Thursday, June 23, 2011

Loan Deferral Drama

While I try to keep this blog law school focused, or at least legal-field focused, I have been experiencing such a headache with my undergraduate student loans for the past few weeks that I could not resist writing about it here.

Because I graduated in May and do not have a job yet, I called the company that handles my undergraduate student loans and requested an unemployment deferral.  Charmingly, the loans go into repayment on your last day of classes, as if that's the day that you will magically have the money to start making payments again.  They sent me some forms to fill out, which were simple enough.  I faxed them back and it all seemed painless as one could expect.

A few days later, the phone calls began.  First, they claimed not to receive my fax.  Then, they claimed they only got the cover sheet.  Then magically, another page appeared.  But still, more than half of my loans were not in deferral-mode.  Calmly, I went back to the UPS store and had them faxed again.  These are people who essentially send faxes all day, for a living.  I think they know how to do it.  I informed the company that I faxed the sheets once again, and that should have been that.

And a few days later, the phone calls began again.  Apparently no fax was received.  This is not rocket science; I used the number on the site, which was the same as the number the service rep gave me.  I calmly explained that I have no job, and every time I have to fax something to them it costs money.  But, I faxed it again.

Now, the harassing letters have started arriving, threatening to report me to collections for the half of my loans  for which the form was apparently faxed into the ether.  Collections, after how many days?  Really?  Just for the cherry on top of the whole situation, I received an email telling me that they received mail back from my address marked as undeliverable.  Which is pretty astonishing as I have received mail from them before, at this address.  Beautiful.

I'm sending it again today with a tracking number, snail mail.  I know that there is nothing remarkable about this story, but here's the thing:  My student loans and the knowledge that they are looming over my head is a constant source of anxiety and stress for me.  To be bombarded with calls, letters and emails as if I am some sort of criminal deadbeat is very upsetting, especially when I tried to do everything right from the outset and get the loans deferred.  It is also a painful, constant reminder that I cannot put this stuff off forever.  (A reminder which, believe me, I don't need.)  I find it hard to believe that the company has the documents and is lying about it - if I had to guess someone profoundly inept has been receiving them and misplacing them.  But these are people who have been hired to handle things that are absolutely critical to people's lives.  A little organization is not too much to ask for.  But why should I be surprised?  This is all par for the course.  Prospective students, take note:  you could very well be in for this type of humiliation down the road.

20 comments:

  1. This sounds exactly like all the stories about underwater homeowners trying to get mortgage modifications with their banks. Documents being lost multiple times, being told contridictory information, being led to thing everything was resolved only to receive collection or eviction notices ...

    The sooner one realizes that most financial institutions are run merely in order to sit back and collect money, rather than actually having to "service" accounts and/or work for a living, then all the incompetence and hypocrisy on their end becomes crystal clear. Anything else gives these guys too much credit. Most people would be fired for handling things that incompetently, but apparenty that is "business as usual" for these institutions.

    They might as well send you a letter saying "STFU, biyatch, and gimmie my money!" for all the good they have been doing. It would at least be more honest.

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  2. So as an attorney, you have "anxiety...and humiliation" over these administrative hangups? How then, would you ever handle the numerous and nagging (and quite important) needs of your prospective clients? Just playing devil's advocate here.

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  3. @1:13: A few things regarding that -
    I have handled administrative hangups both personally and professionally, in addition to having appeared in court in the course of my law school internships. As a paralegal, I had to deal directly with clients -- large companies with pressing and sometimes excessive demands. I can handle pressure. This is a little different. Perhaps if I had a job and this was just a payment glitch I would not be so stressed about it, but I have no income. These loans MUST get deferred because I have no other alternative. I cannot pay them right now. The fact that these people are either incompetent or dishonest is costing me money that I do not have, and jeopardizing my credit (which is probably on borrowed time anyway, if I don't get a job in the next few months.)

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  4. Your experience mirrors mine. It's very easy to borrow the money from private lenders, but getting a deferral or forbearance is a nightmare. Sallie Mae wanted to charge me a fee that was almost as large as the fucking payment due in order for them to even process my deferral paperwork. I mean really? Are they not content with the fact that I'm on the hook for the rest of my life for this shit? Are they not content with the fact that I can't blow these shitty loans off in bankruptcy? Cunts!

    I also get proper hardcore collections calls from Sallie Mae THE DAY AFTER THE LOAN PAYMENT WAS DUE IF IT WAS NOT PAID. Not reminder calls. Not a polite letter or email asking if I've forgotten it by accident or if there is anything they can do to help make payments easier. I get a cunt literally calling me the following morning telling me that the loan is in default (yeah, not even just late - DEFAULT), and threatening to report it to a credit agency (like I care at this point) or to collect from my co-signers (parents) if I don't pay. Then they ask me not only for the late amount, plus a fee, they also sneakily add next months payment to the amount due and ask if I can pay it all.

    I have an extraordinary hatred for private student loan lenders and their tactics. They can go fuck themselves and they only get away with this shit because they know that there's nothing they can do that might make me decide that bankruptcy is the best option, because even it it was the best option the loans would still be waiting for me afterwards.

    Fuck Sallie Mae. Fuck the politicians for letting these criminals rape hundreds of thousands of students every fucking day. And fuck law schools for lying about job prospects and hiding the consequences of debt. The entire legal education system, complete with student lenders, is a piece of shit.

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  5. You have to play hardball with these people. If you give them any tiny hole of an excuse to dodge their obligations then they will drive a truck through it. I'm not trying to excuse their behavior; far from it. It's just the sad reality of dealing with large corporations today.

    Don't bother with faxes. There's no point. You should have done the snail mail with tracking number from the outset. Express mail is good; FedEx is better. (In my experience mailing documents, and I do mail a lot of them, FedEx is the least likely to get lost.) Ideally you want a tracking number that shows they received your mail at least a business day before the deadline. I know it's expensive, but as you're finding out the hard way, not being proactive leads to greater expense and frustration in the long run.

    Keep photocopies of everything that you mail out. If you can, take a picture of the mailer envelope together with its contents. Basically, keep some evidence of what you mailed, so that when they later claim that "page 4 is missing" you can prove to them that it wasn't. And I'm not talking about legal standards of admissibility, so forget your legal training -- if you have your documents in order, it won't even come to a court case.

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  6. This is just naivety on your part. If you are mailing anything that is remotely important such as legal documents, account closures, payments, etc., always, always send it via trackable mail.

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  8. Your drama is very common when dealing with student loan companies. My advice: don't send them something and then assume all is well. Follow up with a phone call 24 hours later.
    The loan companies are designed to be incompetent and to lose your paperwork. It is in their best interest for you to default. Again, always follow up, always get a name and ID number. Write it down. I have an excel spreadsheet of all my conversations with my student loan company. I always begin the call with, "May I have your ID number in case we get disconnected?" It works. They are less apt to lie or lose stuff.

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  9. @Big Meech -- you are right, it is partially naivete on my part. The lesson is definitely learned, as I will not be faxing them anything ever again. That said, I object to the word "just", as it also involves a healthy dose of incompetence and negligence if not outright malice on the part of the loan company.

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  10. Which Law SKool course taught you that Loan Sharks were cuddly creatures?

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  12. Rose,

    You should contact Cryn Johannsen of All Education Matters. Her email is ccrynjohannsen@gmail.com. She has documented the fact that these lender cockroaches employ such filthy tactics.

    My brother in law just graduated from dental school. He has over $300K in total student loan debt. He was told that he had a six month grace period. Now the pigs at Sallie Mae have informed him that there is no wait period. His wife, who has a paltry salary as a part-time "professor" at the Univer$ity of Phoenix, is now paying his loans - until he can afford to make the payments. They already have her bank account info.

    Isn't "higher education" fantastic?!?!

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  13. I read this to my mother - from the part where you talked about no job up through having to send the forms with tracking.

    (I am not involved with law or law school at all - just find these blogs interesting).

    She told me it sounds like the person needs to hire a lawyer and go after the company because there were incompetent people there.

    Hahaha.

    Then she told me about the time she had the house recarpeted and collections came after us - for 16 cents. They wasted that much on postage on the first notice they sent us... (It was resolved - computer error).

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  14. Reject indentured servitude. Stop dealing with your creditors, stop paying back your loans. Help grow our DEBTORS' REVOLT: the intentional default-en-masse.

    Just stop paying your student loans, etc. If enough people - doesn't need to be everyone, just a critical mass, say 25% - intentionally default, the financial sector will spiral into a desirable collapse.

    I and many others are doing this. My student loans have effectively ceased to exist, and I am free.

    JPR

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  15. Hello:

    Watch out! Be VERY careful. The lenders want you to default on your student loans.

    Once you default (as I did), they can charge you 20% of the value of your loan as a "rehabilitation" fee. So my 1st 12 payments of $1,600 a month did not count towards principal or interest.

    If you default, I advise you to go "off the grid" and never give the jackasses another penny.

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  16. RE: 9cd93f46-3a42-11e0-afc9-000bcdcb2996 said...
    Hello:
    Watch out! Be VERY careful. The lenders want you to default on your student loans.

    --
    No - while they *do* currently make a profit from defaults, it is because the default rate falls within the band that they can predict and manage. So yes, they want *you* to default, but they don't want a critical mass of *us* to default. They could not absorb such an increase event.

    JPR

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  17. Rose,

    What is the name of the servicer of the undergrad loans? Put them on blast over here, in fact start listing names of people you have spoke to, phone numbers, fax numbers, etc. If they are going to play hardball with you, give them the finger accordingly.

    Sorry to hear about the debt woes. These lying thieves will do everything they can to put you in "default" so they can begin slapping you with all types of penalties and fees. Make this your number one priority until the deferment is complete.

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  18. I went through this years ago when they were less sharky - I started by faxing the documents several times AS REQUESTED and nothing happened and I was shocked. Duh.

    I then fedexed and called a few days later - even though fedex confirmed they had delivered, the agency mysteriously couldn't find my paperwork.

    At that point, I started faxing daily (I had access to a fax machine) and calling daily, noting every day who I talked to and what they told me that day and kept them on the phone as long as I could. Their stories changed day to day - one day they had info on loans a and b, but not c, the next day they had info on a and c but not b.

    Even once they told me they had everything and it was in process, I kept faxing and calling daily until the deal was done. Partly because I didn't believe them, partly because I figure, hey, I'm going to cost them as many customer service minutes as I possibly can.

    They sucked then and they suck worse now.

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