Let us please be civil and as always, Caveat Lector. ======================================================================== Archives Available at:
http://www.mail-archive.com/[EMAIL PROTECTED]/ <A HREF="">ctrl</A> ======================================================================== To subscribe to Conspiracy Theory Research List[CTRL] send email: SUBSCRIBE CTRL [to:] [EMAIL PROTECTED]
To UNsubscribe to Conspiracy Theory Research List[CTRL] send email: SIGNOFF CTRL [to:] [EMAIL PROTECTED]
Om
--- Begin Message --- -Caveat Lector- I just received MY notice in the mail, over 6 months after the "accounting error" was acknowledged by Sallie Mae. What I owe them has increased from $125 to $215 a month, due to THEIR "billing error." I guess I fall into the rare "one percent" category mentioned.
(Note the aside below pointing out how, due to Sallie Mae's "error," Sallie Mae was able to profit immensely from government subsidies: First they ripped off the government, now they're trying to rip off consumers, with the consent of the government.
Coincidentally, this at a time when HUD's accounting is as suspect as Enron's and Sallie Mae's sister Fannie Mae is also under investigation for possible fraud. Luckily for them, they're all buddies of George Bush ...
Part 2 describes how Sallie Mae operates. You're safer borrowing from Mafia thugs.
Errors double some student borrowers' bills
By ANDREW MOLLISON
Atlanta Journal-Constitution, May 22, 2003![]()
WASHINGTON -- More than 2,000 confused, curious or enraged borrowers are calling Sallie Mae each day to find out why the payments on their variable-rate student loans are shooting sky-high at a time when interest rates are sliding.
Sallie Mae, the firm that handles about one-third of the nation's student loans, is telling them that it installed a payment calculation system for variable-rate loans improperly in 1992 and didn't detect its mistake until late last year. During that decade, hundreds of thousands of borrowers were overbilled some years and underbilled in others.
Borrowers began calling Sallie Mae this month as it started to notify up to 1 million underbilled borrowers that they have to pay more in the future, either in higher monthly payments or in extra interest payments on loans extending beyond their original 10-year terms.
One of the affected borrowers, a Texan who declined to be identified, has been paying student loan bills of $97.26 a month. Sallie Mae notified her last week that starting July 1, her monthly bill will be $200.60.
"In the simplest terms, you have been paying off your loan balance too slowly," said the letter to her from Sallie Mae. "We apologize for this mistake, and we are committed to working with you to identify the best way for you to catch up on your monthly payments, or to extend them if you wish."
It also gave her $6.55 credit to cover extra interest expenses she had incurred because her principal wasn't being paid off fast enough.
Sallie Mae's letter suggested she call a special toll-free number (1-800-890-9798) "to discuss repayment options or ask any other questions about your student-loan account."
The Texan's jolting $103 increase is bigger than most, said Martha Holler, a spokeswoman for Sallie Mae. The increase will be less than $30 for 74 percent of the 800,000 to 1 million affected borrowers, she said. It will be $31 to $70 for 21 percent, $71 to $100 for 3 percent, and more than $100 for 2 percent of the borrowers, Holler said.
Education Department officials are upset at the furor, which could undercut their argument that the private system of federally subsidized student loans is more efficient than the competing system of direct loans from the government.
They say Sallie Mae learned about the problem in August and figured out what went wrong by December, but didn't tell them about it until January. At that time, it informed the department that it had found a systems problem and had fixed it.
The officials didn't learn until March that borrowers who didn't bring the mistake to Sallie Mae's attention were still receiving erroneous bills, because Sallie Mae wanted to delay changes until it makes its annual adjustment in variable-rate payments in July. In the meantime, most borrowers who were paying exactly what they were billed were falling further behind.
Senate staff members, alerted by scattered constituent complaints, asked for a briefing by Sallie Mae in April. As the Chronicle of Higher Education prepared a story on the problem, Sallie Mae agreed to notify its borrowers before the end of May and set aside $9 million to cover the cost of notification and repaying overcharges for interest.
In a letter sent Tuesday to Education Secretary Rod Paige, Rep. George Miller of California, the ranking Democrat on the House Committee on Education and the Workforce, requested a report by May 27 on how the department plans to protect the borrowers and "avoid a similar situation in the future."
Sallie Mae's letters to borrowers are to be delivered before the end of May. They are being spaced out through the month, so that the operators at two Sallie Mae call centers will not be overwhelmed, said Jim Boyle, a spokesman at the Reston, Va., headquarters of SLM Inc., a private firm whose subsidiaries include Sallie Mae.
"Eighty people, basically the best of the best of our phone reps, have been assigned to this problem," Boyle said. One calling center is in Panama City, Fla. At the other center, in Killeen, Texas, those trying to calm down, console and counsel the callers include several who know a lot about handling stress: their spouses from nearby Fort Hood are stationed in Iraq.
"The callers can learn that they can keep their payment the same, but stretch it out longer than the 10-year period," Boyle said. "But we don't push that aggressively. We explain to them that in the end they would pay slightly more in interest" to Sallie Mae.
"If the amount is so insignificant, maybe the lender ought to eat it," said Barmak Nassirian, an external relations official with the American Association of Collegiate Registrars and Admissions Officers.
Endorsing Nassirian's position, Mary Cunningham, legislative director of the U.S. Student Association, said, "I think the phone number Sallie Mae provided for borrowers was a good step in the right direction, but they need to be more creative in finding a way to protect the borrowers who were misled."
But Boyle pointed out that borrowers whose payments were too small to make the 10-year deadline benefited for months from the free use of money that would otherwise have been used to pay off their loans.
Besides, the promissory note signed by each student says that the borrower, rather than the lender, is responsible for paying the correct amount. But Cunningham said many students trusted Sallie Mae's calculations more than they would their own.
The Education Department is trying to figure out whether Sallie Mae's errors also caused the [government] to make excessive "special allowance payments" to Sallie Mae. Borrowers who were underbilled by Sallie Mae have larger loan balances than they would have under an accurate billing system, and the government bases its special allowance payments on the size of a lender's portfolio of unpaid loans.
"We're doing an independent review and analysis of the entire situation," said spokeswoman Marianna O'Brien of the department's Office of Federal Student Aid. "We want to make sure the borrowers are treated fairly and that the government's special allowance payments are accurate."
Theresa Shaw, who was chosen last August by Paige to direct the department's student aid programs, decided not to recuse herself from the review, since her 11 years as a Sallie Mae executive ended in 2000, O'Brien said.
A check of the department's Web site on Wednesday failed to find any mention of the debacle, which affects about one out of seven people whose student loans are processed by Sallie Mae.
Find this article at:
http://www.ajc.com/news/content/news/0503/22studentloan.html
From the Form 10-Q filed with the SEC by SLM Corporation (Sallie Mae):
"In the fourth quarter of 2002, the Company discovered an error with the annual calculation ofmonthly payment amounts associated with variable interest rate Stafford, SLS and PLUS loans. The error has caused approximately 1.1 million of the Company''s serviced student loan accounts to amortize too quickly or slowly, i.e., not in accordance with their repayment term. The Company took voluntaryremedial action by crediting the affected borrowers' accounts and took a $9 million charge for servicing adjustments in the first quarter of 2003 for the estimated interest credit. Substantially all payment amounts have been reset to the correctly amortizing amount and substantially all affected borrowers have been notified.
"The Company has reported this matter to the U.S. Department of Education (the DOE) and has met with representatives of the DOE on several occasions to discuss the impact of the under-billingerror on borrowers and the Company's remedial actions. The Company continues to discuss with the DOE the appropriateness of any further remedial actions.
"A lawsuit that seeks class action status for borrowers affected by the monthly payment calculation was filed in California State Court in July 2003 against the Company and certain of its affiliates. The complaint asserts claims under the California Business and Professions Code and other California statutory sections. The complaint further seeks certain injunctive relief and restitution. The Company believes that this action is without merit."
www.ctrl.org DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance—not soap-boxing—please! These are sordid matters and 'conspiracy theory'—with its many half-truths, mis- directions and outright frauds—is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRLgives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credence to Holocaust denial and nazi's need not apply.Let us please be civil and as always, Caveat Lector. ======================================================================== Archives Available at:
http://www.mail-archive.com/[EMAIL PROTECTED]/ <A HREF="">ctrl</A> ======================================================================== To subscribe to Conspiracy Theory Research List[CTRL] send email: SUBSCRIBE CTRL [to:] [EMAIL PROTECTED]
To UNsubscribe to Conspiracy Theory Research List[CTRL] send email: SIGNOFF CTRL [to:] [EMAIL PROTECTED]
Om
--- End Message ---
