College graduate fights back against loan giant
Published: Monday, March 5, 2012
Updated: Monday, August 27, 2012 16:08
Since graduating from Hunter College with honors almost two years ago, Stefanie Gray, 23, has been on a mission.
Feb. 2, she marched to the Washington D.C. office of private loan lender Sally Mae with over 76,000 signatures. Her petition was asking to eliminate a $150 fee for delaying her payments because she is unemployed. Sally Mae listened … sort of.
"[Student loan] lenders have policies that make mobsters jealous," Gray said.
Known as forbearance, Gray was being charged $150 every three months because she did not have a job to pay off her student loans. Consolidating her loans was not an option. None of her forbearance fees went towards paying down her loan, but instead were pocketed by the loan giant.
Meanwhile, she continued to pay a 9.75 percent interest rate on her loans. The rate was so high because she did not have someone to co-sign on her loans.
"It's been nothing short of insane," said Gray. "If you default on loans, you may never be able to buy a home, or get a car, or even a good job."
Less than three hours after Gray delivered her petition to Sally Mae CEO Albert Lord, the forbearance policy was changed so that the fee would go towards paying off the loan, granted she has already made six payments on time.
"They will get the money any way they can, whether it's by garnishing your wages or disability," said Gray.
Gray has rallied support through social media and an online petition on change.org.
Still unemployed and living in New York, Gray will continue her fight against Sally Mae until the forbearance fee is dropped altogether. She says that companies like Sally Mae "double-dip" when they collect forbearance fees and interest.
"I'm trying to change the national dialogue of student debt," said Gray. "I want to shift it away from victim-blaming."
While Gray did acquire some federal loans, which do provide a safety net for those unable to make payments, she needed additional support from private lenders. Gray said her school suggested Sally Mae for loans.
"My school pushed for private loans," said Gray. "They painted Sally Mae as a non-profit organization. It's a very toxic relationship."
Gray points to partnerships between schools and private loan lenders such as Sally Mae. Last year, the student debt in the U.S. surpassed $1 trillion, exceeding the total amount of credit card debt in the country, according to the Federal Reserve Bank of New York.
"It's already a crisis," said Gray. "It's going to slowly suffocate people who are trying to start a life."
Earlier this year, President Barack Obama made a plea to colleges and universities to make college more affordable in exchange for greater financial aid to the school. The move falls short of what Gray is fighting for.
"Proposals to solve this problem only focus on federal loans and apply to the classes of 2018 and 2019," said Gray. "What about the people who are defaulting right now?"
Gray has some solutions of her own, and suggestions for students looking for financial aid.
"Student loan forgiveness would be a great way to stimulate the economy," said Gray. "The money would not go to the lenders."
Gray advises students to avoid private loans if they can, and to research the lenders. She also continues to ask for support and signatures to her online petition.
"We all want to move out of our parent's basement," said Gray.