Thursday, November 18, 2010

Exercising My Right Not To Forbear

I hate to restate the obvious, but I have been receiving like 15 calls a day from Sallie Mae and Access Group regarding the 2 loans my husband and I had to stop paying because the payment increased to an amount we could not afford to pay detailed here.  Now, this doesn't annoy us because we never answer our home phone anyway and with our cell phones and Google Voice, who needs a house phone anymore?  Heck, I would disconnect the home phone except that I need it in order for our doorbell to work and for the internet.  Anyway, sometimes I answer the phone just for the fun of it, with my new "I can't pay you" mentality and fun, but well-informed attitude to match.  The representative from the start is determined to get me to put this loan on forbearance, so we can get caught up or apply for the Income Based Repayment plan.  I tell, her, "no, I don't want to forbear the loan because you all will capitalize the interest and I'll end up owing more and I still won't be able to pay."  She says, "well, placing the loan in forbearance will allow you to not pay and hopefully things will turn around."  I ask her, "how much is that payment a month?" She says, its $800 something something" (soon as she said eight, I tuned her out).  I tell her, "that payment went from $200 something to $800 something, the only way something is going to turn around is if you turn around that payment back to $200 - can you do that?"  Surprisingly, she say no.  Really?  I mean really?  You can't make the payment $200 again?  I'm shocked and appalled. 

Anyway, she keeps pressing us to forbear the loan and I'm almost laughing hysterically because there is no way she is going to get me to forbear this loan.  Forbearing to not make payments and not making payments because you can't afford it is the same thing to me at this stage - so why delay the inevitable?  Plus, the interest is only being accrued at this point, not capitalized.  But hey, I'm enjoying the banter back and forth for some strange reason.  Then I ask her, "how much is passed due on this loan", she says, "two thousand something something" (again, I tune out after two thousand).  At this point, I really do bust out laughing.  She makes a final attempt to sell me on forbearance and I tell her no and to have a wonderful day!

I'm enjoying my new sense of empowerment and mental freedom.  Now, if I could only get that to manifest in the physical! 

Sunday, October 31, 2010

Sallie Mae = SCAM = ASSHOLE

The 2nd and final (hopefully) update to my original post Sallie Mae The Billion Dollar Scammer! No Online Principal Only Payment Option! and the 1st update Round 2: Sallie Mae's the Bitch.

Well, I'm happy to report (indifferent really) that Sallie Mae responded via snail mail 2 weeks after I sent my email.  I have to scan and upload the letter, but basically it stated that I couldn't make principal only payments online because per my loan docs accrued interest had to be paid first.  Then, Sallie Mae enclosed a copy of my loan docs for reference (THANKS!).  Now, my question is, if accrued interest gets paid first when I make my monthly payment anyway, why the hell can't I make a principal only payments online in between payment dates????  Its not like I'm paying the loan off so there will be another monthly payment (and another and another) so the interest can continue to accrue - just less of it since I paid down some of the principal.  Seriously, am I being unreasonable or is the level of corporate greed here just ridiculous and undeniable?  I have to say it again, THE BORROWER IS SLAVE TO THE LENDER!!!

My other issue is if you can make a principal only payment via the mail why doesn't Sallie Mae offer the a corresponding online option?  I already know the answer - because the interest will accrue while the payment is in the mail increasing the amount from your payment that would be applied to interest and decreasing the amount that would be applied to principal.  Geez - is this not the definition of SCAM or ASSHOLE?!!   

Saturday, October 2, 2010

Round 2: Sallie Mae's the Bitch

I'm happy to report that I received a phone call from a Brian from Sallie Mae's Office of Consumer Advocate within 24 hours of my sending a very frustrated but rational email to Sallie Mae.  Brian was very kind and said that he would look into my request for a online principal only payment option and get back to me.  Brian even gave me his phone number in case I had any additional concerns.  

Sadly, but not surprisingly, I have not heard back from Brian or anyone else from the Office of Consumer Advocate and it will be 2 weeks on Oct. 4th. Hmm, way to freaking advocate!!!  Thank God I wasn't suffering from anything too serious like, oh say a financial crisis!!!  Of course, you all know I'm not actually saddened or surprised by anything Sallie Mae does or doesn't do.  I'm not delusional (crazy maybe, delusional definitely not), I am well aware that my single email was not going to bring down the corporate demon in a single blow.  I am puzzled however, what exactly is the point of the Office of Consumer Advocate?  You truly have to be delusional to think its to advocate on behalf of the consumer.

Sunday, September 19, 2010

Sallie Mae The Billion Dollar Scammer! No Online Principal Only Payment Option!

Tonight I'm LIVID!!!  I really shouldn't be but I'm really disgusted that Sallie Mae doesn't have a principal only payment option on its website.  Before I blow up, let me give you some context.  Since I'm finally wrapping my head around my student loan debt, I want to be smart about everything I do with regard to them so I can pay them off and do things like, oh, let's see - afford to have another baby, help the economy out by buying more than 1 pair of brown and 1 pair of black shoes each winter and you know, generally, HAVE A LIFE.  So I was trying to figure out how to make principal only payments to pay down the loan quicker.  


It is RIDICULOUS that multi-billion dollar company requires "customers" (i.e., its bitches) to MAIL IN a "principal only" payment with a letter.  DOES ANYONE ELSE FIND THAT FUCKING RIDICULOUS!!  Jesus, help me - they got me cussing now!!  Ugh.  Let me breathe.

This is just continued confirmation that Sallie Mae is trying to keep customers in debt.  Seriously, in this day and technological age who requires customer to send in payments via snail mail!  Hell, even my mortgage company has an option to make a principal only payment online.  Then, I was reading other blogs where Sallie Mae CONSISTENTLY misapplies the principal only payments.  Also, there have been reports of Sallie Mae taking 3-4 weeks to process such a payment (essentially eradicating any ground you gained by making a principal only payment due to all the interest that accrued)!  WTF!!!  Sallie Mae has over 10 millions customers so how smart is it for them to actually instruct that many people to mail in a damn principal only payment? 

So let me get this straight, first, you require customers/bitches to use the most antiquated form of communication known to man then you don't even apply the payment right?????  Oh, this is the definition of SCAM!!!! 

To make things worse, Sallie Mae states that additional payments made online will go to accrued interest first.  HELLO people - your loan accrues interest every damn day!!!  So your principal only payment of $50 (for example) would not all go to principal if you pay online.  Sallie Mae takes a portion of it to pay the accrued interest first, but if the entire principal only payment went to, oh, say, principal then the accrued interest would be less!!


Now, despite my present emotional state on this issue I am well aware that all the interest we bitches pay is how Sallie Mae makes its money.  So its no coincidence that Sallie Mae doesn't have a principal only payment option on their website - because they DON'T WANT YOU TO PAY THE LOAN OFF EARLY.  Sallie Mae isn't incompetent.  You don't become a multi-billion dollar company on incompetence.  Sallie Mae DELIBERATELY does not have a principal only payment option on it website and probably incorrectly processes payments and/or takes 3-4 weeks to process a principal only payment ON PURPOSE.  They want every damn cent out of you that they can get.  They don't want to help you manage your debt because managing debt ultimately means paying it off.  Anyone or company in this case, that expects you to make payments until you are well into your mid-sixties really has NO INTENTION ON HELPING YOU PAY YOUR LOAN OFF EARLY.  This is abundantly clear by Sallie Mae capitalizing interest on loans that are deferred or in forbearance, how they apply your payments (accrued interest and late fees first), advancing payment dates, and finally MAKING YOU PAY PRINCIPAL ONLY PAYMENTS VIA THE MAIL!!

I decided to conduct my own taste test.  Tomorrow my bank will mail a principal only payment in the amount of $75.00 to Sallie Mae.  The memo section of the check will clearly state "FOR PRINCIPAL ONLY" and my account number.  I'll see 1) how long it takes them to apply the payment and 2) if the payment is applied correctly.  I'll post a follow up entry on the results.

They provide all kinds of options on the timing of your payment, but not one option to make a principal only payment.  Talk about the simplest tool to provide to consumers.  Where is Congress and the American Bar Association (ABA) when you need them!!!!  Why is NO ONE talking about these simple, efficient, practical tools that would ACTUALLY WORK?  Why do I have to get to the point of bankruptcy for help???  Why don't you help me PAY the loans off - whether faster or at all by placing limits on accrued or capitalized interest?  HELP ME PLEASE!!!!!!

Clearly my cries are falling on deaf ears.  Well, since Sallie Mae wants us to mail shit in to them, let's do just that.  Imagine if millions of Sallie Mae bitches actually wrote to the CEO Albert L. Lord and any other member of senior management at Sallie Mae and demanded that they include a principal only payment option on the website (that actually applied your entire payment to the loan's principal balance).  Conveniently, Sallie Mae has an Office of Customer Advocate (how effective they are at actually advocating for the customer remains to be seen, because with the plethora of complaints online I fail to see their results) that you can email as well.  I was so livid I sent the following email to the Office of Customer Advocate tonight.  I hope you will do the same.  
I want to know why Sallie Mae doesn't have a "principal only" payment option to allow customers to make principal only payments electronically.  I find it truly antiquated that a multi-billion dollar company requires consumers to MAIL IN a principal only payment along with a letter.  THIS PRACTICE IS TRULY RIDICULOUS.  Additionally, there are MANY reports of customers doing as Sallie Mae instructed and their payments are REPEATEDLY misapplied.

It is clear that Sallie Mae is abusing its consumers and is deliberately trying to keep people in debt.  I request that Sallie Mae include a Principal Only electronic payment option on its website.   I am aware that this is not the first nor the last request consumers have made regarding this functionality.  The question is WHEN will Sallie Mae listen to its consumers and provide this functionality.  Thank you.
I realize its not the most legally sound letter, but hey, I was caught up in the heat of the moment.  I'm not going to stop here either.  I am going to write a letter to each member of Sallie Mae's management team and I hope you do the same as well.  I'm working a draft letter now and will post it for you all to use if you want.  I am also soliciting content for the letter should you care to contribute.  I'm going to channel this anger towards change (either that or a drinking habit).

Wednesday, September 15, 2010

Supernatural Debt Cancellation & Dave Ramsey

I'm back from a long and much needed staycation.  My parents came up for Labor Day and we discussed "our" student loan situation.  I'm just so glad to put that part behind me for now.  We'll see how it all plays out down the road.  Speaking of a road, I started thinking about everything I've tried just to get to this point - which is a balance of sanity and casual disregard.  I've tried everything from praying my debt away, working multiple jobs (while pregnant) and of course the most successful route I've tried, the Dave Ramsey plan.  For those of you out there looking for alternatives here's a breakdown of my various routes.

Supernatural Debt Relief
Honestly, I still practice this, because seriously, what do I have to loose except $190K?  With all the debt I have I am naturally drawn to prosperity teachers - because after all I want to be prosperous - not poor.  Oh, and as a side note, prosperity refers to all areas of my life, not just finances.  So when I found out about Supernatural debt release, I jumped on board.  Heck, maybe man is no match for Sallie Mae, but surely God can!! So here's a link to the principles for supernatural debt cancellation.  I also found practical steps for debt release as well; hmmm, you mean prayer & mediation alone won't work?  Damn.  Maybe that's why all that time practicing The Secret didn't produce much results either.  I can't believe I actually have to PAY this bill for it to be PAID!!!  Ugh.  Ok, I'm being sarcastic, I'm clearly aware that I can't wish away my debt, how in ever, that's not going to stop me from trying The Power when it comes out.  (Hey, don't judge me, I told you I've tried (and will continue to try) everything!)  Anyway, I keep a paper with the supernatural debt cancellation scriptures on my desk at work and pray to God several times (well, non-stop really) during the day to rid me of this debt.  Well, actually I pray that the Sallie Mae servers, backup servers and backup to the backup servers are all destroyed and along with them any record of my debt.  

Debt Snowball
Now, anyone who knows me, knows that I swear by Dave Ramsey.  I have learned so much from this man and he has put my entire financial picture in perspective.  He's kept me from bankruptcy, empowered me on how to handle creditors and given me the best road map to get myself out of debt.  After I discovered him, I paid off $18K in debt in one year.  I still have a LONG road to travel, but at least I have some sense of sanity because of him.  I listen to his radio show online everyday to get emotional support from other callers in similar or worse situations than mine. I disregard his political rants (which applies to every administration regardless of political affiliation) and stick to his great financial advice.  I'm sure you know the basics of the debt snowball, but for those of you who don't you can find it here.

I know some readers have the perspective that those of us saddled with massive amounts of student loan debt just want to get over by not paying our back our loans.  As I've shared many times before, this is the furthest thing from the truth.  I actually had 4 jobs while I was pregnant to pay down my debt and thanks to Dave Ramsey I was quite successful at it.  But since I've had my child, I don't have the time or energy to work all those jobs and care for my child. 

Hmm, now that I look back at what I wrote, I wonder really what other routes are there?  If you know of any others, please share.  In the meantime, I'll be over here commanding the universe to submit to my will.

Thursday, September 2, 2010

Student Loan Debt: ABA Concern, Action & Relevancy

While researching student loan repayment and forgiveness options, I was surprised to see the abundance of resources that the American Bar Association had on this topic. Talk about irrelevance, here I am along with thousands of other lawyers in the midst of the greatest issue of our legal careers and I didn’t even bother to see what the Guardian of the Legal Profession – the ABA had to say. So I decided to venture further into what the ABA’s position is on the issue of overwhelming student loan debt and what resources they are providing to the profession.

I was surprised to see that former ABA President, Carolyn Lamm, wrote a letter to Congress  about the staggering student loan debt and pushing Congressional Bills S. 3219 - Fairness for Struggling Students Act of 2010 and H.R. 5043 Private Student Loan Bankruptcy Fairness Act of 2010. What peaked my interest the most however, was her statement, “relaxing the criteria and provisions of income-based repayment (IBR) and other federal loan programs so more may qualify are all options that would assist students and graduates” found in the second to last paragraph. All that bankruptcy stuff is cool, but I’m really not trying to declare bankruptcy. But I am open to any and all levels of practical assistance to ease my student loan debt burden. If I could qualify for IBR without having to have 6 kids that would be a plus for all involved – me, my husband, child welfare, you and every other taxpayer.

It was sobering to read her statement: “In 2009, the United States' largest law firms suffered the deepest cuts in their attorney numbers in more than 30 years. According to the Bureau of Labor Statistics, in the twelve months ending in November 2009, the legal industry as a whole lost approximately 42,000 jobs. The current job market makes it difficult for many borrowers to find gainful employment to enable them to pay back their student loans; the number of associates in large firms shrank by almost nine percent last year, and forty-two percent of incoming first-year associates had deferred start dates.” It puts some realistic and depressing numerical context around a profession that has historically been touted for its economic weathering power and high salary prowess. All of that has vanished. POOF! Gone. Lawyers working at Starbucks, moving back home with mom & dad and being unable to pay their student loan bills is becoming the norm not just for new lawyers, but for mid-level and seasoned lawyers as well.

The ABA’s Law Student Division mentioned Lamm’s letter as well in one of their monthly newsletters. Nothing earth-shattering which made me wonder if law students are paying close attention to this issue? Or are they still bright-eyed and bushy-tailed about their ability to repay their student loans and their job prospects. I also wonder if the Law Student Division or the Young Lawyer’s Division is doing anything proactive to build awareness in this area? Seems like student loan repayment is a topic that goes hand-in-hand with employment; both of which are super relevant to both law students and young lawyers. A lot of people talk about the ABA not being relevant, but then I found out that Carolyn Lamm created the Commission on the Impact of the Economic Crisis on the Profession and Legal Needs. Ugh. “Commission” that means a “talk about it tank” which is just one rung below a “think tank” on the Do Nothing Hierarchy.  The members of the Commission can be found in this press release, but I wonder if any of them are law students, young lawyers, recently unemployed lawyers or employed lawyers with over $150K in student loan debt like myself. It seemed sooo promising. Hmmm, I wonder how effective and relevant this Commission will be going forward especially since Stephen Zack has taken over the presidency; perhaps it will be downgraded to a “think tank”.

What I found most disappointing was the ABA Journal’s podcast How Law Schools Can Help Next Gen Lawyers Take Gamble Out of Hefty Tuition.  I think the title just misled me into believing it had to do with reducing law school tuition…hmmm, don’t know why I thought that. It’s really a couple of academics’ views of how law school tuition got to be the way it is and the incorrect and misleading employment statistics that law schools post. Useless to me and my plight nonetheless. The ABA Journal did have some other articles that detailed the ABA’s “concern” in this area.
  1. President Lamm Hopes Full ABA Backing Will Help Win Loan Breaks for Law Grads
  2. ABA Lobbies for Student Loan Relief for Unemployed Attorneys
  3. Leadership When It’s Needed Most
Damn, does that add up to only 3 articles on this topic???  That is some level of concern. (Disclaimer: this is all I could find, hopefully there is more on the ABA website and if you find it let me know) I read the first article and I had to wonder whether the ABA really has a grasp on the bigger and more subtle issue like CAPITALIZED INTEREST!!!A true alternative is passing legislation that caps capitalized interest on deferred or forborne loans at a percentage of the of the loan like 5%.  Another alternative is to put a cap on accrued interest.

I’ve exasperated my research in this area and conclude that just like my student loan payments, there are no viable options for me – a working, underemployed attorney. That is, other than to find another job that pays more and well, have you seen the job market lately? I also concluded that the ABA has to go deeper and not just talk about surface of an issue if it wants to be relevant to the profession and its constituents – seriously, go hard or go home isn’t that what I pay my membership dues for? (Well, used to pay b/c now that payment goes to student loans).

Monday, August 30, 2010

30 something and in Default

I rode the emotional roller coaster with all of my student loan lenders today. Since I started taking stock of all my loans including their balances and monthly payment amounts, I said to myself “why stop there?” So I called Sallie Mae and found out what type of loans I had – private or federal.  I had a slight glimmer of hope in my tone as I had read about extended repayment terms being able to lower payments.  So I asked the rep if any of the loans qualified for extended repayment terms. The rotten fruits of my labor are in the chart below.

Ugh. Now, I’m even more depressed. Two of the loans don’t have a cosigner and are already at the max repayment term so I have no choice but to default on those loans. Not because I don’t want to pay, but because I can’t afford to pay. Unfortunately, those 2 loans are also federal loans so they’ll probably end up garnishing my wages and my professional license could be in jeopardy (seems ridiculous b/c I need my license to make money and if I don't have it I can't pay you anyway). But right now, my focus has to turn to the loans that my parents are cosigners on. I absolutely can’t default on those and those are the loans with the highest payment amounts. The only loan I’m not worried about is Access Group as that balance is reasonable and I can afford the $60 a month payment even if I end up working at Target. I'll see what I can do about paying that balance off in the next 9 months (270 days) – which coincidentally is how long it will take for the two federal loans to be considered “in default.”

I stumbled upon some decent resources so I could know what to expect during the default process: The US Department of Education Debt Collection Service publishes a guide called Guide to Defaulted Student Loans and Defaulting on Student Loans on also has information on Student Loan Debt Settlements. I was quite surprised to find Student Loan Borrower Assistance as it provided the most useful information. Definitely bookmarked that site. I also have to say I was super excited when I stumbled upon was created by the nonprofit, nonpartisan Project on Student Debt to help student loan borrowers learn about two new federal loan programs: Income-Based Repayment (IBR) and Public Service Loan Forgiveness (PSLF). Like the tension build up before the slaughter in a horror-film, I ecstatically filled out IBRinfo's web-based calculator. I put in all the information, which I conveniently had at my finger-tips thanks to my nifty spreadsheet (softly play music from Jaws). I eagerly pressed calculate and awaited my fate (volume of Jaws music increases). Then suddenly, the fatal bite from the unyielding student loan beast – “Based on the information you have provided, you would probably not qualify for IBR.” Damn! Damn! Damn James! On a whim, I kept increasing the number of dependents to see how many kids I would have to have in order to qualify. 3? No. 4? No. 5? No. 6 – Ding! Ding! Ding! Correct!! I would have to have 6 kids in order to qualify for a payment of $640!!! Does this reinforce a welfare mentality or what? Because if I had 6 kids I certainly would not be able to have a job other than my own reality show about having 6 kids and not being able to afford anything (I must note that reality shows pay WAAAAAYYYY more than any career in the legal profession so this is now a viable option for me; I wonder if I can get my husband drunk enough).

I would almost be better off with 6 kids and taking a lesser paying job (but seriously, is $86K a lot these days? That’s before taxes and deductions – after all that is taken out I’m bringing home about $57K THEN all the bills start). Just another reason why I can’t afford to be middle class.  I am living the statement that Today's generation will most likely NOT be  better off than their parents.  Forget the 20 somethings - what about the 30 somethings!!