Online petition helps waive extension fee

Online petition helps waive extension fee

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Sallie Mae will no longer pocket a $50 fee per loan for student borrowers wishing to delay payments by three months, following an online petition signed by 110,000 people.
Stef Gray, a 23 year-old college graduate, started the petition after Sallie Mae told her to pay the maximum $150 fee each time she asked for a grace period due to being underemployed. Gray has 4 loans through Sallie Mae, for each year in school.
“I want to give every penny to Sallie Mae, but they’re making it extremely difficult,” Gray said. Gray addressed college journalist throughout the nation via a conference call sponsored by change.org, Feb. 6.
Unlike federal loans, private loans through companies such as Sallie Mae are allowed to charge forbearance, a fee for keeping the loan from becoming delinquent. Consolidation is also not an option with Sallie Mae.
“You’re basically not allowed to be unemployed or underemployed,” Gray said.
In January, the unemployment rate in the U.S. fell to 8.3 percent.
When initially contacted by Gray, the company called the fee a “good faith deposit,” which is similar to a deposit on an apartment.
Gray disagrees.
“If this were a good faith deposit, I would be getting my money back,” said Gray, adding that Sallie Mae pocketed the money it charged borrowers from their forbearance policy.
Sallie Mae says only 4 percent of their loans are in forbearance.
In early February, Sallie Mae amended its policy and will use the $50 fee toward the balance of the outstanding loan after the borrower has resumed regular payments for six months.
“I feel very empowered by this change,” Gray, said. “It’s 110,000 people standing behind me and against Sallie Mae.”
Student loans have ballooned during the Great Recession despite a decline in credit card and home loans.
(See Loans on Page 3)
According to finaid.org, in late 2011, outstanding student loans reached $1 trillion, doubling since 2009.
President Barack Obama has moved to ease debt held by college graduates, proposing a cap on federal student loan payments at 10 percent of the borrower’s discretionary spending.
In his State of the Union address last month, Obama commented on rising tuition costs.
According to College Board, the average in state tuition for a 4-year public university is $8,244 per year.
“Let me put colleges and universities on notice: if you can’t stop tuition from going up, the funding you get from taxpayers will go down, “ said Obama. “Higher education can’t be a luxury – it is an economic imperative that every family in America should be able to afford.”

Lead Reporter