American Intercontinental University - AIU Online - SallieMae Financial Adviser Fraud Deception ripoff Wilkes Barre Pennsylvania

Friends, I am John, the one that posted this report. BusinessWeek magazine also wrote about me in the May 21,2007 edition. What is not being recognized is the fact that I was sold a private loan as a government loan. The Financial Aid Adviser at A.I.U. told me that SallieMae was a government entity. I thought I had secured 3 government loans for low-income people. At least that is what I was told. I was also told how lucky I was to receive them. Since prospective students have no way of seeing their FAFSA results, they can only go by what their financial aid adviser is telling them. In my case it was not the truth. To complicate this matter further. When my payments came due and I was first aware of the matter, I immediatelly tried to resolve it. A.I.U. denied everything and put all the blame on SallieMae. SallieMae did not care if I was lied to, there only response for a year now has been you signed the loan, you have to pay it. (Keyword) signed. I have not signed for this loan... They have not worked to resolve my situation one bit. If anything, they have made it worse by hurting my credit. When you go to McDonalds and you place your order, and they mess up your order it is almost immediatlly fixed and to the customer's satisfaction. Or, at least they try. When I noticed the true facts about my loan and tried to work it out with Sallie Mae's customer service, they were unwilling to work the matter out. In other-words they are saying, "we served you what you did not order. We are not going to straighten this out. We are not going to give you your money back. You have to take the crap and eat it too"...I feel personally that A.I.U. is the one solely responsible for my situation because of their sales tactics to start with, however Salliemae's unresponsive and unwillingness to try to help resolve this matter has hurt me and my family beyond compare by hurting my credit. SallieMae has made this very personal. Because of the pain and suffering I have endured over this situation I will go to jail before I pay SallieMae one dime. This has been a traumatic experience on me. I am 47 years old. I am the kind of person that if I owe somebody a nickel, I cannot sleep without thinking about it and I pay them right back. I noticed my credit history started back in 1976. I have never had a flaw on it. In otherwords for 30 years I have always made my payments. SallieMae is trying to sqeeze blood out of a turnip. You can't do that. I have never faced a bigger discimination in my life since they affected my credit score. And get this, they keep sending me offers for another loan but at a 25% interest rate. How unreasonable is that. They have a person now unwilling to pay for their first loan and they want to sell them a second or third. What gives??? Is this what we have evolved into???

Sallie Mae is a loan shark. Its almost like getting a pay day loan. If one can, they should find alternative financing options. I attended a school that only offered Sallie Mae, applied for a 5,000 loan and they wanted almost 11,000 payback, and I don't have bad credit. I cancelled the loan, took out a personal loan with my bank.

I think the school director was not happy with that because I heard that the school was getting kick backs from Sallie Mae.

Anyway the only places of education that deal with Sallie Mae are all these overpriced fake schools because state university's and community colleges offer traditional financial aid in the form of Guaranteed Stafford Loans, an abundence of grants and scholarships.

It sounds like the loan with the 18% interest rate was the Sallie Mae RECOURSE loan as opposed to the SIGNATURE LOAN. The Recourse loan does in fact have a higher interest rate because it is offered to students with poor credit and no cosigner and is used only as a LAST RESORT. Had you qualified for the Siganature loan (based on credit score or with a cosigner), you would have gotten a lower rate. Now, if you get a good Financial Aid Advisor, they should have explained to you up front that when you did not qualify for the Siganture loan, you would now be considered for this higher interest Recourse loan (You can decline the loan by not signing the promissory note. but then how else would you have paid the school?). I work in this field (former employee of AIU) so let me explain how this comes about. These for-profit schools (and all colleges for that matter) will always award financial aid in order of student preference. We start with grants and scholarships (if eligible), then the low interest federal loans (Staffords or Perkins) and if this is still not enough to cover your costs, only then will we go to these private, credit-based loans. There is no benefit to the school to go to a Private, high interest loan, when we can get you 100 percent covered without it. There are no kickbacks, or benefits to the school for these loans. In fact, there are several disinsentives, which include loss provisions and more work for the financial aid department to process the loan (These loans require additional forms submitted by the FA advisor). Now it is unfortunate, but due to the extremely high cost of these institutions (around $500 per credit hour, or $5-$7.5K per term depending on status, program and number of hours), the "easy" federal and state funds like the Stafford do not cover the entire cost (because these are capped). Or, it is not uncommon for a student to Max out their Staffords (there is an aggregate CAP of $46000 for Undergraduate Independent students) before they finish, having little or no funding left. Therefore, there is a funding gap which has to be covered with some other source. The easiest way to cover this gap is with a Private Education loan, unless you happen to have the cash or have employer reimbursement. You can technically use any lender you want to cover this gap. You do not have to use Sallie Mae. However, you must have good credit to qualify with whichever lender you choose. Because so many students at these institutions have either poor credit or no cosigner, the school has set up an arrangement with the "Preferred" lender to provide funding for Students with "less than stellar" credit, but at a price, both to the student AND the school. The student is charged higher interest, because they are deemed a higher credit risk. This is how credit scores work with any borrowing you do, be it auto loans, mortgages, etc. Bad Credit = higher interest rate. This is finance 101. The SCHOOL on the other hand, also has to take a hit on these loans, because they have to put money aside (e.g. 20 percent) to provide for the high risk of default. So, for example, If you get a $10K Recourse loan, it actually costs the school $2000. As a student, you would not be aware of this, but it is happening behind the scenes. Again, if you have a good financial aid advisor, they should explain that you will get a higher rate, why you have a higher interest rate and should always encourage you to either try another lender, consider part time or get a creditworthy cosigner BEFORE using this type of loan.