Private College Student Loan

SALLIE MAE. Can anybody tell me about an experience with Sallie Mae Student Loans?

My daughter took out a loan from the college she was going to attend and they sold it to Sallie Mae. She had to quit college and now they are after her like the Mafia to get almost twice as much money as when the loan started out. She barely makes enough to live on, and cannot afford to pay the huge payments they are demanding. Are they really unreasonable or is she not telling me something?

Public Comments

1. * Before you begin to repay your student loan, your loan holder must provide a repayment schedule and detailed information about interest rates, fees, and the balance you owe. In addition, your loan holder will provide you with information on the repayment options available on your federal student loans. * You may have a right to defer payments for certain defined periods or to request forbearance, if you qualify. * You may be eligible to repay under a graduated or income-based schedule. * You may prepay in full or in part at any time without penalty. * You will be notified when your loan is paid in full. Your responsibilities as a borrower * You must pay your student loans (including interest or fees, if applicable) on time even if you don't finish your education, don't get a job, or don't feel satisfied with the education you receive. * If you request deferment or forbearance, you must continue to make scheduled payments until your student loan is placed in deferment or forbearance. Sallie Mae customers may view their loan status at Manage Your Loans. * You must notify your student loan holder or servicer immediately of any change to your name, address, telephone number, employer, or Social Security number. Refer to your Promissory Note for a complete list of borrower rights and responsibilities for your student loan(s). Exit counseling Federal regulations require that institutions offer exit counseling to federal student loan borrowers who are leaving school or dropping below half-time enrollment. Exit counseling covers: * Borrower's rights and responsibilities * Loan repayment * Consequences of default During exit counseling, borrowers are also required to provide updated personal information, such as address, telephone number, and employment. Schools must keep documentation that shows that the borrower received the required exit counseling, either in person, electronically, or by mail. If a borrower withdraws from school without the school’s knowledge, or if a borrower fails to attend a scheduled exit counseling session, the school must mail written exit counseling materials to the borrower at his or her last known address.
2. I took out about 6 student loans through the course of my college career. All which were sold upon my graduation to Sallie Mae. It is important to remember that Sallie Mae is a business just like any other. She borrowed money... and just AS IF she borrowed money to buy a car, they would STILL demand she pay on the loan. Just because it is a student loan makes no difference, she is expected to pay it back. If she didn't make car payments, it is easy for a bank to repossess a car, but it's not like Sallie Mae can repossess her brain if she fails to pay. So what she is going through is normal and any other bank would do the same. They are not being unreasonable. When student loan payments are not made (while they are enrolled in school, when they are in deferment and while she may have them in forbearance), the interest accumulates to a greater amount that what she initially borrowed. She borrowed 5000 in Sept, but since she's in school she isn't paying on it, so the interest charged that month is added on to the 5,000. Now she owes 5,030 dollars, next month she owes 5,065 dollars, the next month she owes 5,080 dollars. (These are just example amounts, I have no idea what her interest rate is). Remember, interest accumulates from the day the school got the money. If she has not been paying on it for quite some time, the amount she owes will grow very quickly. If the loan is in default, (which I suspect it is) then then Sallie Mae has a legal right to hike her interest rate to an even greater amount and charge her all kinds of "Fees" for defaulting. A loan of 5,000 could quickly balloon to a loan of over 15,000 if she does not pay on it for a long period of time. Be aware that if she is in default, she will not be able to get federal financial aid to go back to school. Her wages will be garnished and her income tax return will be seized as well. If she is barely making enough to live on, she needs to get a second job and start making her student loan payments. Or she will be making even less (albeit unwillingly through wage garnishment). Better her do it WILLINGLY so she has at least some control of her finances. Also be aware the loan company may SAY the amount she is going to send them isn't enough, but don't let that convince her NOT to send in any money. They aren't going to turn her money away, I promise!!! The moral of this story is, is once ANYONE borrows money to go to college they MUST GRADUATE. Otherwise you come out in a worse financial situation then when you went in. Stuck with a debt you can't afford to pay, can't declare bankruptcy against, and not much means to boost your income to support those student loan payments. I hope that helps a bit.