Why Sallie Mae Should Take Google’s Advice: Don’t Be Evil
Sallie Mae is the country’s largest provider of private student loans — and despite their innocuous name, they’re guilty of some pretty awful practices.
Sallie Mae has a dual role of a lender and collector. As Elizabeth Warren said, “Sallie Mae gets to play every hand at the poker table.” And, “Student-loan debt collectors have power that would make a mobster envious.”
When customers call seeking assistance, Sallie Mae representatives say pretty terrible stuff — a story from one of our members: “I encouraged my grandson to pursue a college degree, because I thought as a Black male, his chances of landing a decent paying job would be much improved. Since he graduated, he has been unable to find a job with a living wage. His paycheck barely covers the gas he needs to go to a low paying job, much less repay his student loans. Because I co-signed, I now use a great portion of my Social Security check to pay the loans. When I called Sallie Mae to work out a payment plan, the representative told me to tell my grandson to sell his plasma [i.e., his blood plasma] to pay the loan.”
As a debt collector, Sallie Mae is highly abusive, using the Freedom of Information Law to collect personal information about students from their schools, and contacting borrowers’ employers, families, and neighbors, to the point of violating the Fair Debt Collections Practices Act. One Rebuild the Dream member shared this story with us: “My son not been able to find a decent job, is barely making ends meet so has not been able to start paying his loans. He’s talked to Sallie Mae regarding this but they continue to call him daily, including Saturday and Sunday. Then they started calling me daily since I was listed as a secondary contact. When I complained to their representative that this was harassment, I was informed that they can call each contact number up to eight times per day.”
Charges unnecessary and exploitative forbearance fees — $50 per loan, per 3-month block — essentially an “unemployment penalty”
Successfully lobbied Congress to strip away basic consumer protections from student loans, such as bankruptcy protection on private student loans.
Successfully lobbied Congress to obtain Draconian collections practices, including garnishment of wages, tax returns and federal benefits such as Social Security, without a court order to make it easier for them to harass.
Angry yet? Click here to sign our petition telling Sallie Mae’s CEO Albert Lord: Work with students — not against them. We’ll be delivering signatures next week at Sallie Mae’s shareholder meeting in Delaware.