Senator Ted Kennedy was a great man who fought hard for every college student in America! He battled with companies like Sallie Mae, who make billions of dollars in profits every year by taking advantage of poor students.
He believed in the right to a college education and the right to be able to afford that education. He was always the man I wanted in my corner!
I too have fought against the corruption behind student loan lender Sallie Mae, which is the United States’ largest student loan company. The interest they add to their loans is insurmountable, as the students crumble they become billionaires. For them to say they are “champions of higher education,” is a lie.
Senator Kennedy you pioneered this movement for student loan justice and all your hard work will one day prevail, and never be forgotten!
Sincerely,
Michelle Misiaszek
Statement of Senator Kennedy on Sallie Mae’s letter to college financial aid professionals
“It’s hardly surprising that Sallie Mae would take a proposal intended to protect students and spin it as an attack on college financial aid professionals. In reality, financial aid administrators and students are the ones being attacked by money lenders aggressively marketing private loans that may not offer the lowest interest rates for students.
This onslaught of pressure is exactly why I’ve proposed the Student Loan Sunshine Act. Far from being “ill-conceived” or “unwarranted,” the Act responds to the growing number of documented cases in which private lenders pull out all the stops to pitch their wares to woo colleges and gouge students. The vast majority of financial aid administrators are doing all they can to make sure that students obtain the funds they need to pay for college. The problem is the big lenders who put profits ahead of students, not the college administrators.” – Senator Kennedy.
Kennedy targets Sallie Mae’s role
“The student loan program works brilliantly for the banks, but not for the students,” Sen. Edward M. Kennedy (D-Mass.) said in a speech on the Senate floor.
The Student Loan Scandal - Senator Kennedy characterized the student loan system as one that “squanders billions each year to provide corporate welfare to big lenders, rather than serving the best interests of our students.
Senator Kennedy leads Congress in crackdown on student loan scandal
“Banks like Nelnet and Sallie Mae can still drive right through, collecting outrageous profits at the expense of students and taxpayers,” said Senator Kennedy.
Senator Kennedy questions collection tactics
Kennedy says his office has acquired information suggesting that Sallie Mae may have implemented the following tactics in its collection process:
- Attempting to collect debts not owed.
- Firing employees who attempt to help borrowers obtain correct information about their loan status.
- Instructing employees to give borrowers “the run around” rather than providing them with correct information on their loan status.
- Intentionally sending loan-payment notices to an incorrect address to force a borrower’s account into default.
- Telling a borrower’s spouse that the borrower would go to jail if he didn’t pay—a blatantly false assertion.
- Putting a borrower who lost his home in a natural disaster into default, adding substantial default and collection fees to his loan balance, taking tax refunds, and garnishing his wages—all in violation of guidance from the Secretary of Education.
- Regularly calling borrowers at work after being instructed to stop.
- Using abusive and profane language to intimidate borrowers.
In his letter to Tim Fitzpatrick, CEO of Sallie Mae, Kennedy wrote, “I am concerned that several private lenders may be engaging in harsh and inappropriate tactics with regard to borrowers whose payments are overdue.”
Kennedy called for Sallie Mae investigation into student loan errors
In 2002, a billing error performed by Sallie Mae led to dramatic increases in monthly payments, and forced many students to default on their student loans. In response, Senator Kennedy, joined by a bipartisan group of senators and representatives, sent a letter to Education Secretary Rod Paige requesting an investigation into the billing practices of the multibillion dollar company. Senator Kennedy said that, depending on the outcome of the investigation, Sallie Mae should be responsible for compensating any student loan defaults that resulted from the error.