Beating a Student Loan Lender at Their Own Game
So, with no income and my private student loan payments, interest and fees, I was headed for default.
Sallie Mae’s collectors called me up to 10 times per day, even on weekends and holidays. I begged their representatives (and recorded the conversation on camera, as shown inthe CNN documentary Ivory Tower) to make my payments affordable so that I could begin to pay them back rather than default. They refused.
The only option Sallie Mae offered me to avoid default and subsequent financial ruin was to pay a $150 fee every three months to put my loans in “forbearance”. But interest – more than $1,100 per month on my $36,000 in loans – would still have continued to accrue and that $150 wouldn’t be applied to either the interest or the growing balance. It was mind-boggling.
It’s rare to hear stories about college students taking out private student loans from a lender like Sallie Mae and then beating them in court after being hounded and sued for money after defaulting on the loans. I was able to lock-in low interest rates on the private student loans I took out, but Stefanie Gray wasn’t able to get a cosigner on her loans (both her parents passed away when she was younger) and was given “credit card-like interest rates.” That was the beginning of Gray’s troubles, but this story has a happy ending.