Unemployment Penalty Applied to Student Loans by Sallie Mae

Student loan giant Sallie Mae defended itself from a popular campaign on Change.org demanding the company stop charging jobless borrowers a $50 fee on their student loans, drawing a sharp response from the campaign’s creator Stef Gray. More than 60,000 people have joined the campaign since its launch.

In Sallie Mae’s response to Gray’s petition, spokesperson Patricia Christel described the fee as “a good faith deposit that acknowledges the importance of and commitment to resuming payments in the future.”

“Sallie Mae’s characterization of this onerous fee as a ‘good-faith deposit’ is simply unbelievable,” said Gray, a recent graduate who took out private student loans through Sallie Mae. “When I pay a deposit on my apartment, I get my money back at the end of the lease. If this were a ‘deposit,’ borrowers would either get their fees back at the end of the forbearance or the money would be applied to the loan’s balance. Neither of these is true. Meanwhile, Sallie Mae continues to add interest to the loans – in my case, more than $1,000 every three months I can’t find work,” she continued. “This fee is about one thing, padding Sallie Mae’s profits, and for them to pretend otherwise is galling.”

Members of the student debt movement quickly rallied around Gray’s response via social media, using Twitter and Facebook to call on Sallie Mae to end the $50 fee per loan for a 3-month forbearance period, a fee Gray calls an ‘unemployment penalty.’ “We can’t let Sallie Mae get away with this kind of corporate nothing-speak,” Gray said of the social media response. “The thousands of borrowers standing with me to fight for change want real answers and real change, and we want it now.”