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FYI, flu, Zeitgeist, did you really read the article?
I have dealt with student loan organizations. They are a real sleazy group. There is a limit on total percentage of a balance that they can charge as fees. The percentage is 36%. They routinely violate this. Any payments made are immediately applied to the fee portion of the balance before the principal. This way they can then immediately add more to the fees. If you want to pay the balance of an overdue in full, they will drag their heels.. claiming that the account is not ‘active’ on their system and they need time to get it ‘back on their system’. They then wait over 9 months, charging interest in the meantime, until they contact you. If you are out of contact (my case, on business travel out of the U.S.), they immediately forward it to a collection agency.. yet more fees.
This type of behavior started when the student loan companies lobbied congress and got a waiver around normal collection agency limitations. Normally, before garnishing taxes or attaching accounts, the claim has to go before a judge. The waiver is that student loan collection agencies no longer have to go before a judge to prove that the money is owed. If they collect improperly, you have to chase them down and sue them.. and they make that hard.
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Don’t borrow money then. 🙂
Don’t like a CC card, cut up the card and say no thank you.
