Updating a blog post we brought you earlier this year, Sallie Mae has agreed to pay nearly $100 million in fines to federal regulators for overcharging military members with higher interest rates and late fees on government student loans.
According to CNN, the loans reportedly go back as far as 2005. Federal laws require that all student loans for active duty military members be capped at six percent interest.
Sallie Mae reportedly failed to discount its interest rates to military members—additionally, the lender made it harder for some people to prove that they may qualify for lower rates.
“This type of conduct isn’t just inappropriate, it’s inexcusable and will not be tolerated,” U.S. Attorney General Eric Holder said in a statement.
According to CNN, $60 million of the fines involved in the settlement will be slated to reimburse military members.
“We have streamlined the process so (military service members) can receive the loan interest rate without having to provide paperwork,” Secretary of Education Arne Duncan said, according to CNN. “It puts the onus on Sallie Mae instead of the soldier.”
Sallie Mae released a statement following the announcement of the settlement, apologizing:
“We regret any inconvenience or hardship that our customers may have experienced,” the lender said in a statement. “We appreciate the service of the men and women who safeguard our freedom, and we are committed to meeting their needs.”
What Can I Do If I Cannot Afford to Pay My Student Loans?
It is disgusting that Sallie Mae would attempt to manipulate interest rates for the men and women protecting this country.
As many students are graduating from college this month with outstanding student loan balances, it should be noted that this type of debt now surpasses credit card debt in this country. The Associated Press reported earlier this year that the average four-year graduate now accumulates $26,000 to $29,000 in loans, and some leave college with six figures worth of debt.
It should be noted that if you are under water financially, you might want to attempt to discharge student loans through bankruptcy. However, you may have to show an extreme financial hardship in order to do this. It should be noted, however, that recently courts have statistically been more lenient when it comes to discharging student loans through bankruptcy.
According to a Huffington Post article, in 2012, data showed that in bankruptcy cases, 47 percent of federal student loans were discharged in full, 21 percent resulted in a better payment and 12 percent settled for less than was due.
Even if you cannot discharge your student loans through bankruptcy, through a Chapter 7 filing, you can discharge credit card debt, medical bills and unsecured personal loans, which could help free up money to make student loan payments easier.
Do not become a slave to your student loans. You can visit our Facebook page, our LinkedIn page, our Google+ page and our Twitter page for more information about our bankruptcy services. We are located near the Navy Memorial/Metro Station.
Law Firm of Kevin D. Judd– Maryland and Washington DC bankruptcy attorney
Judd’s Judgment: American student loan debt now sits at more than $1.2 trillion, as nearly 20 million people attend college each year.