Sallie Mae’s Incompetence

Starting off with some background. My wife and I both attended a small liberal arts university in Ohio, we graduated with a significant amount of loans despite parental help and working while we attended. Suffice to say we had maxed out our federal loans and extended into the realm of private education loans. The purpose of this blog however is to deal with the federal loans and the problems we have had consolidating all of them.

If there is one piece of advice I have for graduates regarding loans and graduation it would be to consolidate your loans as soon as you get moved into your new apartment or back to your parents. In order to get eh best rate you need to consolidate before June 3oth of your graduation year. Unfortunately we did not meet this deadline. However we could still lock in a rate before the next leap in federal loan interest rates.

Flash Forward to October of 2005, our loans have entered repayment and we had recently filed our paperwork for loan consolidation. In between the time we filed our consolidation paperwork and the time that our consolidator (American Education Services) was ready to send the payoff amounts Sallie Mae purchased three of my wife’s federal loans. This shouldn’t have been a problem, however you can easily tell by the title of this blog that it is indeed a problem. At the time these loans were worth roughly $6,500.

We didn’t find out about this problem until Late December 2005 when the rest of our federal loans were consolidated and we received our new documentation and monthly payment information. We also saw the federal loans appear in my wife’s online account with Sallie Mae, who unfortunately hold her private education loans as well.

Well there is the setting roughly a year ago. All of our federal loans other than the three Sallie Mae had purchased were consolidated with AES, which should have given us one vendor and an affordable monthly payment. Stay tuned for the events which have occurred over the past year.