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.

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.

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.


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.

Positive Snowball Effect

To add on the good news from the past week and a half, I received a letter yesterday from one of my lenders, Discover Student Loans, congratulating me on my graduation. That’s nice, if late, but the really nice gesture is that they offer a graduation reward in the form of a 2% reduction in my principal balance.

They even gave me the option of depositing it into my checking account or applying it directly to the loan balance. I applied it to the balance. The loan is pretty substantial, too, which means the benefit to me is pretty big: $440! Excellent news, indeed. So, thanks to Discover! (I guess it really does pay to Discover.) Wells Fargo should take a page from Discover’s playbook.

Today, I spoke with a producer from Marketplace Money and told her my student loan story. She wasn’t sure if they could help, especially since I’d already spoken to an attorney who couldn’t offer any advice, but checked with a resident expert, and it turns out they might be able to help. We set up an interview for this Friday and hopefully, they’ll be able to shed some light on what my options are. I’ve got my fingers crossed!

I’m really liking this positive momentum, and I hope it continues! It’s a welcome change.

Radio Help

I got a response from the folks at Marketplace Money about my student loan story. They’ve invited me to chat on the phone with them this afternoon, so hopefully I get some good answers to my student loan situation. I’ll be sure to post the results of that conversation. Let’s get this thing resolved.

Upward Momentum

This week has been one of surprising, upward momentum that I hope is an indication that I’m turning a new page in my life. First, I have to thank all of my amazing friends and family members that responded to my last post about my student loan situation. With everyone’s help in spreading the word, there have been some promising developments. That’s not to say the entire situation is resolved, but it’s getting better.

A very good friend’s mom let me know about a new federal student loan consolidation program that’s only available from January to June of this year. I doubted my eligibility since I had (unsuccessfully) tried to consolidate my federal loans before, but filled out the application anyway. It’s a lengthy application, but it turns out I’m actually eligible for it! I’ve sent in my paperwork and now I’m just waiting to hear whether it’s approved. If approved, I’ll be able to consolidate six of my loans from three different lenders into one, lower, monthly payment. It’s estimated to save me about $100 a month. It can’t help with my private student loans, but it’s a huge step in the right direction. If you think you might not be eligible for this program, think again. Apply and see what happens; you might just be as surprised as I was!

As if that wasn’t exciting enough, through another friend, I was able to connect with an executive at RCB Bank, a locally-owned bank with branches in the Tulsa area. I told him my story, and as a result, he wants to meet with me. I’m hoping something very positive will come of that meeting; it seems like this guy is a kind of miracle worker.

Speaking of miracle workers, I’ve also contact a few personal heroes of mine in hopes they can help: Elizabeth Warren, a consumer financial protection guru and candidate for Senate in Massachusetts who hails from Oklahoma; and Tess Vigeland, host of Marketplace Money on American Public Media. I encourage everyone to watch this video of a lecture Elizabeth Warren gave at UC Berkley a few years ago. She’s incredibly insightful and has been fighting for consumer financial protections for years. She successfully fought for the creation of a new government office to oversee such matters, and has played an important role in many other matters of consumer protection. I hope she and Tess will both know exactly what to do.

In addition, I received my federal tax return and was able to pay off my two store cards to Banana Republic and Gap. Collectively, those debts were only slightly more than $400, but it would’ve taken over three years to pay them off making the minimum payment. I always made more than the minimum payment, but that doesn’t stop interest from accruing. Now, I have two fewer bills to worry about each month and can use that money for food or put it toward my student loans.

Finally, and most exciting of all, I accepted a new position at a recycling company in Tulsa! I’ll be moving back to Tulsa in a few weeks’ time. It’ll be great to be back in the city I love, though I have to admit, I’ll miss a lot of people in Stillwater.

So there you have it. Hopefully, this upward trajectory will not only continue but accelerate. I’m ready for it.

Students, Beware: A Cautionary Tale of Student Debt

Enter At Your Own Risk by Daniel Jeffries

Getting an education is required for success in today’s world. Many people grudgingly attend college merely because studies prove that people with bachelor’s degrees earn around a million dollars more in their lifetimes than people who just have a high school diploma. This diploma race has escalated even further; now, a bachelor’s degree is the equivalent of a high school diploma in the business world, and master’s degrees are the new standard. We’ll probably see more and more people racing to get those in the coming years. “What’s your point?” you ask? Education is important. No, it’s vital to a person’s livelihood. It’s what can break the vicious cycle of generational poverty. It enlightens us as a society, allowing us to understand cross-cultural differences and come to common understandings. It can make the difference between war and peace, of life and death, of prosperity and poverty, of acceptance and bigotry, of love and hatred.

It can also be one of the most expensive ventures a person will ever undertake. I should know; in my five years of undergraduate studies, I racked up about $108,000 in student loan debt. Yes, that’s 108 with three zeros. Now that I’m out of college, I’m in the middle of a battle for my livelihood. I’m not alone, either. In 2010, student loan debt in the U.S. surpassed the amount of credit card debt. The total? Around $830 billion. In 2011, the number was estimated at $1 trillion. To make a long story short (click here for the long story), I owe a lot of money to student loan companies. I’m in good standing with six of them, which accounts for half my student debt. One loan had an extra long grace period and came due suddenly last January. It also happened to be the largest of all my student loans: $50,000. The loan had been sold from Campus Door to Wells Fargo, and my first knowledge of this was when I received the first collection call. Unbeknownst to me, the grace period had ended and this new company was demanding its money.

My monthly payments for all my other student loans totaled a little more than $700 a month. Pretty steep already, especially when you make $1800 a month, and the majority of them are private loans. I was making the payments and just scraping by. Eating off the dollar menu for weeks on end. Scraping together quarters, dimes and nickels to by a dollar cheeseburger from McDonald’s. Riding my bike 30 miles for a haircut from my friend’s grandmother because I couldn’t afford gasoline or a haircut. It was tough, and honestly, quite depressing. But I was doing it. Then, this bombshell from Wells Fargo.

My monthly payment for this new loan that had come due was $395, bringing my monthly student loan payments to over $1100. Already facing the daunting task of paying the others, this was simply something I couldn’t do. I didn’t make enough money to pay my existing student loan bills, rent and utilities, let alone groceries, gasoline or anything else. This extra $395 for Wells Fargo couldn’t even be part of that equation. When all was said and done, for at least two weeks of each month, I literally had nothing in the bank. Nothing. I actually began each month with a $300-400 deficit, making it only that much harder with each passing month.

When I spoke with representatives from Wells Fargo on the phone, none showed any interest in working out a payment plan to cover the back payments I owed. They wanted their money right then, no questions asked. In fact, one Wells Fargo representative even had the audacity to suggest that I stop paying all my other creditors and just pay Wells Fargo. That’s not a solution. It would be incredibly dumb on anyone’s part to do such a thing. I tried to arrange a meeting with a credit counseling service and couldn’t even do that because of the nature of student loan debt: there are no protections for students and lenders of student loans refuse to work with any credit counseling agency. It was quite clear at that point that I needed to find a better-paying job.

So I did a very tough thing: with a heavy heart, I left a job that I absolutely loved for one that paid more. But I didn’t just leave a job, I left my city. I flipped my entire life upside down and moved across the state to take a job in a place I didn’t know, and the only reason I did it was due to Wells Fargo demanding payment. Before I quit my beloved job in Tulsa, though, I had already begun making even more painful cuts at home in order to pay Wells Fargo. I began making monthly payments, in full, to Wells Fargo, even before I was able to get this new job. And I continued making regular, monthly payments, on time and in full. That wasn’t enough, though. They wanted me to make double payments to catch up. Double. I’m struggling to make regular payments, and they want double. Because it’s so easy to do that. I couldn’t, not even on my new salary. $1100 a month is more than a lot of people’s mortgages. $1500 a month is astronomical and practically impossible.

After Thanksgiving, I received notice that Wells Fargo declared the loan in default. They wanted all $50,000-something right then. A few days before the end of the year, I received another letter from them, this time, wanting to settle for only $25,000 (roughly). If I could pay them $25,000 within 30 days, they’d call it good and move on. Well, if I had $25,000 lying around, I wouldn’t have been behind on the loan, now would I? After much research and consulting with an attorney, I’ve verified one thing: there are no protections for student borrowers. None. Zilch. Nada. The student loan companies have all the power and the student borrowers have none. There’s nothing a bankruptcy can do, not even a Chapter 13 bankruptcy, which would simply result in a court-prescribed repayment plan based on one’s income. You can’t touch a student loan company, period.

Let me be clear: I don’t want to pay less than I borrowed. I don’t expect the loans to simply disappear. I’m not an Occupy protester that wants my student loan debt wiped away. I want to pay for what I borrowed And I need to pay it. But I need to be able to live, to eat, to pay rent, buy gasoline or get my hair cut. And I need Wells Fargo, one of the largest banks in the world, to show a little decency and work with me. I can’t make a quadruple payment, and I can’t give them $25,000 within thirty days. What I can do is make regular payments. And they’ve refused to make any sort of arrangements that would allow me to catch up.

If I’m ever financially secure enough, I’d love to establish a center for the protection of student borrowers. I want laws to be rewritten. I want student loan companies to actually work with their borrowers instead of bullying them. Every other type of debt–every one of them–except for student debt, have built-in protections of some sort for borrowers. Why is it that in a country falling so far behind the rest of the world educationally, the government wouldn’t provide basic protections for student borrowers? We need a highly educated workforce. We need a highly educated society. We push our young people into college and throw them to the sharks without so much as a life jacket. What kind of message is that to send to our youth, to our future leaders?

Students, beware: there is no protection for you.

If there’s a way out of this mess, I haven’t found it. If you or anyone you know has experienced something similar to this, or if you know anyone college-bound, or an expert in student loan law, please, I’m begging you, forward this post to them. There’s got to be a solution. There must be. I’m hoping Elizabeth Warren, champion of consumer protections, will read this and automatically know what to do. I know I’m not alone. There are thousands of student borrowers in my same situation. We just need some help. Even lawyers are baffled. I could fight to change the laws, according to one attorney, but he wouldn’t recommend that fight. According to a colleague he consulted, people in my situation are “shit out of luck” and caught in a terribly terrifying version of Catch-22. What a great place to be.