he’ll be traveling alone, he expects to be met by members at every step of the way. There are no paid employees at the PAC, and Collinge says he works as a volunteer.

Meanwhile, as he volunteers, his debt, now in the hands of taxpayers, mounts — along with fears, in the lending sector, that all the attention Student Loan Justice receives legitimizes scofflaws and detracts from people who are struggling, but trying, to make their monthly payments.

Collinge, who obtained a master’s degree in aerospace engineering from the University of Southern California in 2000, says he hasn’t made a loan payment since he defaulted in the winter of 2001-2, after leaving a staff scientist position at the California Institute of Technology. After seeing his payments skyrocket, he started the Web site and, more recently, requested a review of his case in May from the U.S. Department of Education (around the time his story appeared on 60 Minutes).

He says that he has attempted to negotiate a settlement, and “would be thrilled” to be allowed to pay $60,000 and call it even. After being laid off from a job in the defense industry in December — because, he says, his poor credit restricted him from obtaining security clearance — he decided to do the bus tour full-time. He estimates he owes $110,000 to the federal government now, based on his last bill for about $101,000 a year ago.

“Mr. Collinge graduated with a master’s degree from USC, one of the finest institutions in the country. Somehow, 99.7 percent of the people who graduate from USC with a master’s degree are able to pay back their student loans on time and enjoy the benefits of their education,” said Tom Joyce, a spokesman for Sallie Mae, Collinge’s original lender and a prime target of his wrath. “We certainly wish that Mr. Collinge would spend his money, time and energy repaying current and future students who rely on the student loan program and rely on people to pay back their debts so they can afford to go to college.”

Collinge says he hopes to be back to work as an engineer, “writing scholarly papers,” within two years, after the PAC establishes itself and, hopefully, he says, meets its goals. Within one year, he said, Student Loan Justice will ideally have “freestanding, semi-autonomous chapters in every state that can function on their own.”

Only time will tell whether or not he’ll make a difference politically before that happens, say observers like Loonin of the National Consumer Law Center and Robert Shireman, executive director of the Project on Student Debt, which is widely credited for leading the effort to put student loan issues squarely on the political agenda in Washington. “They’ve certainly been in the public discourse and quoted. I don’t know whether they’ll have an impact in terms of the political action side of things,” says Shireman. “Borrowers who are most upset about the way they’ve been treated have gone to Student Loan Justice as the place to tell their stories. Whether they can raise a lot of money to really have an impact as a political action committee, I don’t know, but it’s been interesting to see the development of the organization.”

Kamenetz, the Generation Debt author and journalist, says Collinge might prove successful in politics, given the weight of his supporters that he will carry with him. Even without a PAC behind him, she says, “He’s been remarkable in getting the ear of Congressional staffers. There have been times that he’s referred me to Congressional staffers that he’s had conversations with.”

The lobbyist working on guaranteed loan interests in Washington doubts Collinge will make a big impact on the legislative front. “I’d be extremely surprised if they were able to collect funds to have a viable political action committee,” given the indebtedness of the PAC’s main group of potential supporters. The lobbyist adds that, unlike many other groups lobbying for loan reform, there’s no evidence that the Student Loan Justice organization has done the homework it needs to go out to play legislative hard (or soft) ball. “To the extent that they want a seat at the table, they’re going to have to do the homework.”

The reality is that as Collinge starts motoring toward Portland, Ore., his first stop, he’ll tread down a path already blazed. With the word in Washington that the new Democratic leadership hopes to halve the interest rate on many student loans and cut subsidies for banks, he is, regardless of his own impact so far or in the future, driving into a relatively friendly climate where a lot of the groundwork has already been laid by groups like Shireman’s and the U.S. PIRG.

“I think there are a lot of people who are eager to have a conversation about repayment,” says Becky Timmons, assistant vice president for government relations at the American Council on Education. Timmons says she can’t evaluate the potential of the new PAC on its merits, but says its legislative agenda isn’t out of line with what’s being proposed elsewhere: “Since a good portion of their agenda overlaps what lots of other student aid advocates are also concerned about, they may make some progress.”

— Elizabeth Redden

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Comments

You’re forgetting one important thing

We all went to school to better ourselves and have been completely taken advantage of by corps like Sallie Mae who expect us to pay 4 times the amount that we borrowed. Some of us have had medical problems that have inhibited our ability to pay off our loans yet that doesn’t stop the harrassment. People’s disability gets garnished. Periodically, I have the overwhelming feeling that I may as well jump off a bridge considering this life will never be what I expected it to be all those years ago when I took out those loans.

MyLifeIsOver, at 4:20 pm EDT on October 5, 2007

Debt and Diction

While I typically try to maintain a professional tone, I can tell you as one who has sent a story to Mr. Collinge that it is difficult to do so at times. This IS an emotionally charged issue that evokes and (sometimes) deserves language other than that spoken on THE HILL. I agree expletives are usually less than welcome in the professional arena, but the reality is they are used more often than some would like to admit. It is a logical error to dismiss ideas and people based on the eloquence of their presentation.

As to the PAC’s success, I wish them well, but from a practical standpoint, it makes no difference to me who rectifies this mess of educational funding. It can be Alan Collinge, Ex-Senator Allen, or Tim Allen, for all I care.

So long as loan programs are fair, monitored, and serve the right purpose, allowing every student to pursue higher education without becoming indentured servants for life, outside of violence and crime (and we could argue that some lenders and others have already committed crime), I support whatever action it takes to get us there.

kgotthardt, at 8:50 am EST on January 12, 2007

Thank You

Thank you Elizabeth Redden for this enlightening story. I’ll do my best to get the word out. I just looked over the “who did it” section of Student Loan Justice, and developed this strange sort of “Enron” feeling about Sallie Mae. — TL

Tim Lacy, at 12:30 pm EST on January 12, 2007

Hmm...

So I post a comment thanking Ms. Redden for the story, add a link to “Student Loan Justice” deep on my web log, and a few hours later Sallie Mae visits my site. Hmm... I hope my studiously on-time loan payments don’t start turning up mysteriously late. I’m sure they’ll blame the mail. — TL

Tim Lacy, at 3:00 pm EST on January 12, 2007

Sure Bet, or Fiction?

Hillary Clinton squares off against the Evil Empire of Sallie Mae

The 110th Congress has excellent opportunity to set a new course for American education. Restoring state and local control should be its destination.

According to the U.S. Department of Education, over the last three decades, the ratio of federal aid in the form of grants versus loans has changed significantly from 77% grants and 20% loans to the exact opposite – 70% loans and 20% grants. This trend has resulted in a 50% increase in the average amount of student debt in the last ten years alone. Experts are unanimous in their view that America needs to reverse course in order to ensure college access for all students and to insure that our nation will be able to compete with other countries in the years ahead. But instead of passing laws to make college more affordable, the Republican controlled 109th Congress increased the interest rates on college loans to a fixed rate of 6.8% for students and 8.5% for parents and passed a tough new law designed to restrict competition among consolidation lenders. For years students and parents have converted their variable-rate federally guaranteed college loans into fixed-rate federal consolidation loans in order to lock in favorable interest rates, in much the same way that homeowners do with their mortgages. And, for the same reasons. But effective July 1, 2006, the vast majority of students and their parents who have already consolidated, or who wish to consolidate in the future, are legally barred from re-financing again, no matter what other lender might offer them a lower rate. Legally barred from ever refinancing? Hard to believe, but true. And here’s how it happened. Simply stated, Sallie Mae and most of the other big lenders don’t want the lure of lower rates tempting their customers to switch to competitors. So, they called upon the Republican leaders, many of whom had accepted large donations and trips aboard lender jets to luxury golf resorts and other desirable destinations, and got them to attempt to hide this ugly anti-competitive legislation in the Budget Deficit Act of 2006. When consumer groups such as the American Student Association began complaining about the proposed no-more-refinancing law, Sallie Mae lobbyists countered by spreading misinformation that was designed to lead people to believe that a borrower moving their loan from one lender to another would cost the taxpayers money needed in other places. The truth is, in fact, that the borrower savings would all come from the new lender’s willingness to accept less profit. In the end, Sallie Mae, which, according to Fortune Magazine, is one of America’s most profitable companies, won the battle. The losers were America’s millions of student and parent borrowers who have been denied the opportunity to negotiate lower rates for themselves in an open market.Then, adding insult to injury, Sallie Mae, not unlike a football player spiking a ball after a game-winning touchdown, began celebrating. Tom Joyce, a Sallie Mae VP, was quoted by USA TODAY as saying, “The consolidation loan program was never meant to be a re-financing bonanza for students.” But later, his crowing grew even louder when he told the Orlando Sentinel, “Smaller corporations will now think twice about getting into the student loan business.”

Such ugly statements by Sallie Mae’s chief media spokesperson confirmed what industry insiders already knew: Sallie Mae pretends to have the best interests of students and parents at heart, while they covertly work to pass anti-competitive legislation that cost student and parent borrowers billions of dollars, most of it finding its way to Sallie Mae’s bottom line.

Can you imagine the uproar if homeowners were suddenly told that they could no longer re-finance their home loans? The Democrats are trying to do something about these issues. They have proposed a 50% cut in student loan interest rates (Reverse the Raid on Student Aid Act; H.R. 5150 and the Senate’s RSSA Act), and Hillary Clinton’s Student Borrower Bill of Rights (S. 3255) proposes to repeal the laws banning the refinancing of Federal Consolidation loans and other predatory lending practices. But there is no guarantee that either of these proposals will actually become law.

You may voice your opinion on these issues by calling the following numbers:

U.S. Senate: (202) 224-4543 U.S. House of Representatives: (202) 226-2068.

It’s up to you, now.

C. Victoria PatrickEducator, College Administrator, Financial Adviser (retired)

Victoria Patrick, at 6:00 am EST on January 13, 2007

what’s wrong with this picture

I sent this to Alan as one who has been involved with this movement to help people overwhelmed by student loans. I am one who has been paying for 10 years and for the first 2.5 years my debt when up instead of down because I went into forbearance for one year then the bank who had my student loan gave me payment that did not even cover half of the interest they were accrueing daily.S0000 — I am reminding Alan that those of us who are paying are being ignored.

Alan. While you’re out there, PLEASE remember to point out that those of us with old, consolidated loans, who are paying out the behind with >7 and 8% loans also need a break. All I hear about is how they are going to help those whoes debts have ballooned due to non-payment or going to lower rates for current students and those who will consolidate in the future – and mind you I think that’s great – but I am really tired of falling through the cracks because they fix things too late to help me, and don’t add a grandfather clause. They need to grandfather us into this interest rebate and reduced interest rate thing. Can you believe the one reduction the government has given me is that IRS reduced my student loan deduction because I earned “too much” money, despite the fact that the entire amount of my second job goes to paying student loans to the tune of $8500 a year. So they add the $8500 to my income and then tell me I earn “too much” money to take the “whole” whopping $2500 deduction. If I didn’t have the second job I wouldn’t be able to pay this loan at all. So technically, I get punished for paying my student loans. Yet, so far I have not heard one word about interest rate relief for people like me who are actually paying off these already consolidated loans. It’s a Catch 22 and it gets really old.

daniele, Juv. Prob. Officer/drug counselor at Maricopa County, at 12:41 pm EST on January 17, 2007

private student loans

Congress is considering relief for interest rates on Stafford loans in July if the Senate goes along with it. We all know those loans aren’t the problem. It’s the private loans held by Sallie Mae, many at over 17.375%. Our son has 4 private loans 2 of which we co-signed for to get a better rate and had to mortgage our house to pay off last summer since we knew he couldn’t pay those. The beginning balance 2 1/2 yrs ago was $50,300 and grew to $67,000.He is paying on $50,000 more at over $575 a month at the huge interest rate. The stafford loans will become due next June for another $11,000. Where is the relief for those like us?

beccie small, at 11:10 am EST on January 18, 2007

Don’t attack the messenger

I felt compelled to comment on the personal attacks made on Alan Collinge in this story. Particularly, the sentiment that he should concetrate more on paying back his loans as opposed to trying to fix a long-broken system. (Basicaly shut up and take it).

Collinge borrowed somewhere in the neighborhood of $30,000 which tripled to $110,000.00 in interest and penalties when he defaulted. In fact, many of the people who posted stories on the Student Loan Justice website have had a similar experience.

The article, with its Republican overtones gave the naive impression that all one needs to do to pay back student loans is to work hard. It strongly implied that those who default on their loans are all wonton slackers who needlessly burden the taxpayer. The truth is just the opposite. The government has been slashing aid for education for more than a decade while universities, both public and private have been increasing their tuition at staggering rates. This one-two punch forces students to either borrow an increasingly large amount of funds or forgo an education and with it, their chances at gainful employment.

What the article, and the lenders fail to take into account are the realites of life. That, even for the most hardworking or civic-minded persons, one significant bout of illness or unemployment can throw you so far under the proverial bus that you will never again get back on your feet.

I have never personally defaulted on a student loan. I do however, have more than $100K in debt, in good standing, from law school. Half was a Stafford loan, the other half private loans. (The American Bar Association estimates the AVERAGE law student debt to be $88k).

I entered without undegraduate debt, because I had attended a state school. Unfortunately, my great home state of Massachusets has no accredited public law schools at the time, and still does not.

September 11, 2001 hit midway through my time at law school. It subsequently slowed the NY legal market to the point where classmates (I attended a 1st tier school) were unable to find internships, either paid or unpaid. Even Legal Aid was turning people away. Every NY government agency imposed a 2-year hiring freeze, and classmates with job offers from agenies and private firms alike had their offers rescinded.

I graduated without a job and remained completely unemployed for 9 months following law school. At least one classmate was officially homelessfor several months after graduation. Despite looking for work, I was uable to land even a temp job because the market was so bad. However, my loans became due within 3 months of graduation, and so I used 6 months of forbearance. By the end of the 6 months I had landed a job making $15.00/hr with no benefits whatsoever and began paying $450.00/mo on my student loans while paying for rent, groceries, etc.

Fast forward 3 years and I have landed a much better job, with the government. I am by no means raking in money, but am making twice what I made at my former job. After 3 years of full, timely payments totalling more than $12,000.00, my loan amounts are nearly identical to what they were when I started. My full loan payments are now approximately $865.00/mo.

Being a single person with no children does not place one in a favorable tax bracket, an I pay in the 25-30% range. At tax time the INTEREST paid on the loans is easily double the maximum allowable deduction of $2500. Also, despite working for the government, neither any state nor the federal government currently offer a comprehensive student loan forgiveness program for government attorneys.

Of course, in the same condescending manner in which this article was written, I am certain that some readers will snicker and guffaw about how there should be more than enough money to pay back the loans. I did not come privileged background and thus have no “home” to move back to to help save money. I have no cable, only basic phone service, ride public transit 100% of the time, no modern electronics such as I-Pod or flat screen tv, and buy all my clothes at discount stores.

Despite my thrift and devotion to repaying the loans, I am keenly aware that if, for whatever reason I become disabled or otherwise unable to repay my loans, I will never recover. Under the current terms of my lender agreements, if I fail to make a payment within 90 days, they automatically tack 30% of the principle back on the loan as a penalty. My interest rate will also increase to more than 20%. While my current system is difficult, that would be impossible.

My reason for supporting Student Loan Justice stems from anger at a system that is designed for people to fail. That no matter how hard you work or how dilligently you make payments, when you stumble, you will be trampled upon for the sake of corporate profit.

Student Loan Justice, as I understand it, does not support flagrant disregard for student loan debt obligatons. All it asks is that loan holders be given a reasonable opportunity to succeed at paying off their loans. To be granted reasonable forebearances based on unemployment, illness, or national/ natural tragedies. To be given reasonable treatment in the case of a default, not unlike the treatment currently given to those who owe back taxes.

As stated before, Alan Collinge saw his loans triple after a default and simply walked away. If someone tripled the mortgage on your house, would you continue to pay? Or would you simply walk away? Of course, in the case of a mortgage, the proceeds from the subsequent forced sale of your home would offset what you owe. Not so in the case of Stuent Loans.

Another reason not to attack the messenger; his background. Alan Collinge is just an average guy. He did not go to school or train to be a politician. He is not versed in spin or rhetoric. He is a stright-shooter who says what he means and means what he says. Rough around the edges, but honest. That’s what members find to be admirable about him and what the politicians and their big bank buddies hate.

Emily, at 6:25 am EST on January 19, 2007

11USC 523 (a)(8) is Going Bye Bye

Just wanted to let everyone know I have a motion in the Bankruptcy Court for the Souther District of CA. where I HAVE MADE NUMEROUS CONSTITITUTONAL CHALLENGES to the law barring student loans from discharge in BK. Motion will be heard 2-26-07-2PM in San Diego.

There is a good chance the law barring student loans from discharge in BK will be struck down as violating equal protection and substantive due process (among other reasons).

You want to come watch the summary judgment motion and see the arguements in person>>> come on by-Department 4-room 328.

PAul, BK Borrower, at 1:05 pm EST on January 19, 2007

Collinge

My most recent collection agency was reprimanded by the ombudsman’s office (loan recalled) and my friend of the court brief for a guy in Minnesota led to a settlement—his collectors used the SAME tactics as my collectors. I also have a letter on HEAF letterhead admitting the collectors had unlimited power to just go ahead and change payment dates. 17 years ago I contacted a Senator and his own aide said he was being “stonewalled". We need Collinge to stand up where Congress did not.

Dan Lozer, Pastor, at 9:35 pm EST on January 19, 2007

Sallie Mae

I find myself kinda like Allan, a little rough around the edges and very much understand his flustration. I am a 73 year old retired person who signed for a young man that wanted to attend a university and his parent refused to help him. Me and my big mouth said I would help him. My intent was to take him to my bank and co-sign a loan for him. Next thing I knew here he comes with a credit application and ask me to complete it. There was nothing but a credit application which was to be placed through Chass Bank; however, guaranteed by Sallie Mae. The young man told me the interest rate would be three percent and he would repay this $300.00 per month. I reasoned this would be repaid in a little over a year. I inquired as to the promissory note that should be be attached. He told me that the financial aid officer at the university led him to believe that it would be prepared and he would have to get me to sign. Trust and ignorance on my part. Shortly thereafter I had bypass surgery and was a litte spaced out for a few months. Several months later here comes thit notice concerning my student loan with Sallie Mae. I called Sallie Mae and requested a copy of the promissory note that bound me to this indebtiness. I being in industrial lending all of my adult life could not believe the run around I received form a bunch of employees that seemed to be so ignorant of the law and of handling of their information. This all started in the fall of 2003. I have maintained a record of all conversations I have had with this bunch of folks and made notes of their irresponsible statements. I, for three years kept requesting a copy of the promissory note the contended the obligated me for this student loan. All I could ever get them to send me was a copy of the credit application. Sometimes it would have things blacked out on it and sometimes they would use a yellow highlighter. I finally sometime in the later part of ‘06 received a what would appear to be a promissory note. There were not signatures of this something like a nine page document. There were not initials of acknowledgement, just nine pages of a document Sallie Mae constrewed as a promissory note. I question the legalility of this instrument not being signed and the pages not be acknowledged. I also question the way this bunch compounds interest and charging interest on interest. I’m not a lawyer; therefore I mkake no legal opinion at this time. I do have the kid making payments on the loan. Do I understand Allan’s flustrations with this bunch, do I understand his abusive language toward Sallie Mae; you bet I do. I believe this mess all starts with the universities encourageing unaware students and enticing them into taking out student loans. Just how do you thing the deans and presidents of these universities make the big cushie salaries they take home. They could care less as to whether students get an education. Someone up above mentioned Enron; I fully believe our education system is broken and is a bigger mess. Allan maybe be rough around the edges, but he has ethics and even though the author of the article attempted to make him the butt of the authors private opinion, Allan is on the right tract. The writer should have such chacter.....forgive my spelling, but judge my sincerity in support of Students for Justice or PAC

H Ron Stephens, retired, at 9:35 pm EST on January 19, 2007

Student Loan Injustice

Hi,

I back Alan Collinge in the fight against student loan injustice. I know he is emotionally driven, angered by the raw deal student borrowers have been forced to comply with. So I pose these questions. Why is he so angry? Why has he taken so much time and effort from his personal life to dedicate to the development and formation of his PAC?

Defaulted student loans is big business. In Alan’s personal case his defaulted student loan balance went from $38,000 to a whopping $110,000! So what, he defaulted on his student loans, he should pay them back after all, right? Sure he should if he can. But from $38,000 to $110,000 is almost three times the original loan amount, not to mention the new interest he will have to pay on the higher balance. The reason he’s angry is crystal clear. If he refuses to pay the government has made it easy to collect on student loans in default without taking the individual to court for wage garnishments, seizure of income tax refunds and the like.

Alan has written some emails with profane language and even insulted a few people in the process. Hmmm, sounds like politics to me don’t you agree? What has to be done to fix the problem? Lobbying to the legislature for change. If you’re going to mix it up in the legislature you had better learn how to operate in their arena. That’s what Alan is doing.

He is gaining valuable experience by forming his new PAC and lobbying across the country to help educate the Politicians and the public about the serious injustice regarding student loans. If he makes people angry because of his passion and his rhetoric concerning the issues, then he does. Noone has had any problem making student loan borrowers angry because of the unjust and unfair collection practices used.

As the word gets out and the student loan borrowers continue to band together change will come. It may not be tomorrow, it may not be this year or next, but change will come. That’s what Alan is doing. The gears are in motion and the momentum is slow. There is plenty of energy out there and he is searching for it. Sometime in the future the momentum will be able to perpetuate and exact a change in policy.

You Go Alan!

George Riley, Alan Colling at Consumer / Constituent, at 9:35 pm EST on January 19, 2007

“Just keep sending in the payments...”

After paying interest payments to the banks and then Sallie Mae for over ten years, on loans that were borrowed in 1984-, it dawned on me, “Hey this debt balance is going up, not down.” So right after graduation in 1994 I sold my home (I did not have the luxury of reinvesting in a home and paid a high penalty) and I paid off the higher interest rate loans in toto, then several of the smaller loans, and a couple of the larger ones, a total of seven. I was expecting to receive all the original notes, the balance to go down, therefore being more manageable however that is not completely what happened. I discovered that it is difficult to obtain information about the “specifics” of my loans. The discovery of data concerning my debt has been an ongoing investigation that consumes a good deal of my time. From my credit report I learned that my paid in full loans were transferred to another affiliate of Sallie Mae’s in another state. Although I have paid over $30,000 most of in in large paymenst I was told by another agency, that is designed to “assist” people in my situation, that the payments I had “negotiated” to “pay off” the loans in full were actually “applied” towards the interest. You would think that after (over) 20 years of interst at 7% on $17,000 that the balance would go down. Not so. I now owe over $24,000, 85% of my payments go towards interest and do not even touch the principal, although since 2005 my balance has gone down by $1000. The “payment” schedule I was sent by the institutions demonstrate a flexuation in the balance that is not accounted for, it is a yoyo balance. In addition, I have disputed the balance owed for many many years to no avail, I NEVER received an amorization schedule which I have consistently requested and the “reps” I speak with tell me, “Just keep sending in the payments.” They won’d tell me when the bill will be paid, when it will hit the principal, and this accounting style that has no accountability has affected my credit so I don’t qualify for reasonable rates, living expenese are affected so I am unable to make higher payments and it IS a ficious cycle...Prior to education, before I decided to “give back,” work with disadvantaged youth, students, I never had any financial issues. Only when I linked up with the least of our society have I been punished, suffered, and questioned, Why do I care so much? Why do I let it bother me, that my account is not made right? I also question myself...Why I have no peace at night and because of this I appear to be a person that is unable to pay back a debt when, in fact, it has been paid almost two times over. And I rip up all the master cards, visas and american express credit cards that come to my door because due to this debt I do not go on vacations to Hawaii or any other sunny place every year, or own any large appliances like a washing machine, or own cars, homes, expensive jewelry and question why I would, at least, like to have the option for these things and I feel bad to want them while people elsewhere have nothing. I really want to send in my payments and see, each month, that my payments have significance, that the balance goes down. Give me a date, at which I can die in peace. Instead I hear, “Just keep sending in the payments...”

Rita, at 9:35 pm EST on January 19, 2007

Collinge-one correction

I wrote “HEAF” letterhead. HEAF is the one the senator’s aide said stonewalled him. FSA is the letterhead allowing the change of payment dates as legit. Just trying to keep the roster straight. Dan again

Dan Lozer, Pastor, at 10:20 pm EST on January 19, 2007

Interest rate bonanza

I must confer with an earlier post by “Rita” about compounding student loan interest and how it makes progress impossible in student loan repayment. I have nearly $100K in loans. Alhough approximately $43K is spread out among 3 private loans, the lender lumps them all together on one bill. I have made more than $12k in payments on this $43k over the past 3.5 years and the balance has not budged.

I have found advance payments (the surest way to get ahead on interest and pay down debt) are made nearly impossible with student loans. If you send in an extra payment, they simply move your next payment back another 30 days so you see no monetary benefit.

I actually had a bar exam loan in the amount of $4500. From the way they calculate interest and aggregated it with the other loans, it would have taken me 20 years at $50/mo to pay it off. So, I consolidated the balance onto a credit card using a balance transfer check. As directed by the lender, I sent the check along with a letter (and immediately after my most recent payment) explaining that the check was meant to pay the bar loan in full. The lender cashed the check, but applied it evenly to all of the loans, and it barely made $200 of difference. It took 3 phone calls before they relctantly applied the payment to the bar loan.

Now, I did the transfer because my private loan paymengt was $285.00/mo and I wanted to reduce my monthly payment. I figured that paying off a loan that I was being charged $50.00/mo for would reduce my payment to $235.00/mo which it did for a short while. But, the monthly payment has since grown to $365.00/mo which at 10% principal and 90% interest, which amunts to approximately $36.00/mo principal and $329.00/mo principal. And of course, the loan payment is continually readjusted to ensure that I will pay if off in 20 years. With 3.5years down and no progress, at this rate, I will soon be paying through the nose.

I am considering future balance transfers as my credit cards quite frankly offer more competative rates. And, if push ever comes to shove, the credit cards can be restructured or charged off in bankruptcy, unlike the student loan.

I am frankly surprised that more banks have not entered the frey with private loan consolidation offers. There is clearly a lot of room to offer lower rates and turn a good profit. If I had a 20 year mortgage for the same $100k, my rates would be lower than the 7.9% and 9.1% I am currently paying on my private loans. And I would be building equity and have a significanty larger tax deduction than the paltry $2500 offered for student loan payments.

Emily, at 8:30 am EST on January 21, 2007

McKeon/Boehner/Blunt

There are three problems with the student loan process and each requires as much attention — “aggressive” or “professional.”

1. Single Lender Rule — this is legislation that provides an anti-competitive exemption to the Student Loan Industry. House members McKeon and Boehner were paid well by Sallie Mae for this legislation.

2. Prohibition against Reconsolidation — once consolidated, those with student loans can never reconsolidate again. Essentially, think of this as any other financial instrument in the free markets, i.e. a mortgage. You can refinance a mortgage depending upon lender service, cost, etc as much as the market will bear. With a student loan, you can consolidate (combine individual loans) once and never again. Again, this is legislation paid for by Sallie Mae through their stooges in the House.

3. Absorbtion of State programs by Sallie Mae. Example — the Blunt family of Missouri is represented by a father in the Senate and a son who is Governor of Missouri. Like Buck McKeon (one of Sallie Mae’s Stooges who married a lobbyist), one of the Blunts, I think it is the Governor’s brother, is also married to a lobbyist. The Governor, accepting the maximum authorized contribution from Sallie Mae, is proposing to sell all the States Student Loan assets to Sallie Mae. This will be catastrophic for the students and graduates of Missouri in the MOHELA program. Sallie has been successful in some arenas — but despite all the lobbyists and political cash paid out — they have thus far failed in Pennsylvania.

Sallie Mae execs have pulled nine figures in compensation in the past few years. While education is far from effiicient — educators or College Presidents are not phoning in bids to buy Major League baseball teams from their private 18 hole golf course on their estates as did Albert Lord, Chairman of Sallie Mae.

Frankly Speaking, at 1:52 pm EST on January 22, 2007

Great

I had started a blog “anti-sallie mae.” As another reader listed, the only visitors really were from at IP within sallie mae. I don’t doubt that a lot of people are able to pay back their loans on-time as in this article, I’m just not one of them. 2 layoffs resulted in all I paid being eaten up by fees, and i’m $15000 more in debt, you, the taxpayers, are paying sallie mae this incredible giant, their money right now as I sit at a computer, working finally, but at a temp job. If you are reading this and want any sort of reasonably comfortable life, NEVER, consolidate with Sallie Mae, never ever ever ever! You can do it, pay back as origianally borrowed and save yourself tens of thousands of dollars. Please do this for yourself, say no to sallie mae.

Kathy, at 3:05 pm EDT on April 27, 2007

I graduated in 1995, and my husband never was able to finish. My loans were 32K and his were at 23K. When I tried to pay extra or pay ahead, as I have with every other consumer loan, with a note to “apply extra to principle", I was informed that I could not do that, that any extra was put on the interest accrued to date, on the next month, on blah blah blah.

Our teen-aged daughter has two serious life-threatening illnesses that I am constantly dealing with, we have two aging and in need of care mothers, I have only worked marginally in my field 5 of the last 12 years, am now outdated on my credentials and cannot afford to go back to school to update them.

We have paid OFF 5 hospitals, 4 cars, all the doctors, do not use credit cards at all, one starter house, have a current mortgage and have not defaulted on these loans — but we have paid the original amount off once, and still owe 25K and 43K on these bloody student loans, courtesy of Sallie Mae.

I am now over 50 and these misbegotten filthy slimes are the bane of my existence. I would have paid them off too if they had actually had to follow consumer loan law — but guess who’s exempted — so there is literally NO WAY to get ahead of them ever... it’s rigged, and we’re screwed.

Dot, at 3:30 pm EDT on May 11, 2007

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