Sallie Mae Fraud, Deceipt, Accounting Errors, Exhorbitant Interest Rates, Encourage Default, Principal Doubled Herndon Virginia

I am not sure why the above was stated, but it could be because of the writers location. I know that they can't take your bank account over in this state (Michigan).

They also can not take money out of your spouses check if you are unemployed at least in this state. I currently have a defaulted loan and am suing Zwicker for lying on the phone amongst other things. Now that they have been served they passed the defaulted loan back to a company called OSI who I am about to do the same to.

You really need to know that many of the things that SLM and its collection agencies tell you are lies to try to scare you into making a payment. A student loan debt is like any other debt, it only stays on your credit report and can only be collected for 7 years. As stated here

http://credit.about.com/od/sv/g/studloandefault.htm?once=true&

Some of the things mentioned in the above article on scams.com here only happen to people because they don't know their rights. You rights will vary from state to state the best thing you can do if you have a defaulted SLM loan is to find an attorney in your state that can help you with the issue. Many of them will not charge you a dime.

Either way don't fall for the scare tactics that they use on people. The reason they do this is because they want to scare you into making a payment which moves up the seven years on your credit report to seven more years from the date you last paid.

As far as SLM being able to take your tax return find the answer to that here.

http://wiki.answers.com/Q/Can_a_creditor_take_your_federal_or_state_income_tax_refund_to_pay_a_judgment

Other than that good luck and do NOT back down.

First of all some of the things you have stated above are not at all true. I am only posting this so that it may possibly help someone, because that was why I started in the industry in the first place. Student and parents alike need to be aware of the terms of their loans and what type of loans they have before they sign on the dotted line. In my 2 years in the Federal Student Loan consolidation industry I have seen and heard it all and there are a few common misconceptions that are being passed along here that I would like to debunk.


1.) Your FEDERAL student loans are forgiven should you pass away. All you have to do is send in a copy of the individuals death certificate. However, PRIVATE student loans are not forgiven. I have noticed that many students have private loans and think that they are federal. BE AWARE OF THE TYPE OF LOAN YOU ARE TAKING OUT BEFORE YOU BORROW THE MONEY.


2.) There are consumer protections in the student loan industry. If you feel that a company is doing something wrong or illegal call the Omsbudsman at the Department of Education.

3.) If you are experiencing financial hardship and go into default because of it on your FEDERAL student loans, BUT have Deferment or Forbearance time available you can use that to actually get yourself out of default. It is common knowledge in the industry but obviously Sallie Mae or any other private lender is not going to parade this information on a banner for you so you need to do some of your own digging. For example....Economic Hardship Deferments have a start date on the application that needs to be filled out before the application is submitted. You can back date a Deferment or Forbearance to when you were first eligible for it. Remember you only have 3 years of deferment and 3 years of forbearance so if you have been in default for a long time this will not work. Then there is the Direct Loans route, William D Ford is the only company that will purchase defaulted loans for the purpose of consolidation. When you apply with them you must select the "Income Contingent Repayment Term". If they do purchase your loans your payment will be based on your income and any remaining balance will be forgiven after 25 years. The only downside is that you must submit your tax returns every year and if your income goes up so will your payments.

4.) If you give a collection agency your information is does NOT give them the right to wipe out your bank account. You must give permission on a recorded line in order for any company to debit money from your bank account. Also, the recordings must be kept on file and presented if the borrow should call in to say they did not give permission for their acocunt information to be used. If your account is being debited and you did not authorize it call the collection company and asked to hear the recording of you authorizing them yo debit your account. THEY MUST PRESENT IT FOR YOU TO HEAR!!


I hope this helps someone as that is my intention.

I contacted Sallie Mae the second time I lost my job, and told them I would not be able to make payments, they told me there was nothing they could do, and that the full amount would be due as usual.
This lead to non-payment until I got a job again.

Everything you decribed above is essentially correct. The important lesson here is KNOW how much you are borrowing, that you DO need to pay these loans back, and to work with your lender BEFORE you stop making payments to avoid default. There are many ways to postpone or reduce payments for periods of time (called Deferments or Forebearances).

In order to go into Default, you had to completely ingore the lender's repeated requests for a whole year. They give you every opportunity to make good on your promise to pay the loan, all you had to do was ask for a hardship forebearance. If you move, you must tell your lender, per the Master Promissory Note. You can't just move, not tell the lender the new address, and then claim that you "were never told".

If you loose your job, tell the lender (again BEFORE you go into Default, not after) and ask for a forebearance. Once you go into default, the collection process is extremely aggressive because you have already been given ample time to take some action on the loan. The reason for this is that the Federal Government, i.e. the American Taxpayers are ultimately backing the loans, so why should the American Taxpayer bail out someone who knowingly borrowed thousands of dollars, when everyone else has to pay the loan back. I know all this because I have been a Student Finance Advisor for the last 6 years.