Over 50,000 college grads across the country have joined a campaign on change.org urging student loan giant Sallie Mae to stop charging unemployed borrowers a $50 fee for forbearance on their loans, according to PRWeb.
The campaign was launched by Stef Gray, a recent college graduate who took out private loans through the company and was hit with the $50 fee when she requested a delay on the repayment of her loan due to unemployment. After graduating, Gray found herself without a fullt-time job and with no co-signers for her loan, since her parents had passed away. As a result she was forced to go into forbearance, or suspend the repayment of her loans.
Gray told PRWeb, “For Sallie Mae to tack on these extra fees just to pad their profits is to kick people like me when we’re already down. Charging a forbearance fee is wrong, and more than 50,000 people who agree are standing with me.”
The campaign is gaining strength as millions of student loan borrowers could be seeing the interest rates on their loans rise significantly unless Congress extends a rate reduction passed in 2007 and set to expire this July. While the current interest rate, based on the 2007 reduction, is 3.4 percent, the rate could double to 6.8 percent, adding more fuel to the fire of protests against student loans.
As of Friday afternoon, nearly 70,000 people had signed the petition.
Friday, January 27, 2012
Thursday, October 6, 2011
Government theft of your cell phone time
Recently it was reported in the news that the Obama administration wants to pass a law that allows 3rd party parasites (3rd party collections agencies) to be able to use robo-callers to call the cell phones of people in default.
BAD IDEA.
In America, unlike other parts of the world, a person in the US pays for Cell Phone Minuets for both incoming and outgoing calls. The result of this is telemarketers and 3rd party collectors are not allowed to call these numbers.
Some want to switch the American system to one like that of many European systems, where the person only pays for outgoing calls. This would allow the telemarketers and others to call the cell phone numbers.
There is just one problem. Many people switched to cell phones BECAUSE they do not allow telemarketers to call. The so called "do not call list" is not working the way it should and many have found that having a cell phone is just as good as having one home phone.
In the case of student loans, many people in default have pre-paid phones. These phones require you to purchase minuets ahead of time. Many of these people use the phones for emergencies only, or when they are trying to find work.
IF the Obama administration gets its wish, the 3rd party parasites robo callers will be able to tie up a line with constant calling. And unless the person can block the call, or set a specific ringer to it, they will end up answering the call - and doing that costs them Minuets. Even a 5 second answer to find out its a robo call, costs the cell phone user 1 full minuet. In effect, this law would allow the government to steal resources (property) from a defaulted student, without having a court order.
The Obama Administration knows, that due to the dismal economy, many students are defaulting simply because there are no jobs. So instead of helping these students, the administration is victimizing them.
And for students who have been in default for a long period, this is just another of and endless attacks on them by the US government.
Time for it to end. It is time for the government to address the problem and help the students instead of further persecuting them.
BAD IDEA.
In America, unlike other parts of the world, a person in the US pays for Cell Phone Minuets for both incoming and outgoing calls. The result of this is telemarketers and 3rd party collectors are not allowed to call these numbers.
Some want to switch the American system to one like that of many European systems, where the person only pays for outgoing calls. This would allow the telemarketers and others to call the cell phone numbers.
There is just one problem. Many people switched to cell phones BECAUSE they do not allow telemarketers to call. The so called "do not call list" is not working the way it should and many have found that having a cell phone is just as good as having one home phone.
In the case of student loans, many people in default have pre-paid phones. These phones require you to purchase minuets ahead of time. Many of these people use the phones for emergencies only, or when they are trying to find work.
IF the Obama administration gets its wish, the 3rd party parasites robo callers will be able to tie up a line with constant calling. And unless the person can block the call, or set a specific ringer to it, they will end up answering the call - and doing that costs them Minuets. Even a 5 second answer to find out its a robo call, costs the cell phone user 1 full minuet. In effect, this law would allow the government to steal resources (property) from a defaulted student, without having a court order.
The Obama Administration knows, that due to the dismal economy, many students are defaulting simply because there are no jobs. So instead of helping these students, the administration is victimizing them.
And for students who have been in default for a long period, this is just another of and endless attacks on them by the US government.
Time for it to end. It is time for the government to address the problem and help the students instead of further persecuting them.
A billion dollars wasted on 3rd party parasites - private collections agencies
http://government.brevardtimes.com/2011/10/us-taxpayers-give-billions-to-student.html
Tuesday, October 4, 2011
U.S. Taxpayers Give Billions To Student Loan Collection Contractors For No Reason
The U.S. Government paid over $2 billion to private debt collection contractors to collect just under $1 billion for Fiscal Year 2011.
U.S. taxpayers are needlessly losing billions of dollars each year in collections costs that the U.S. government could be collecting without the help of private debt collection contractors.
According to the most recently available data, total student loan debt in collections that was collected for FY 2011 as of July 2011 amounted to $10,410,993,183.
Of that amount:
1. 42% was rehabilitated into a non-defaulted loan;
2. 25% was consolidated into a Direct Federal Loan.
3. This leaves 33% that had to be collected by Administrative Wage Garnishment, Treasury Offset (taking a borrower's income tax refund), and regular collections.
4. The most amount collected was by Treasury Offsets 16% at $1,609,108, 522, followed by Regular Collections 9% at $973,874,789, then Administrative Wage Garnishments 8% at $849,332,994.
So without the expense of contracting private collection companies for regular collections, the U.S. Government would have received $2,458,441,516 into the U.S. Treasury.
But since those are defaulted loans, the amount collected first goes to the private contractors who hold the debt contracts even if they didn't have a hand in actually collecting the money.
According to the Department of Education's website:
"Pursuant to the Higher Education Act and the terms of most borrowers' promissory notes, you are liable for the costs of collecting your defaulted Federally-financed student loans.
The largest of these costs is usually the cost of contingent fees that may be incurred to collect the loan.
The Department gives you repeated warnings before it refers a debt to a collection contractor.
If those warnings do not persuade you to reach repayment terms on defaulted loans, the Department refers those loans to collection contractors.
The contractors earn a commission, or contingent fee, for any payments then made on those loans.
The Department charges each borrower the cost of the commission earned by the contractor, and applies payments from that borrower first to defray the contingent fee earned for that payment, and then to interest and principal owed on the debt.
As a result, the amount needed to satisfy a student loan debt collected by the Department's contractors will be up to 25 percent more than the principal and interest repaid by the borrower.
On each billing statement, the Department projects an estimate of the total amount needed to satisfy the debt on the date of the statement, including collection costs that would be incurred by payment in full of that amount." (Emphasis Added).
So while Obama was hailed for cutting out the middle man by offering direct student loans to college students, he certainly made it up with the graft given to private debt collection companies.
It is obvious that this is the next middle man that must be cut out of the student loan program.
Termination or restructuring of these contracts would immediately bring in an additional $1 billion into the U.S. treasury.
Statistical Source: http://www.fsacollections.ed.gov/contractors/ga/stats/090611.htm
U.S. Dept. of Ed. payment policy: http://www.fsacollections.ed.gov/contractors/ga/stats/090611.htm
Tuesday, October 4, 2011
U.S. Taxpayers Give Billions To Student Loan Collection Contractors For No Reason
The U.S. Government paid over $2 billion to private debt collection contractors to collect just under $1 billion for Fiscal Year 2011.
U.S. taxpayers are needlessly losing billions of dollars each year in collections costs that the U.S. government could be collecting without the help of private debt collection contractors.
According to the most recently available data, total student loan debt in collections that was collected for FY 2011 as of July 2011 amounted to $10,410,993,183.
Of that amount:
1. 42% was rehabilitated into a non-defaulted loan;
2. 25% was consolidated into a Direct Federal Loan.
3. This leaves 33% that had to be collected by Administrative Wage Garnishment, Treasury Offset (taking a borrower's income tax refund), and regular collections.
4. The most amount collected was by Treasury Offsets 16% at $1,609,108, 522, followed by Regular Collections 9% at $973,874,789, then Administrative Wage Garnishments 8% at $849,332,994.
So without the expense of contracting private collection companies for regular collections, the U.S. Government would have received $2,458,441,516 into the U.S. Treasury.
But since those are defaulted loans, the amount collected first goes to the private contractors who hold the debt contracts even if they didn't have a hand in actually collecting the money.
According to the Department of Education's website:
"Pursuant to the Higher Education Act and the terms of most borrowers' promissory notes, you are liable for the costs of collecting your defaulted Federally-financed student loans.
The largest of these costs is usually the cost of contingent fees that may be incurred to collect the loan.
The Department gives you repeated warnings before it refers a debt to a collection contractor.
If those warnings do not persuade you to reach repayment terms on defaulted loans, the Department refers those loans to collection contractors.
The contractors earn a commission, or contingent fee, for any payments then made on those loans.
The Department charges each borrower the cost of the commission earned by the contractor, and applies payments from that borrower first to defray the contingent fee earned for that payment, and then to interest and principal owed on the debt.
As a result, the amount needed to satisfy a student loan debt collected by the Department's contractors will be up to 25 percent more than the principal and interest repaid by the borrower.
On each billing statement, the Department projects an estimate of the total amount needed to satisfy the debt on the date of the statement, including collection costs that would be incurred by payment in full of that amount." (Emphasis Added).
So while Obama was hailed for cutting out the middle man by offering direct student loans to college students, he certainly made it up with the graft given to private debt collection companies.
It is obvious that this is the next middle man that must be cut out of the student loan program.
Termination or restructuring of these contracts would immediately bring in an additional $1 billion into the U.S. treasury.
Statistical Source: http://www.fsacollections.ed.gov/contractors/ga/stats/090611.htm
U.S. Dept. of Ed. payment policy: http://www.fsacollections.ed.gov/contractors/ga/stats/090611.htm
Tuesday, September 13, 2011
Students sue school over Recruitment departments job placement promises.
http://studentloansblog.nextstudent.com/2011/09/12/recruiting-for-student-loans-leads-to-40-million-settlement-with-cooking-school/
Thousands of students who took out tens of thousands of dollars in student loans to attended San Francisco’s California Culinary Academy, one of 18 cooking schools in the Le Cordon Bleu for-profit college chain, may be getting some of their money back.
Under a pending $40 million settlement in state court, Career Education Corp., Le Cordon Bleu’s parent company, has agreed to offer rebates of up to $20,000 to approximately 8,500 students who attended the academy between 2003 and 2008.
In a class-action lawsuit, former students of the cooking school accused it of misleading them about the value of a culinary education and their job prospects after graduation. The students alleged the for-profit school defrauded them with promises of high-paying jobs and encouraged them to take on crushing debt from student loans for expensive programs but provided them with no more chance of finding a high-paying culinary job than someone who didn’t go to culinary school at all.
= = =
Folks, this is EXACTLY what I have been saying all along about these schools.
This is a MAJOR recruiting tactic. Using Job placement promises, and future earning potential is a major tool to get students to sign up for these high priced trade schools.
It is high time SOMEONE hold them accountable. Too bad it had to be the students here, because I think it was the GOVERNMENTS job, to provide oversight on the schools to ensure this did not happen.
What the schools did, is commit FRAUD.
At least these kids got some relief. But notice the article does not say if they got complete relief.
If not, many may still find themselves in default and then they will suffer heavily as those who are in default, do.
Thousands of students who took out tens of thousands of dollars in student loans to attended San Francisco’s California Culinary Academy, one of 18 cooking schools in the Le Cordon Bleu for-profit college chain, may be getting some of their money back.
Under a pending $40 million settlement in state court, Career Education Corp., Le Cordon Bleu’s parent company, has agreed to offer rebates of up to $20,000 to approximately 8,500 students who attended the academy between 2003 and 2008.
In a class-action lawsuit, former students of the cooking school accused it of misleading them about the value of a culinary education and their job prospects after graduation. The students alleged the for-profit school defrauded them with promises of high-paying jobs and encouraged them to take on crushing debt from student loans for expensive programs but provided them with no more chance of finding a high-paying culinary job than someone who didn’t go to culinary school at all.
= = =
Folks, this is EXACTLY what I have been saying all along about these schools.
This is a MAJOR recruiting tactic. Using Job placement promises, and future earning potential is a major tool to get students to sign up for these high priced trade schools.
It is high time SOMEONE hold them accountable. Too bad it had to be the students here, because I think it was the GOVERNMENTS job, to provide oversight on the schools to ensure this did not happen.
What the schools did, is commit FRAUD.
At least these kids got some relief. But notice the article does not say if they got complete relief.
If not, many may still find themselves in default and then they will suffer heavily as those who are in default, do.
Record number of college students filing bankruptcy in 2011
Fox news reports that many students are now filing bankruptcy - even though they know they cannot get rid of student loans. Perhaps this is way for the government to get real honest numbers of how many people ARE in default and how many need help.
Kids (students) today are graduating from 2 and 4 year colleges in the worst economy since the great depression and government is not doing one damm thing to help them avoid default status.
see http://www.foxbusiness.com/personal-finance/2011/09/13/more-college-grads-defaulting-on-student-loans-filing-bankruptcy/#content
Kids (students) today are graduating from 2 and 4 year colleges in the worst economy since the great depression and government is not doing one damm thing to help them avoid default status.
see http://www.foxbusiness.com/personal-finance/2011/09/13/more-college-grads-defaulting-on-student-loans-filing-bankruptcy/#content
Sunday, September 4, 2011
US Deparment of Education blows it again
The US Department of education, is again wasting millions of taxpayer dollars, by giving federal aid to on line colleges who are not licensed in the states where they enroll students. Rather than pass and impose new regulatory oversight on the schools, the Education Department passed a regulation that restates what the previous regulation and the law already say.
In other words, they did NOTHING except waste taxpayer dollars.
Is it any wonder American Student loans are in trouble?
In other words, they did NOTHING except waste taxpayer dollars.
Is it any wonder American Student loans are in trouble?
Sunday, August 14, 2011
Student Loans, Another trade school sued for false job placement reports.
This one is closer to home. Clips from the article, used without permission.
http://www.mlive.com/news/grand-rapids/index.ssf/2011/08/cooley_law_school_target_of_fe.html
Cooley Law School target of federal lawsuit claiming it cooks its books when it comes to employment claims
GRAND RAPIDS – Either law school students are the victims of an elaborate scheme to bilk them out of $100,000 for tuition and leave them with dim job prospects or they are self-entitled elitists who think they are guaranteed a job because they have a juris doctorate.
http://www.mlive.com/news/grand-rapids/index.ssf/2011/08/cooley_law_school_target_of_fe.html
Cooley Law School target of federal lawsuit claiming it cooks its books when it comes to employment claims
GRAND RAPIDS – Either law school students are the victims of an elaborate scheme to bilk them out of $100,000 for tuition and leave them with dim job prospects or they are self-entitled elitists who think they are guaranteed a job because they have a juris doctorate.
Four graduates of Thomas M. Cooley Law School have brought a federal lawsuit against their alma mater, claiming the school misrepresented its post-graduation employment statistics to attract students.
New York law firm Kurzon Strauss filed the suit this week in U.S. District Court for the Western District of Michigan in Grand Rapids, claiming Cooley counts part-time jobs -- or employment other than working full-time as lawyer -- in its job statistics.
The suit accuses Cooley of using “Enron-style” accounting techniques that would “leave most for-profit companies facing the long barrel of a government investigation.”
Kurzon Strauss attorney and University of Michigan Law School graduate David Anziska said while Cooley claims that 75 to 80 percent of graduates get jobs within nine months of graduation, his firm believes that number is less than 30 percent.
“The dirty little secret is that this is a common practice among law schools,” said Anziska, who adds that a nearly identical suit has been filed against the New York Law School.
Anziska describes Cooley and NY Law School as law degree factories and the real problem is with the way that law schools report their employment and salary information as a matter of course.
Ed note: no, its not just law schools, who have this problem, MOST if not ALL the trade schools do. It is their biggest recruitment tool.
The federal suit asks for $250 million in damages including the reimbursement of students' tuition and other damages and it also demands that the named schools have their employment data checked by independent audit.
Cooley has about 1,000 graduates a year and about 4,000 students enrolled, with campuses in Lansing, Ann Arbor, Auburn Hills and Grand Rapids and plans to open a fifth in Tampa Bay, Florida.
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