Horrible student loan lenders

[Ironclad Alibi]

Mrs. IA once got a call from one of the student loan companies wanting to know when she was going to send them some money. She informed them that she had paid off her student loans some 30 years earlier, and that they obviously had incorrect information in their system. She never heard from them again.

[fireheart]

This is why I really, deeply, deeply, deeply wish with all my heart that student loans here would work like student loans in the UK. If you make over £15000 there, the loans are automatically garnished from your paycheck. If you make less than that...you pay nothing.

Here it's about $38,000 p.a. and you can make voluntary repayments as well.

My plan once I end up becoming a full-time teacher is in addition to the small amount coming out of my paycheck, pay off around $500 or so per month. If you do it as a lump sum, an extra 10% bonus is added, so I'd be paying off $550 per month instead of just $500.

[Rhion]

Some people in this thread have it right. If you have a loan with bad terms, seriously look into debt consolidation. You should be able to get a loan with better terms, which will really pay off in the long run. It's probably a good idea to do this before their screwing around hits your credit rating, so you get better rates and terms on the consolidation loan.

[jerrybear]

My ex-son-in-law

Can do them one better--- We were outright paying for our daughter's college-planned for it for twenty years-no big deal (Except the college had NO WAY to just accept a payment-IE: I have the check book right here, tell me how much.)
Two weeks after they were married he signs her up with the loan clowns and starts to borrow-and borrow- and borrow........ eight years after the divorce she's still paying them back----- If I'd known as soon as he borrowed the first pocket full, I'd have used a baseball bat on him in about fifty places-testicles first!

[bankworking]

This is why we're doing our best to save up for our 4 year old's college now.

When I graduated, student loan consolidation places were practically knocking down my door wanting to get my loans over to them. With that much competition, I got myself into a locked in rate of 2.89% (have to let them take payments out of my account automatically, which is the ONLY place I allow that from, and I make damn sure the money is there, because there is NO way I'm getting that rate again if I forfeit it with a late payment) for the life of the consolidated loan. Got my payment on a 25 year term, which sucks for the length, but at that rate, I'm better off paying down my mortgage first. Now a days, a kid is lucky to have 6% on their loans.

I get kids coming in asking if my bank can take over their student loans, and there just isn't anything I can do for them. We don't do student loan consolidations, a personal loan isn't meant for those sort of balances (10.5% APR at the best, so believe me, they don't want it even if we did personal loans of the size that they'd need), and generally they don't own a house with the equity to pay such off. The good consolidation programs like the ones that competed for my business just don't exist anymore.

It's a frustrating situation. My bank does have a free seminar for college students which goes over the costs of student loans, just to help get the education out there, but I'm not certain how much it helps. Seems like the ones who come in to us are always the ones who are already stuck.

[EricKei]

I think part of the issue here is whether yer dealing with "Mallie Sae" a collection agency. I have loans from two different schools; I have not had a credit card in over ten years (all were completely paid off), and yet my credit is firmly in the "don't hire this schlub" zone due strictly to those two sets of loans. MS (for school #1) doesn't call me, they're content to let the interest accumulate. The collection agency (for school #2) loves to call and call and call...Thing is, I've been unemployed for some time now. I explained this to them (often), offered to send them proof of same (odd, they always ignore me when I say that ~_~), that the bulk of my money goes to rent and utilities, I'm on food stamps, etc. I offer a token payment of like $50 a month just so thay cannot say I am not attempting to pay (Ireally do wanna get it paid, I just can't afford it and I have NO ability to get loans from family or other lenders). Their response to that is <a> Tell me not to bother (they refuse to even take down CC info when I ask...and I have found that, in the past, they invariably document that as "refusal to pay/refusal to cooperate" on my record), say that it won't even cover the interest to it's not even worth my (read: their) time, and act insulted that I even suggested it, or (b) to ask me to send them 2 grand plus $600 a month for 6 months, at which time they'll drop the interest from 20something% to two% (note that they did not contact me about the loan/payments until some time after they had taken it over). I'd do that if I could afford it and I have told them as much, often -- they just don't read one another's notes, as I've called them out on this crap before. The question they can never seem to answer is, If i had that kind of money laying around, don't they think I would have been making payments up until now? >_<

Regarding MS and "MS Financial" -- the former is "government loans", the latter is "private loans", offered by a wholly-owned subsidiary of MS...

Also, speaking of wholly-owned subsidiaries, (at least) one of the biggest school loan collection agencies in the country is owned by MS...So, in effect, they're issuing the loans, and then selling the "bad" loans to themselves for egregious interest.

Consolidation: Not that it matters much while even a $50/mo payment is a stretch, but no consolidation company I've ever contacted will even touch school loans with a 50-foot pole. Can anyone suggest reputable places that do?

Bankruptcy (US only): What was said above is true, I've researched it as well -- School loans/collections of school loans are among the few things that a Bankrupt person's creditors can simply ignore as if the Bankruptcy filing had never taken place. If they choose to work with you at that time, awesome ^_^ They just don't HAVE to ease up on you if they don't feel like it.

[SuperDan]

Consolidation: Not that it matters much while even a $50/mo payment is a stretch, but no consolidation company I've ever contacted will even touch school loans with a 50-foot pole. Can anyone suggest reputable places that do?

The federal Direct Loan program, operated by the US Department of Education, will consolidate any federally subsidized student loans, provided through the Direct Loans service or not. I don't think they are able to consolidate privately negotiated student loans, I know they didn't allow me to roll mine in when I consolidated all of my federal student loans many years ago.

[42_42_42]

If you're going to borrow money to pay for college, FIRST make sure you fill out a FAFSA and apply for the Stafford and Perkins Loans (these are the government subsidized ones). SECOND, apply for any and all scholarships and grants that you are eligible to apply for even if you don't think you'll get it. Only borrow unsubsidized money as a last resort. Often, you're better off going part time while working and taking 8 or more years to do a bachelor's degree. If you can, live at home with your parents while you go to school. Get your first two years completed at a junior/community college and then transfer to a university for your jr and sr years and you will save a shit-ton of money. Also, state schools are uber cheap compared to the private schools (I'm working on my 2nd bachelor's right now and the total cost will be around $45K vs the $150K it cost me for my 1st bachelor's, that's the diff btwn a state school and a private uni), and I graduated from the uni in 2000, it'd be closer to $200K there now for 4 yrs).

Clark Howard offers a lot of great FREE financial advice. He's on the radio here in Atlanta, but if he's not on in your area, here's his website: http://www.clarkhoward.com/

For those of you saving up for your kid(s) to go to college, check out the 529 plans.

[EricKei]

My subsidized loan was for the Bachelor's degree. I got a grand total of...I think $600-900 in grants over 6 years; purely on a financial basis, I should have gotten 70% paid in grants (low-cost state college). Meanwhile, I knew people who had enough money that they didn't need to work, or get an education if they didn't want to. who DID go to school entirely for free when considering both grants and scholarships. When I asked why I didn't get grants and offered proof of my financial situation (bordering on food stamp levels), the reason they gave me was suspect, and one I can only safely discuss on Fratching.

When I went for a secondary degree afterwards, they told me that the standard, subsidized loans had somehow maxed out (which sounded odd to me -- there are schools here where what I borrowed for ALL of my bachelor's degree would not even cover a YEAR at those schools), and that I had no choice to use MS Financial...They told me it was unsubsidized, but NOT that it was a private, non-government loan (from a company owned by MS)...It is the latter that has the collection agency hounding me. I'd love to get them consolidated for the break on interest alone, and to make it all one point of contact.

Fun bonus thing -- I found out, years after getting both degrees, that my brother and I could have gone to a different (state) school totally for free because Dad knew someone up there as a really old family friend...But they thought we didn't wanna go for some reason, never actually having ASKED us >_< Apparently, Dad took us up for a campus tour "just to see the campus" when we were like twelve...And we complained about the prevalence of obviously drunk students...Somehow that was interpreted as "we wouldn't wanna go there 9 years later once our opinions on the subject would most liekly have changed". Had we been asked when we were close to college age, somehow I think we would have said "Hell yes!" -- ARGH

[protege]

I guess I was lucky. I had them for my student loans. I paid them off early ( 6 years ago), and never had a problem with them.

I forget who had my student loans. Doesn't really matter now, since I paid them off not long after I started working. That was only possible, since I was still living with my parents, the car I owned then was paid for, and I didn't really have any bills.

[vang]

I had both subsidized and unsubsidized, and Mallie Sae was the one that screwed me, directly or not. I was pinged on my credit report for late payment legitimately -- Dad had been paying my loans until I had a job. But he realized he was too short to keep doing it and neglected to tell me so that I could get a forbearance until I was several months late. He still grabbed the letters from the two loan places as soon as they came in, so I never knew I was behind until they started appearing on our answering machine with dire warnings about how screwed I was. Not my fault, but yeah, my responsibility, fair enough. I got a forbearance, then fairly soon after finally found a job.

The hard part came next, after I'd been paying them a few months, saved up those months, and went to buy a car. Oops, no, my credit report still showed I was *currently* three months behind on paying them (rather than having had hit that point in the past). Listing the amount that I was behind in paying as $0. I could compare to the other loan and see it correctly phrased as having been delinquent in the past, so it wasn't just confusing text. They were actually still claiming I was months behind. For $0.

I called the credit agency, who said that all they could do was rerun their reports, even if the text of the report was patently absurd. Had them requery their sources.. nope, same thing on the report. Called Mallie, who shrugged and said everything looked fine for them, and it wasn't their problem. Escalated to a supervisor, same thing, not their problem.

I went back and forth between them for a while, both credit agency and loan agency pointing fingers at the other, making it obvious that the only way I could get someone to do anything would be to hire a lawyer. I grimaced and took door number two, and threw all my spare money into paying them down as fast as possible. It took a while, somewhere around two years I think (luckily Mallie was fairly low, most of my loans were Stafford IIRC and Mallie was just used for closing the gap), but having everything paid off did in fact fix that glitch. Yay. But in the meantime my car had to be in my mother's name (though I was paying for it) and I couldn't open a bank account in the place I'd moved to for my job, which made cashing my paychecks and paying for things annoying and cost more.

Not necessarily Mallie Sae's fault alone, but I'd later confirmed it was happening on more than one agency's reports. So it was apparently some glitch in Mallie's system that they just didn't care to bother with.

[EricKei]

since I was still living with my parents, the car I owned then was paid for, and I didn't really have any bills.

Similar sitch, yet opposite. I lived with Dad because he needed someone there to take care of him as he could barely walk. Most of my money after paying bills went to the hospital/pharmacy/etc.

[HeroOfNotBashingSkulls]

I'm not trying to brag or make anyone angry or feel bad, but things like this is why I'm going to take an apprenticeship. I'd hate to be in debt to a-holes like this.

Honestly, I would have reported this company. They refused all forms of attempts to sort out a reliable payment package, it sounds as if they are possibly ignoring a few laws including something along the lines of harassment (Maybe, I'm not completely familiar with law.), blatantly lying to people, etc. I don't know if that's enough, or if you can, but I'd damn well try. :/ You never know..

[morgana]

I guess I was lucky. I had them for my student loans. I never had a problem with them.

Ditto. Got 'em, graduated, paid 'em off, no problems at all.

[Aria]

Wow... all of this makes me glad I'm in Canada. I have a federal loan that's locked in at around 3 percent, I think. I'm hoping to have it paid off by the end of next year. I used my line of credit too, when I was in school, but I paid that off a while back. Our banks are incredibly stodgy so they never give you more than you can handle.