Sweeping the Student Loan Scandal Under the Rug

I am and have been outraged that the money collected by Cuomo's office for violations that harmed FORMER AND CURRENT STUDENT LOAN HOLDERS has been used for FUTURE STUDENT LOAN HOLDERS. Just like a typical class action lawsuit where the lawyers get the money and the parties harmed get a $1.00 off coupon for a future purchase, this settlement should have gone to the actual people harmed to reduce their usury loans. While it is a nobel and good idea to educate future students about the perils of student loans, and particularly private student loans, and I applaud that idea, the money for it should not come from this fund. This fund should be used to reimburse the students actually harmed. I submit that the many thousands of students who this affects should ban together and insist that the money be used to correct the harm done to them. Why is this okay with the victims? If it is not, then call, write and e-mail Cuomo and tell him that you want the money used for the correct purpose-------making right what the lenders and colleges did wrong to the actual people they harmed. Until this large group, student loan victims, bans together and stands up and insists that things change, nothing will change. Isn't it about time to have a unified voice??????

Wow. First the predatory trade schools of the 1980s, followed by the confusion and the removal of consumer protections from all student loans in the 1990s to schools being paid to herd students to specific lenders in the 2000s.

30 years of exploiting students. Is that really what the original Higher Education act intended? No. I agree with Higher Ed Watch when they report that the schools settled with NY AG Andrew Cuomo rather than go to court over their actions was due to the fact that they KNEW they could not defend them! But what about the students who were victimized by the actions of those schools? Is there any investigation of the effects those proceedings had on students? Could they have obtained better rates on their loans, cheaper loans, or a better over all deal, had they been able to make fully informed choices, instead of being steared to a particular lender who was giving kickbacks to the colleges?

Once again we see the student loan industry EXPLOITING students, instead of helping them. This is NOT what the intention of the original Higher Education law was about.

And contrary to Barrak Obama's plan to make government the sole provider for all loans, I think its time for government to remove itself entirely from the student loan industry.

No more loans. No more subsidies to lending institutions. No more guarantees.

I believe government involvement in higher education student loans, has allowed the service companies and loan companies to exploit the students. And its high time we stop allowing these companies to victimize the students by exploiting them.

I am in complete agreement with mam2222, above. The chump change fines that Cuomo's office levied against billion-dollar, publicly traded companies like SLM and NNI were a finger in the dyke and did nothing to help past victims of student debt abuse.

Moreover, I have a defaulted Perkins loan with the State University of New York, where I earned my bachelor's degree with honors, with an original principal of $2,200. When I called Cuomo's office (the dedicated "Student Recoveries Unit") in Albany to discuss a settlement somewhere between $2,200 and the more-than-tripled $7,400 balance (including "fees and costs"), the response was to ignore me and to send a questionnaire about my earnings and employment to my office. An attorney friend who tried to intercede on my behalf related that he was told by Cuomo's office that my account was "red flagged for non-cooperation."

A year and $4,000 in payments and a seized tax refund later, I still owe over $4,000. I.E. I paid my loan off twice and I still owe Andrew Cuomo's office twice what I borrowed. If anyone would care to explain to me how this behavior is any different than that of SLM, NNI, First Marblehead, et al., please drop me a line.

Jason Paskowitz -- if SUNY, or Sallie Mae, or National Ed. Loan Network violated a law in dealing with your accounts, then file charges against them and bring them to court. Oh, wait, if that were the case you would already have done so and would not be whining on these forums. Instead, everyone here clearly recognizes you as one of Alan Collinge's minions, or perhaps even an assumed identity which Alan uses to post horror stories without any basis of fact.

Ex Loan Huckster,

Are you aware that Congress has given unheard of rights and powers to the private for-profit corporation, Sallie Mae, and their fellow peers? Even though Congress, through the payoff system called lobbying and campaign contributions, allowed things that, if they were aware of the particulars, anyone would deem illegal, these companies have, in my opinion, gotten even greedier. They use, in my view, fuzzy math and skirt the collections laws, the deferment rules, etc. If this were any other loan in America, you better believe citizens would not permit this. Why it's okay to take advantage of young adults just starting out is beyond me. I cannot figure out why it would be okay with anyone. My opinion is that, not only have the companies committed crimes, I feel Congress is criminally negligent in their actions regarding student loans and that they should also be held accountable both on a criminal level and a personal monetary level. Where are the student loan victims that are now accountants and lawyers? Why don't you look into the fuzzy math or the stretching of the rules like an unusually high number of forbearance and deferment paperwork that just seems to get lost and lots of penalties and interest tick as a result. Could it be that these companies are just so unlucky with the mail system that they don't get so much of their paperwork???? I suggest that all the student loan victims ban together and start looking into this matter because it sure won't happen from the officials. Ex Loan Huckster, there are millions of horror stories regarding this issue, whether you believe it or not. And for the record, most of these victims are living hand to mouth and cannot afford to hire a lawyer, thanks to Congress and companies like the ones you are defending and probably worked for. You try suing a company with unlimited funds when you are living at home because you have usury student loans to pay. You know what they say, if you're not part of the solution, you are part of the problem..........

"in my opinion..." "in my view..." "My opinion is..."

mam2222 -- the world that I live in operates on facts, objective thought and laws, not emotion and feelings. The previous poster indicted the SUNY System and by correlation the NYS AG office and ultimately the Governor in a diatribe about unfair Perkins loan collections practice. In case you are not familiar with Perkins, it is a now defunct piece of Title IV funding that was administered by (non-profit) schools.

The law provides for supplemental fees when the borrower fails to comply with the terms and conditions (T&C in industry lingo). If you don't like the T&C of various debt instruments, be they student loans, credit cards or mortgages, then call your representative and try and have them changed. But don't throw out emotional rants about unfair practice when companies play by the rules. Without rules to address delinquent debtor behavior, there would be no consumer lending at all and then what would millions of Americans do? Our economy is driven by consumer debt and if the lenders don't have recourse to cover losses, they will stop lending.

Mr. Paskowitz:

We all think it is you that needs to refrain from ad hominem attacks (c.f. cubicle and fake law school references). Why are you so determined to learn my or other posters' identities? Perhaps the same reason 90% of participants on these blogs choose to remain anonymous, i.e. to avoid suffering retribution for expressing opinions. I simply observe and flag hypocrisy or faulty argument (a.k.a. BS). Prior to the credit market collapse I enjoyed a mid-six figure salary helping to prop up the FFELP cartel but I often joked with friends that I was among the least successful of my peer group and college buddies. The fact is, my wife and I diligently paid off in excess of $50K in combined student loan debt, often making sacrifices in housing, attire and entertainment areas to do so, but we followed the rules as set forth and had no problem. Alan Collinge has a database of maybe 2,000 cases such as yours out of ten million or more FFELP borrowers that the system worked for because they honored their commitments. My question to you is, if your legal credentials are so impeccable, why did you have trouble paying off a $2,200 student loan?