Bowing to pressure from an online petition, lending giant Sallie Mae offered to change its fee policy for borrowers who have delayed payments on their student loans. Borrowers who enter into forbearance will now have the recurring $50 fee Sallie Mae charges to delay payment on the loans applied to the loan balance once borrowers “resume a track record of on-time payments.”
This move comes after Stef Gray, a resident of Brooklyn, N.Y., walked into Sallie Mae’s Washington D.C.-based office on Thursday and delivered some 77,000 signatures entered in an online Change.org petition. According to The New York Times, Gray was accompanied by Molly Katchpole, the 22-year-old nanny who persuaded Bank of America to back down from imposing a $5 monthly debit card fee a few months ago.
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Gray, who took out $40,000 in private student loans with Sallie Mae to help finance her expenses while she attended a public college, started the online petition in November, aiming for 150,000 signatures. She didn’t have anyone to cosign her loans, as her parents had passed away, and so she was offered a 9.75% interest rate on her loans — a substantial amount higher than the average interest charged on federal student loans, which ranges from 6% to 8%.
Gray says she graduated in May, but has been unable to find a full-time job. Since she was unable to pay her loans, Gray deferred her $600 a month payment by entering into forbearance. But unlike federal student loans, which allow unemployed graduates to defer payments without fees, Sallie Mae charges $50 per loan for every three month period of forbearance. Under this structure, Gray, who carries four loans, was made to pay $150 every three months (Sallie Mae caps the fee at $150). That total was not applied to the loan balance, which is the piece of this puzzle Sallie Mae agreed to change. Now the debt will be reduced by the combined amount of fees paid once the borrower resumes paying off the loan.
In an update to the online petition, Gray said Sallie Mae’s gesture was a good first step, but does not go as far as she would like. “I’m amazed that we’ve made this kind of progress against a financial behemoth like Sallie Mae,” she wrote. “But it’s also clear that their action wasn’t enough. It does nothing to help borrowers like me who are in real financial trouble.”
Gray pledged to fight on until Sallie Mae agrees to drop the fee altogether, adding: “Sallie Mae isn’t going to get rid of us by offering weak half measures.”