Seven borrowers who had been paying their Sallie Mae student loans on time for years were unexpectedly threatened with asset seizures after a Sallie Mae contractor demanded they immediately repay tens of thousands of dollars simply because a family member had died.
Since an April report by the CFPB highlighted the troubling practice, the financial services industry has spent four weeks on the defensive, arguing that borrowers who face the demands are often delinquent on their debts, or are just out of college and thus unable to shoulder the burden.
What’s more, they argue, borrowers should’ve known they could face auto defaults because it’s detailed in their loan contracts.
- Private Student Loan Borrowers Face “Auto-Default” When Co-Signer Dies Or Goes Into Bankruptcy
- CFPB Helping Student Loan Disputes
- Student Loans: High School Seniors and Parents Need To Beware Of Draconian Ramifications
- Connecticut Named ‘Sinkhole State’ By Accounting Institute
- Another Way Student Loans Are Like Mortgages: Subpar Servicing
- Interest Rates On Student Loans Double