Studentloansturnintocrushingburdenforunwaryborrowers2

会计考友 · 发表于 2012-8-16 08:12:37

Lenders in disguise
　　When Shianily Torres took out $38,000 in student loans at Florida’s International Academy of Design and Technology, she thought she was dealing with the college financial aid office.
　　She now thinks it may actually have been a representative of Sallie Mae -- in part because that was the only company that offered her a loan.
　　"My father asked if there was somewhere else we could get the loan and they said no. The school didn’t accept money from just any bank," Torres said.
Torres said she didn’t learn the rate on her loan until after graduation, when she got the bill. The variable rate rose as high as 18.5%, which requires a monthly payment of $650 -- more than twice what she makes in her part-time job.
　　She said that she couldn’t make the payments, and that Sallie Mae had not responded to her efforts to renegotiate terms.
An investigation last year by New York Atty. Gen. Andrew Cuomo found an "unholy alliance" between lenders and hundreds of schools across the country.
　　Charging more than a dozen lenders with wrongdoing, Cuomo cited a pattern of bribes to financial aid officers making decisions about which lenders would appear on school-preferred lender lists and "revenue-sharing" kickbacks -- in cash or products -- to schools that led their students to specific companies.
　　Hundreds of colleges agreed to abide by new ethics rules and not to accept gifts, and half a dozen even refunded money to students. The U.S. Department of Education tightened its guidelines to discourage quid pro quo arrangements.
　　More than a dozen student lenders, including Sallie Mae, Bank of America, Citibank and JPMorganChase, paid a combined $13.7 million to settle Cuomo’s charges, without admitting or denying the allegations.
　　Private litigation continues, however. Torres is one of dozens of students who are suing Sallie Mae, alleging deception and discriminatory practices that left low-income and minority students saddled with the highest-cost loans.
　　Andrew Meyer, the Tampa, Fla., attorney handling the case, said his law firm gained insight into Sallie Mae’s practices from people who formerly worked there as loan officers.
　　A key strategy was to make students believe the loan officers worked directly for the college, he said. Meyer said Sallie Mae purposely sent disclosure forms a month or more after classes had begun so that students would be less likely to protest onerous terms.
　　Sallie Mae’s Holler said she could not comment on litigation, but she defended the company’s lending practices.
　　"It’s risk-based pricing," she said. "Students can take advantage of an interest rate decline, like we’ve seen in the past several months, but the loan rates also have the potential to rise when there is a rising rate environment."
　　Direct marketing
　　In addition to working with schools, lenders try to reach students directly. Although some companies have failed in the credit crunch, dozens remain in business, sending e-mails to students and advertising on sites such as YouTube.
　　Loan-shopping websites also lure young people into private loans, said Nancy Coolidge, a financial aid executive with the UC Board of Regents.
　　She noted that one site -- TuitionBids.com -- encouraged students to seek federal loans first but also had a "let the bidding begin" button that directed users to an application for a private loan.
　　"The way the site is set up encourages misunderstanding," Coolidge said. "They do what we ask by saying that private loans should be a last resort, but then ask, ’Are you interested?’ When the kid clicks yes, they’re catapulted to a private loan."
　　Keith Alliotts, chief executive of TuitionBids.com, counters that customers are able to choose either a private or a federally guaranteed loan.
　　"We don’t advocate just private loans, we tell borrowers to get federal money first," he said. "But a lot of people need private loans."
　　But Alliotts acknowledged that TuitionBids.com receives a loan fee when a customer secures a private loan. The website makes nothing when consumers get a federally guaranteed loan.

会计考友 · 发表于 2012-8-16 08:12:38

　　Federal loan limits
　　Marja Lopees of Burbank is a few years out of school and makes about $70,000 a year as a lawyer. But she racked up $196,253 in debt and says her student loan payments swallow 40% of her earnings.
　　Lopees turned to private loans when she hit borrowing limits imposed by the federal student loan program. Now she has $88,303 in private loans that charge an interest rate of 8.84%. The payment on that loan is her second-largest monthly expense, after rent.
　　"I’m making interest-only payments on one of the loans, and still the payments keep going up," she said. "It’s just overwhelming."
　　When she just makes minimum payments, her debt and rent consume 60% of her after-tax income. That’s before she pays for food, clothing, utilities, and gasoline or saves for long-term goals.
　　"No one tells you to be careful of taking on too much debt when you’re in school," she said. "It’s just the opposite. They just keep giving you loans and saying, ’Don’t worry about it. You’re going to be a lawyer. It’s no big deal.’ "
　　Kristof is a freelance writer.

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Studentloansturnintocrushingburdenforunwaryborrowers2