Thank you to the CFPB and Elizabeth Warren

As I wrote last week’s post about the new ombudsman at the Consumer Financial Protection Bureau, I was submitting my complaint against Wells Fargo Education Financial Services. Yesterday, I received an email from a “research and remediation analyst” at Wells Fargo EFS thanking me for my complaint to the CFPB, and offering to work with me on a workable repayment plan.

After figuring out what payment I can afford to make to Wells Fargo EFS each month, they accepted my offer. That simple arrangement could have been made over a year ago, but they refused to work with me until the CFPB got involved.

I have to send a huge thank you to the Consumer Financial Protection Bureau for the creation of the ombudsman for private student loans. I’ve tried everything I know to do for over a year now, and within a few days of the CFPB’s involvement, Wells Fargo is now willing to work with me.

After all the heartache, the job hunts, the packing, moving, and unpacking, contacting my congressmen, going on national radio, the letter writing, financial and legal consultations, etc., they’re finally being responsive. If they had simply done a year ago what they did today, this whole mess could have been avoided. Now I get to try and repair the damage that has been done to my credit since this situation began. Any tips on that are welcome.

Another big thank you goes to Elizabeth Warren for her efforts to create the CFPB. Without her leadership and persistence, the CFPB would not exist today, and I wouldn’t have been able to get Wells Fargo EFS to agree to any terms on my own. Thank you, thank you, thank you.

I know this isn’t over–far from it, I know–but for now, I’m able to breathe a sigh of relief.

Refresh. Recharge. Reboot.

Private Student Loan Ombudsman

I just saw the news a few days ago that the Consumer Financial Protection Bureau has officially launched its complaint system for private student loans. Prior to a few weeks ago, if you had problems with your private lenders, you had no place to go. Now you do! If you have private student loans and your lenders have been unreasonable or treating you unfairly, use this contact form!

Reprehensible Wells Fargo

I read an article at Huffington Post this morning about a federal bankruptcy judge in Louisiana who ordered Wells Fargo to pay $3.1 million dollars to a homeowner for their “highly reprehensible” actions against that homeowner.

Read the article in full here.

The article got me thinking about the many people who’ve shared their own horror stories of dealing with Wells Fargo, and the conversation I had with the Wells Fargo representative named Cody who told me I should be thankful my student loan through them isn’t a mortgage because they would already have taken my home by now.

That in itself speaks volumes, and is a confirmation of the stories friends and relatives have shared with me. It also illustrates a pattern of abuse by Wells Fargo (see below). Even worse, when I met with representatives from my Congressmen about my problems with Wells Fargo, one said, “Wells Fargo really shouldn’t be in the business of lending money to anyone, since they repeatedly show no interest in helping their own customers”. This representative then shared that they (Congress, a broader “they”) receive more complaints about Wells Fargo each year than any other bank or loan company. Considering that the representatives for my area are some of the most conservative in the country, it was quite surprising to hear those statements from their offices.

I decided to see what other people across the country have to say about their experiences with Wells Fargo. A simple search returned thousands of results, a vast majority of which were extremely negative. Just browse the Wells Fargo page at Consumer Affairs to see for yourself. Of the 686 responses on that page, 81% rated their experience the lowest possible (1 star of 5). Another 11% rated it 2 stars. That’s a huge disapproval rate. Granted, it’s a website that caters mostly to complaints, so those scores are somewhat expected, but dramatic nonetheless. I encourage you to read through some of the stories people shared.

Back to the search results. Scroll through the 28 pages of complaints at the Complaint Board. Or visit the Customer Service Scoreboard, where Wells Fargo currently has 784 negative reviews and only 22 positive reviews.

Now, these are the ratings for Wells Fargo as a whole. How does Wells Fargo Education Financial Services, the division responsible for student loans, stack up? Back at Consumer Affairs, all 48 reviewers have given them the lowest score possible (again, 1 out of 5 stars possible). Many of the experiences shared are similar in nature to mine. Here’s one that really struck a chord:

Mike of La Crosse, WI on March 29, 2010

I’ve had enough harassment. My son has fallen behind in his payments on a student loan I co-signed. We have both contacted Wells Fargo on several occasions explaining our situation looking for options. After graduating from college, he has tirelessly interviewed for jobs. He currently is working for Target Corporation, part-time, hoping to go full-time soon. In the meantime, Wells Fargo calls me 4-5 times a day to inform me that he is late on his payment.

I try to explain that we have talked to a Wells Fargo representative and as soon as he gets a paycheck, he pays on the loan. I have put payments on my credit card at times to help get him caught up. I’m also paying on student loans. Finally last week I told the representative, this is enough. I’m tired of them calling. We’re doing our best to make payments. The representative got extremely rude telling me there were no other options, nor did she care about our situation. She went on to threaten me with a lien on my house and garnishing my wages.

The real irony is that I couldn’t make a payment with my credit card because Wells Fargo lowered my credit limit because of the late payments on the student loan…so I couldn’t pay if I wanted to. My credit card is maxed out. When I suggested that other companies offer payment options, she replied, “We are not other companies!”. I have since moved all of my accounts out of Wells Fargo including my home mortgage. It almost appears they are hoping we fail. When I asked if she preferred if he defaulted on his loan, she once again threatened me. This has been going on for months even though he’s only behind by $750.00.

Everyone getting screwed over by Wells Fargo needs to write their congresspeople! It’s great to share your stories online but in order to gain traction, all of us need to band together and get in touch with legislators. Alone, there’s not much we can do, but working together, and with our representatives, we may be able to accomplish something. Not only for ourselves, but to prevent these types of things from happening in the future.

Gracias, Discover Student Loans

A while back, I posted about Discover Student Loans offering me a 2% graduation reward on my account. Well, I checked my account today and noticed my current balance was lower than I thought it should be. I looked at my account history and they applied that 2% reduction in my principal within two weeks of my accepting it!

So I’m sending my thanks to Discover Student Loans. They’re operating in a way that Wells Fargo only wishes they could. They actually value their customers and treat them right.

Federal Loan Consolidation Progress

Our records show that due to your recent consolidation loan, the account listed above is paid in full…We appreciate having been able to serve you and hope that your educational experience has been a good one.

What an excellent way to start out my day! It appears that all my federal loans have been successfully consolidated. That means I’ll immediately see lower payments and I’ll have 7 fewer open accounts. I’ve got to admit, it feels good! Hopefully, the lower monthly payment (yes, just one payment!) combined with having so many fewer open accounts and marking the other loans as paid in full and in good standing will start to help my credit rating.

The situation with Wells Fargo is still basically at a standstill. My congressman’s staff keeps playing phone tag with Wells Fargo, and I actually received a phone call from the executive director of the Wells Fargo Education Financial Services division a few weeks ago, letting me know they had received my letter and are looking into my account. I addressed the letter to the Director herself this time, instead of sending it to the anonymous CSR named Cody. The last time I talked with him, he said they hadn’t received any of my letters, so I thought I’d try someone higher up. Nothing is resolved yet, but I’ve at least gotten some people’s attention. Hanging on to hope.

Student Loan Forgiveness Act of 2012

Earlier today, I signed a petition for the passage of the Student Loan Forgiveness Act of 2012, and I’d like to encourage you to do the same. The bill, introduced by Michigan representative Hansen Clarke, is designed to help struggling student borrowers.

Here are some key provisions of H.B. 4170:

o The bill would create a new “10-10 standard” for student loan forgiveness. If you make payments equal to 10% of your discretionary income for 10 years, your remaining federal student loan debt would be forgiven. If you have already been making payments on your student loans, your repayment period would likely be shorter than 10 years. The amount you have already paid on
your student loans over the past decade would be credited toward meeting the
requirement for forgiveness.

o The bill would ensure low interest rates on federal student loans by capping them at 3.4%.

o The bill would reward graduates for entering public service professions like teaching and firefighting. It would also provide incentives for medical professionals to work in under-served communities. It would reduce the Public Service Loan Forgiveness requirement to 5 years from its current 10 years.

Most importantly to me,

o The bill would allow existing borrowers whose educational loan debt exceeds their income to break free from the crushing interest rates of private loans by converting their private loan debt into federal Direct Loans, then enrolling their new federal loans into the 10/10 program.

I can’t begin to tell you how much that would help me (and thousands of others like me). I hope you’ll take a minute and add your name to the signon.org petition urging the passage of this bill.

Thanks, Wells Fargo

I spoke with Cody from Wells Fargo today, who said I should be grateful my student loan isn’t a car loan or mortgage because they would have already taken my house by now. Grateful.

When I asked to speak to a supervisor he denied me three times before transferring me to Scott Miller. Mr. Miller said I have only three options: 1) pay the settlement amount ($25,500) now; 2) if I can’t, Wells Fargo will pursue litigation and garnishment of my and my dad’s wages (and I’d be responsible for all of their court and attorney fees); or 3) Wells Fargo will hand my account over to a collections agency, whose repayment terms wouldn’t be, “nearly as agreeable as Wells Fargo’s” (his words).

And I should be grateful.

Problems with loan companies? Contact your representatives!

I received a phone call this morning from Congressman John Sullivan’s office with some possibly good news. His staff is sending me a few forms to fill out and they’re going to investigate further into my situation, hopefully resulting in Wells Fargo actually working with me on a payment plan.

Nothing is certain, but I’ve got my fingers crossed. For anyone having issues with their student loan companies, contact your representatives!

Find your elected officials here.

Marketplace

The episode of Marketplace Money in which I make an appearance aired yesterday. Of the 15-20 minutes we spoke on the phone, only about 5 minutes of it made the air. If you want to listen, click here and fast forward to about the 16 minute mark (requires iTunes) or click here to read the article and listen in your browser. My segment is called “The Perils of Private Student Debt”.

I hope a lot of parents are listening in this week!

Weekly Student Loan Recap

Just a quick update about what’s happened in the past week… I met with the banker last Thursday, and though we spent nearly two hours discussing what limited options I have and pouring over numbers, it appeared to him that there’s little I can do. I did learn a few helpful strategies for paying off my loans more quickly. I’ll post those here soon. Not the outcome I was hoping for, but it was positive nonetheless.

The next day, I did an interview with Tess Vigeland and Liz Watson on MarketPlace Money. It began quite awkwardly, since I ended up having to do the interview in front of all my coworkers, so I stumbled through the first part. Their confidence that they could help was high in the beginning and very low by the end of our 10+ minute conversation. With each detail they learned about the situation, the more grim the outlook became. I really hope parents of college-bound students listen to the show, so they can hear what not to do. I knew the interview was going downhill after the third time Tess said, “Oh brother” or “Oh boy”. But I’m glad to get the message out about student loans.

Since then, I’ve also written letters to Senators Tom Coburn and Jim Inhofe, Representative John Sullivan, and the Consumer Financial Protection Bureau asking for their assistance, and a very wise colleague suggested I write to the Oklahoma Attorney General and Oklahoma State Banking Department. I’ll be doing that this weekend.

Tonight, I learned some very good news about the Consumer Financial Protection Bureau (CFPB), the federal department created by Elizabeth Warren and President Obama. The CFPB is currently in the process of creating its own Ombudsman program for private student loans, which will act as a counterpart to the Department of Education’s Ombudsman program for federal loans. Both will essentially look at your particular case and negotiate a deal with lenders on your behalf, possibly avoiding situations like the one I’m in now. While that won’t help me now, it will definitely help in the future, and I’m sure it will help thousands upon thousands of student borrowers across the country.