Online Campaign Prompts Sallie Mae to Change Fee Policy for Loan Suspensions
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Score two for online consumer advocates -- or, as they might be called, Occupy Online.
On Thursday, three months after Bank of America backed down from imposing a $5 monthly debit card fee in response to an online Change.org petition that collected 300,000 signers, Sallie Mae, the nation's largest private student-loan provider, changed its fee policy in response to an online petition.
For years, Sallie Mae had required unemployed people who could not afford their monthly payments to pay a $50-per-loan fee every three months to suspend their payments temporarily, even as interest charges mounted.
Sallie Mae called this forbearance fee a "good faith deposit" -- but it was neither credited to the borrower's account nor refunded.
Stef Gray, 23, a New Yorker who owes $600 a month on four loans, saw it as a predatory effort to squeeze blood from a generation of turnips -- graduates already buried under a mountain of student debt. In November, she started a petition, "Tell Sallie Mae: Stop the Unemployment Penalty" with Change.org., a group based in San Francisco. "Sallie Mae is preying on people like me and cashing in on the fact that we need more time to find work before we can repay our student loans," it said.
Ms. Gray, who has paid $300 to Sallie Mae in forbearance fees, had another $150 due for January. (Although she has four loans, she said, the top Sallie Mae fee is $150.) She did not pay the fee, and this week her loans became delinquent.
On Thursday morning, wearing a cap and gown and accompanied by Molly Katchpole, 22, the nanny who started the Bank of America petition, Ms. Gray visited the Washington offices of Sallie Mae to hold a news conference and deliver the petition, which had attracted 77,000 signatures.
Thursday afternoon, Sallie Mae blinked.
"We have been giving careful consideration to our policy for some time, and we are changing it to apply the good-faith payment to the customers' balance after they resume a track record of on-time payments," it said in a statement.
Patricia Christel, a Sallie Mae spokeswoman, said that about 4 percent of its private student loans are in forbearance. The new policy will be retroactive to forbearances started Jan. 1.
Ms. Gray was pleased, if cautious.
"It's a partial victory," she said. "They're still charging a forbearance fee, which they don't for federal loans. I'm glad they're not pocketing the fee, but they're still charging it. And I still can't pay it."
First Published February 3, 2012 12:01 am
