Sallie Mae Stands by Forbearance Fee
It appears the thousands of petition signers asking Sallie Mae to stop charging student loan forbearance fees to unemployed college graduates are out of luck.
Feb 3, 2012: Sallie Mae Compromises on Forbearance Fee
In a statement to Credit Union Times, the education financing company explained the logic behind the fee and did not indicate any plans to waive it for unemployed borrowers.
“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,” Sallie Mae spokesperson Patricia Christel said.
Stef Gray of Brooklyn, N.Y., launched the campaign through online advocacy platform Change.org. She stated that unemployed college graduates can’t afford Sallie Mae’s fee of $50 for every three-month delayed payment time period. According to the site, more than 70,000 people have signed her online petition.
Sallie Mae also stated that just 4% of its loans are in forbearance and that the company encourages borrowers to choose a more affordable, modified repayment plan before resorting to forbearance.
“Oftentimes people who initially ask to postpone their payments find other solutions because they realize that postponement of payments increases the amount of interest they will ultimately pay,” Sallie Mae said.
“For our customers experiencing severe financial difficulty (those who are seriously past due), we encourage customers to first take advantage of a modified repayment plan at no cost,” the company added. “For those customers who request forbearance to stop making payments but keep their account in an approved status, the fee is $50 per loan, up to a maximum of $150. The time period is typically three months.”
More than 500 credit unions refer members to Sallie Mae student loans through the company’s referral program, Smart Option Student Loan.