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Catherine Reynolds’ "Loan to Learn" Under Fire Again
After more than a year-and-a-half out of the limelight, Catherine Reynolds' nonprofit company EduCap -- which used to market high-interest private student loans under the brand name Loan to Learn -- is back in the news. The Senate Finance Committee is reportedly expected to soon release findings from an investigation it has been conducting into allegations that the company has abused its tax-exempt status. In addition, former Democratic Senate leader Tom Daschle's nomination to be the next Secretary of Health and Human Services ran into trouble in part because of concerns raised about two free trips he took on the company's corporate jet.
At Higher Ed Watch, we don't quite know what to make of the accusations against Daschle, who withdrew his nomination on Tuesday. But we do know a thing or two about EduCap.
From the start of the blog in September 2006, we have focused much attention on Catherine Reynolds' private student loan company. Our earliest posts looked at how the company, through its marketing material, was pushing financially needy students to borrow private loans rather than take out lower-cost federal loans. We also exposed efforts by Reynolds to woo financial aid administrators and promote her private loan product by inviting them to participate in a four day, all-expense-paid trip to the Caribbean West Indies. The story was picked up by the national media and the trade press, and within three days of its initial publication, the company canceled the trip.
In the summer of 2007, we ran a series of stories questioning the company's tax-exempt status, considering that it did not seem to provide any benefits to students that were superior to those they could receive from for-profit lenders in the private student loan market. In fact, we found that the private loans it marketed were as expensive, and in many cases, even more expensive than those of its for-profit competitors. We also found that the company was lending to better-risk students -- that is those who tend to have higher credit scores than the population of students who borrowed private loans from its largest for-profit rivals.
We also fleshed out allegations -- first made by The Washington Post -- that Reynolds had used much of the revenue that the tax-exempt company earned off of the backs of borrowers to raise her stature in the world of philanthropy and to hobnob with the rich and the famous. And finally, we shared complaints Loan to Learn borrowers sent to us about their experiences with the company, and comments we received from former EduCap employees confirming the validity of these complaints.
At Higher Ed Watch, we applaud the Senate Finance Committee for investigating EduCap's alleged abuses and eagerly await the panel's findings.
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Keep Digging the Tax Cheats are in there somewhere!
They need to keep digging, the IRS has been snooping around for years, you know the old adage, where there is smoke there is fire. This is another example of tax cheats living high on the hog while pretending to be big time philanthropist. S/he never game a dime to anyone except themselves.
A Shady Operator
Catherine B. Reynolds is shady, shady, shady. She's an opportunistic social climber, and her student loan business was built on the sweat of poor students.
agreed.I worked at this
agreed.I worked at this company for several years in the early 1990's (The company was then called University Support Services). She was pure evil...she loved humiliating her employees, and she ended up screwing over or suing about every company we did business with (Norwest Bank, National Computer Systems, a software development company in Columbia, MD, the list goes on...) I pray to God that she goes down.
How typical
Wow, HEW is not sure what to think of Daschle, but has plenty of scorn for Loan 2 Learn. I agree with the scorn for Loan 2 Learn - that company, along with Student Loan Xpress, and College Loan Corporation engaged in illegal practices that brought down the FFELP industry and cost thousands of honest and hard working FFELP employees (incl. yours truly) their jobs. However, why no comment on Daschle? If it were Boehnor or McKeon you would have PLENTY to say about those 2 measly corporate jet rides. But it appears a Dem can ride the jet all he wants with no scrutiny whatsoever... Nice hypocrisy guys.
Why are they spending time on Educap?
Why is Congress and the media so concerned with Educap??
If someone wants to do a coherent story about the abuse of non profits, corruption of Congress, and enormous excess within the student loan industry-, it would write first about Sallie Mae's takeover and conversion of multiple non-profit guarantors over the past decade , then discuss the tens of million it has spent lobbying Congress members and their familes ( and the removal of consumer protections that they received in return), and describe Al lords Golf Course, and the baseball team he almost bought.
Sallie Mae is the Bully in the Schoolyard. By comparison, Educap is the kindergartner in the sandbox. Also, of the roughly 4000 submissions we have received from borrowers at Studentloanjustice.org, not one- jnot even one- menions Educap. While I must say that the site is probably biased against Sallie Mae, this is still pretty astonishing.
This smells like some kind of inside the beltway campaign. I hope that in the future, the people in power will focus on the real bad guys.
Bank of America Student Loans, Loan to Learn, EduCap, NCO Financ
We are presently in the middle of a mess with this company. Yes, I said THIS company, because it goes by many names. We took out what we were told, and the paper work said was a deferred student loan with BoA. Well, guess what, it isn't. Somehow all of a sudden, this is an EduCap/Loan to Learn loan that is not deferred.
My two students (twins boys) have been making payments since they started college. One son lost his job, and couldn't make his payments. They came after us, the co-signer. Anyother time this would have not been a problem, but we were having financial issues at home and couldn't make the payments. We were getting calls sometimes 20 a day from EduCap and NCO financial, their loan sharking collection company. I was sending what I could, which wasn't much. We were threatened by all reps we had dealings with. I rec'd an email from BoA, I answered it, and was put into contact with a Patrick. In 48 hours we had sent documentation about our son's and our financial situation. We were trying to defer payments for 3-6 months and basically starting over. Well, even with our medical expenses put in -- I'm recovering from breast cancer, my husband is recovering from a heart attack -- we were denied. That is the last thing we ever heard from them. My husband's government contract was taken over by a new company, another position, more money. His old company paid out all his leave, so right this very minute we have the money to pay this up-to-date.
Talked to EduCap, who transferred me to NCO (wouldn't even deal with me). This account is now in default! Even though I am in the pocess of getting their money to them, I and my son will have this default on our record for 7 - 10 years, even though we are going to be paid up and have TRIED to work with these people. Someone needs to run them out of business. How many other student's are being messed over by them???? My next step, I'm contacting our state attorney general and will not rest until I get these people run out of New Mexico!!!! What else can I do????
reply
I typed in loan to learn to get some info on a loan I took out for my daughter's education. I just happened to click on this site. I didn't realize so many others were going through the same nightmare. We experianced some financial setbacks due to a medical condition of my mother-in-law. We've been dealing with all of her person needs, medical needs, medicare, public assistance, home health, tests, doctor visits, surgery and recovery. Everything! (Oh and of course, the evil siblings that just wanted to put her in a home. They thought it would all be paid for. They didn't care by whom as long as it was not them. I been told most families in real crunch times have one or two of these.)
Anyway... I am being sued by educap and not unlike yourself I have made contact with both the lawyer and educap and was basically told no to setting up auto pay. I was asked by the lawyer if I could pay $1,000.00 month. I offered $100.00, which is all I can do at the moment. He said to fax him my finacial info. I was flat told by educap to contact the lawyer. The letter form the lawyer states that no lawyer at the firm had reviewed the account or any of the circumstances. If fact, I was told they had not received the file.
I assumed that I would be contacted when they had the file but instead a civil suit has been filed. I have always intended to pay and have made mutiple payments. The info on the filed paperwork is incorrect, claiming the wrong amount of the original loan and that no payments had ever been made.
The thing I regret more than ever dealing with this company is the fact that my daughter's going to have this black mark against her.
I hope you are sucessful in your attempt to receive fair and respectful treatment from this company. And I wish you luck in bring them to answer for thier business practices.
With regards,
Joanne