Bad news for the unemployed with private student loans — but a Change.org petition is trying to help.
A is calling on Sallie Mae CEO Albert Lord to stop charging forebearance fees to unemployed students. It has garnered more than 67,900 signatures so far — edging closer to its goal of 75,000 signatures.
Recent college graduate Stef Gray started the petition.
“I refuse to borrow $300 (for the fees) from friends and family … just to line Sallie Mae’s pockets,” said Gray, who received her M.A. in Geography from Hunter College this past May.
After graduation and a short stint as a temp, Gray found herself staring at mounds of private student loans. With no full-time job or cosigners (her parents passed away before she went to college), Gray chose to go into forbearance on her Sallie Mae loans — an arrangement that permits her to suspend payments, though the loan still accrues interest.
She soon learned she was charged a $50 per month fee for each loan in order to go into forbearance. The fee does not go towards her loans’ principal or interest.
“As an unemployed person desperately looking for work, I need every extra dollar I have to pay for rent, electricity and groceries,” Gray says in her petition.
Sallie Mae encourages its lenders to try modified, reduced payment programs if they cannot make their originally scheduled monthly payments. Gray said that even those – at more than $400 a month – are out of her reach and she was unable to negotiate a lower payment.
According to Patricia Christel, a spokesperson for Sallie Mae, the $50 fee is used as a kind of guarantee. “When customers ask for a concession to suspend required payments, we in turn ask for a good-faith deposit that acknowledges the importance of and commitment to resuming payments in the future,” Christel said.
Stef Gray created a video of her conversation with Sallie Mae about changing her loan repayment terms.
Gray acknowledged that federal loans do not have these fees and she could have been more careful when selecting her loans, although she says her college’s financial aid office and Sallie Mae were not clear when differentiating between federally backed loans and private Sallie Mae loans.
Gray says she is blown away by the success of her petition, which in less than 24 hours gained more than 17,000 new signatures. She hopes the petition will cause Sallie Mae to change its policies.
A petition on Change.org is widely to drop its monthly $5 debit card fee in late October.
Katie Bethell, Change.org’s director of organizing for education, said the site has seen dozens of campaigns around the student loan issue in the last month alone.
“There are a million different ways that students are discovering that the student loans that they received are not the deal they thought they signed,” Bethell said. “It’s a widespread issue that I think we’re going to see blow up over the next few months.”
Hadas Gold is a recent graduate of two degrees from the George Washington University. Born in Israel, raised in Arizona and now living in D.C., while she looks for that dream position.