Monday, December 19, 2005

Sallie Mae ups the ante

To drive growth, the education-lending giant is socking students with rates of up to 28%.

Ira Rheingold, executive director of the National Association of Consumer Advocates, decries Sallie's growing presence in the ugly business of collecting on defaulted debt. Pennsylvania state representative Doug Reichley alleges that Sallie is engaging in "predatory lending."

Indeed, Sallie uses high interest rates and fees to charge students as much as 28 percent annual interest on loans. As a result, some have seen their school-loan debt balloon into six-figure delinquencies that they can't hope to pay when the collection agency (which nowadays may be owned by Sallie) comes calling.

Jacking those interest rates seems like a great idea. Scumbags.


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