Sallie Mae is one horrendous institution and should be thoroughly investigated right down to their accounting department and their failure to give the consumer any written bank statements in regard to their loan. The policy of 10 years to repay is extremely deceptive as the students fail to consider Sallie Mae's "vigorish" and methods of compoundung interest. Too bad a savings account doesn't work the Sallie Mae way.

This is such a great development. I first wrote about preferred lenders at my web log a few months ago (here's the url: http://history-and-education.blogspot.com/2006/10/scary-education-story-preferred-lender.html). While I'm not a resident of New York state, I hope that NY's Attorney General's office thoroughly and thoughtfully explores this phenomenon. It will be good for all of higher education - so long as the investigation's results are disseminated widely. - Tim

If you are upset to read that at "nearly 750 colleges across the country, a single lender provided 95 to 100 percent of all federal loans," you should be livid to know the following:

At nearly 1,300 colleges across the country, a single lender--the U.S. Department of Education--provided 100 PERCENT of all federal loans available.

There are no Preferred Lenders at Direct Loan schools. Only Required Lenders.

My niece had to drop out of her sophmore year at the University of New Hampshire (UNH) this Fall so we could work on taking care of the extremely bad Signature "Student" Loan she took out with Sallie Mae in her freshman year. Unfortunately I wasn't involved in helping her secure her loans and scholarships that year and when UNH recommended she secure the remaining $9,600 balance through Sallie Mae's "Student" Loan program she jumped at it. Her older sister co-signed for the loan since she also assumed a student loan would be a good deal. Neither girl understood the variable interest rate or the monopolistic clauses in the loan itself. This past Fall, what would have been her sophmore year, I looked over her prior year's student loans and noted the 14.25% interest rate on the Sallie Mae loan and that nearly $1,600 of cummulative interest had been tacked on. Since that time we've been working on finding a more affordable school and also trying to find a way to consolidate or refinance the Sallie Mae loan. Last week I called Sallie Mae and spoke to two different representatives. Below is a synopsis of the second phone call I made: I explained to the representative on the line why I was calling. I was interested in re-financing or consolidating the current loan in order to get better terms. I explained the terms we currently had: * Although the interest rate we have is 14.25%, my software shows a monthly payment of $140. Their latest statement shows a payment of $157. That's an additional $4,000 that I couldn't account for. While on the phone my niece pulled out a new statement from Sallie Mae that now shows 14.875%. Now, the $9,600 + the accumulated interest (which is now over $1,555) at that interest rate is still lower than the $157 they're showing. Also, in 3 years the accumulated interest will be over $5,400 at this rate. I said, "So overall these loan rates are too high for my niece. You can obviously see that these terms are a bit ridiculous and we've got to do something." She agreed. I asked her where that additional $4,000 came from. She said she didn't understand at first, so I walked her through the rate calculation. She then saw there was a difference but she didn't have an answer. I asked her if Sallie May was tacking additional interest on future interest or if there was a hidden fee that I wasn't seeing on the form. She said there were no additional fees she was aware of. I then asked what we'd have to do to refinance this loan to get better rates, and also what kind of rates we could get. She said with a co-signer we could get a loan starting at 8.25%. She said without a co-signer it would be prime plus 6%. I said prime + 6% would be 14.25%. She said yes. "Well, you currently have her at 14.875% AND she HAS a co-signer. Why are you charging her as if she doesn't have a co-signer and she does?" Long silence on the other end. "Why would we bother with a co-signer if you're going to charge her the highest rate anyway? You know what I'm saying, don't you?" She said yes. "Well, what would be the process of refinancing?" She asked if my niece had graduated yet. I said, "No. As a matter of fact she dropped out of school this year to take care of your outlandish loan." She said we couldn't refinance or consolidate until Cathie graduated. I said, "So you are basically forcing her to accept that you're going to add about $6,000 to her principle before you'll even allow her to refinance to reasonable terms???" She said, "well any bank you would call would do that. No one would let you consolidate before she graduates." I said, "that can't be true. How could anyone put such outlandish terms into a young students loan? I've talked to a few banks and credit unions so far that are at least willing to help us. It's just a matter of what kind of terms we can afford." Long silence. I then said, "well, if we stay with Sallie Mae on this loan my niece will pretty much be working for you for a long time after she graduates. She'll become your indentured slave since she obviously won't be able to afford rent or a mortgage for a years. Do you have room in your office for a cot? You'll like having my niece around. She's a nice girl." Long silence.

All I can say is IT'S ABOUT TIME! Lenders like Sallie Mae have dominated the industry for years which has done nothing but disservice to students. There are several high profile schools that have "special deals" with Sallie Mae in which the school will only allow students to borrow from them...at higher interest rates!!!! It's like Direct Lending for the FFELP program...less competition always hurts the consumer.

 Nearly two years ago, my son applied for a Sallie Mae loan thru the California Culinary Academy financial aid office.  At first they turned him down, and then accepted him if he had a co-signer.  I agreed to co-sign with the understanding that his $50,000 debt would a little more than $500/mo. for 10 years. Now that he has graduated, Sallie Mae sends us a statement showing that we owe $128,000 over the next 179 months.  They have changed the number of payments, the payment amount and the interest rate (to 12.25%) without ever providing me the cosigner with a truth in lending statement.  I thought Sallie Mae was created by the Department of Education. Don't they have to abide by Federal Lending Laws?  Does anyone have any advice about where to refinance?  Although my son graduated at the top of his class, everyone knows that just starting out in the Culinary Industry means long hours and low wages and there is no way he can manage over $700 in monthly payments.  I should have researched on the internet all the negative comments about Sallie Mae, and I would have charged his tuition on a credit card at about half the interest rate. I am  interested in hearing anyone else's advice on how to get rid of Sallie Mae.

From what i have seen any complaint issued agaisnt Sallie Mae disappears after the elections. I for one have a forged document (my signature forged) that no one wants to see. I have tried the state and Feds no one really cares. Sallie mae in fact sent me another letter today modifying my student loan. They have now changed the results six times. Raising the interest rate to almost 17 percent while lowering the minimum do. Acording to Sallie mae its becuase of a forbearance that I requested is expiring. I singed no forbearance and they sent me a copy and yes it had a forged signature. Sallie may Forged my signature and said  that if i want the forbeareance removed that i would have to pay them. Yes folks i have it all in writing. B ut no one cares. All this because i wanted to learn to fly. an 11 percent signature loan that has legs .  Anyone who wants to assist and join a calls action agaisnt them I say lets do it. on Y a hoo i am riptorn_99 Please lets bring whats righfully ours to rest

Just like the mother whose son graduated from culinary school, I came to America to chase a dream and become a better person in this competitive world. I enrolled in the California School of Culinary arts and being naive they recommended Sallie Mae to me. I wish I knew better. I was excited since I had no co-signer or good credit and I had the opportunity to get money for school. I jumped onto the train. I was told my payments would be about $200 dollars. Well, I am now looking at $500 dollar bills from Sallie Mae. I earn $2000 dollars a month. I can't even afford to send my people back in Africa some form of help because I basically have nothing left after I pay my bills. I requested for forbearance after I lost my second job and I was denied because my income was more than 20 percent of my gross not take home. How do you calculate income on gross?I dont get to take the taxes home you rip offs. I settled for lower payments and that's agreed by the Sallie Mae supervisor somewere in India. Two days later I receive an email that I am past due 164 days and they need a payment of $2000 dollars IMMEDIATELY.  I cried my eyes out, got on the internet and try to find a solution and a way not to deal with Sallie Mae at all. I don't know if i will be able to though, since i already consolidated my private loans with SALLIE MAE. I AM SICK OF WORRYING. I KNOW MY CREDIT HAS BEEN RUINED and my dream that I have been working towards ruined. I am sending Michael Moore an email--- we need him to do a documentary about Sallie Mae. 

Has anybody figured out how to re-finance Sallie Mae student loans?  They keep raising my son's interest rate on his loans which I have co-signed and now the payments are so high neither one of us can afford it.  Everytime I try and call they say Forebearance to us which we have done twice now we are really in trouble.  My son took $50,000 to live his dream as a pilot and now with the increase he cannot go forward and will have to work in a different field to pay the loans!! HELP!

I find that it is really sad how Sallie Mae is treating humans less than dirt. I am grieved by the fact that they have destroyed soo many lives through their unjust practices. The fact that people are subject to constant harrassment, pathetic customer service, and insane interest rates and fees sickens me. It's sad to know that one can end up paying triple if not more on a loan due to the greed of this corporation. I am longing for the day when they reap what they've sown.I know people who are victims of SLM and I warn all those I can about them.