Pulling together one dollar a month extra (204 dollars total over the life of the loan) and paying it to principal saves me 2 months of payoff, netting a $710.13 savings. Just for squeezing out four quarters a month. Noodling up an extra 50 bucks a month makes a huge difference. I intend to pay this off by September 1, 2008 and the journey so far has been intense. But even if I don’t make it, I will be leaps ahead, and will save thousands of dollars for the effort. Makes doing without take out coffee, selling off old textbooks, and scrounging change worth it.

Check out her site for information on calculators and the decreased life of her loan based on even 1 dollar more per month.

Micropay Your Way To Student Loan Freedom

A recent follow up on Micropayments to Sallie Mae

Good Advice and Humor:

“Don’t be short-sighted. Consolidating your student loans will lengthen your repayment term, creating a long-term relationship with your lender, so it’s important to also consider lenders that can offer flexible repayment options, life-of-loan servicing, and a single point of contact,” says Scherschel.

Good

• Warning students about bad lenders
• Noting that a consolidation lengthens the payment period

Bad

• Sallie Mae is as flexible as an arthritic osteoporothis ridden old man.
• Sallie Mae will provide life of loan servicing, they will have your loan until you die.
• Sallie Mae cannot provide a single point of contact, each call no matter if it is your 1st or 50th regarding the same problem nets you another person with no vested interest in solving your problem.  From our experience it is ussualy someone who has half a grasp on the english language as well, which doesn’t work when your job is to deal with angry english speaking student loan borrowers.

Sallie Mae Cautions Students about Lender Practices, Irony not Lost

One great part of the private loan consolidation with Wells Fargo is that you can choose to have up to 2 co signers which can help you overcome the debt to income ratio restriction which we had run into on prior occasions.

Stay tuned later this week for Open Letters to the CEOs of American Education Services and Sallie Mae regarding our federal loans.

The suit alleges that Arrow engaged in such practices as trying to collect debts that have been discharged in bankruptcy, using profanity, and withdrawing money without authorization from bank accounts.

Arrow Financial Services recently received a $125,000 fine in Minnesota for the same practices. It is not clear from the article whether or not Arrow was collecting on Student loans or if it was simply aggressively trying to collect on other forms of consumer debt. Arrow Financial services describes itself as:

Arrow Financial Services LLC is part of the Sallie Mae (NYSE: SLM) family of companies and a nationally recognized leader in the receivables management industry with over $16 billion in consumer debt under management. We offer a full range of recovery solutions across a variety of asset classes including credit cards, student loans, utility, telecommunication, retail and automotive. Our team specializes in balancing courteous and professional customer service with the goal of maximizing recovery on managed accounts. Arrow’s unique combination of experience, reputation and world class analytical capability sets us apart from others in our industry.

It is important to remember your rights when a debt collector comes calling. The consumerist has a good collection of your rights.

Fair Debt Collection Practices Act

Dealing with Debt Collectors – Consumerist

Chicago Sun Times – Sallie Mae company charged with aggressive collection practices

Arrow Financial Services – AKA In UR bank account takin’ UR Money

Get your friends to text COLLEGE to 35328 to urge Congress to cut college loan interest rates, increase Pell Grants, end the raid on student aid, and work to make college more affordable.

The Bill passed in the House 356 votes to 71 votes. All of the “nay” votes were cast by Republicans. The bill still needs support to get through the Senate and Signed by the president.

The Young Democrats of America has a good repository of information on Bill HR 5 and the savings it will amount to for students based on their state and their loan year.

Young Democrats of America: The College Student Relief Act of 2007

The article contains information on the amount of interest that Sallie Mae and other lenders are guaranteed by the government.

Currently the government guarantees lenders a 7.72-percent rate of return. If the bill becomes law, that rate will drop to 7.62, which will be a relatively modest blow to the lending industry’s already excessive profits. But that hasn’t stopped them from crying bloody murder.

I wish the article contained the information to support these numbers and explained the rates better, however the way I am interpreting this is that even if you lock in a 5% interest rate with Sallie Mae the government will kick in another 2.72% in interest. Why the government is paying a subsidy to a company that manages 142 Billion dollars in loans and turned a profit of 342 Million in the 4th quarter of 2006 (A profit which is 96% lower than last 4th quarter) is beyond me.

Sallie Mae had the following comment on the interest rate reduction

Tom Joyce, a spokesman for Sallie Mae, the student loan organization, said such cuts could impact the services and benefits students receive. (Student Loan Info for Parents)

I realize I may be all across the board here but It is ludicrous for companies such as Sallie Mae to receive government subsidies while making copious amounts of money and providing poor customer service and high interest rates to its consumers.

What are your thoughts on the interest rate reduction, student loan companies and government subsidies for profit bearing companies?

The Daily Texan: Student Loan Interest Rate Bill Info