Wednesday, November 26, 2014

What Are Our Demands? I'm Glad You Asked!

     Over the years I have become convinced that based on the mammoth profits this state agency (that supposedly serves the students of New Jersey) has raked in, there must be enough people who have borrowed from HESAA/NJClass to fill a stadium. That means there are far more of us then there are "bondholders" who made the "investment" in bonds that eventually became student loans with absolutely zero protections for student borrowers (i.e. you.) More on that in later posts, but suffice to say that if all of us or even half of us were *organized* into a single movement against HESAA there would have to be changes made that would actually help us out of this debt hole the state is profiting from, instead of the business as usual that keeps us down here for decades.
     Now is the time to start taking our own lives and futures back from such power brokers, the cynical  rich profiting off the backs of poor students -- yeah who make up the lion share of NJClass borrowers. Don't think for a minute that stereotype of the shiftless youth cashing in on "easy money" has even one iota of truth. No f'ing way, these are hard times and if anything this was a form of "stimulus" that ultimately injected money into the economy and while the bankers and money lenders lined their pockets with our futures. We need to unite to change all that.
     I am pleased that I've heard from so many people about their loans, but I want you to do more than tell me your story, I want your feedback and suggestions and ultimately your commitment to yourself and the rest of us that you will do your part to end this corrupt state of affairs. To this end I present to you a list of things I think we all agree need to change at HESAA. Email me at if you have any comments or suggestions.

Minimum Customer Service Demands

  • Real entry interviews with a financial aid representative (not online) for all NJClass borrowers that fully explain the terms of the loans and the promissory notes they are about to sign.  Nearly every borrower was not given even basic information about their loan, aside from legalese on some online document.

  • Accountability for HESAA staff giving out wrong information and/or not communicating all options to borrowers concerning deferment and/or forbearance.  

  •  A real-time complaint system that will result in something actually happening and leniency on borrowers who made financial decisions without knowing there was hardship deferment as a result of negligence of a HESAA rep.

  •  Full training for HESAA staff concerning phone etiquette and respect for the individuals that are exploited by student debt for some bondholders’ profit.  This especially concerns the collections department, but should be for all levels of the organization as there are some folks high up who really don’t take borrowers needs into consideration.  The “tough shit you borrowed this” attitude is another way of saying this.

  • An end to harassing and bullying collections tactics.

 Minimum Financial Rule Change Demands

  • Income-based repayment for NJClass loans is a primary demand, at the very least people need to be able to make payments that are within their income range and without further penalty to the borrower.

  • (re)Introduction of subsidized loans so that loans don’t accrue interest while in school, prior to earning a degree that will in theory pay for the loan.  The lack of subsidized loans makes borrowers pay much more than they ever received.

  • Loan forgiveness after a certain length of time, like federal loans that have been faithfully paid for 20 years.

  • Consolidation of loans under $30,000.  Who came up with this rule and why?  Either way it works to confuse the borrower and accrue more interest for HESAA.

  •  Billing periods of at least 30 days that give the borrower a more realistic window to pay without risking being sent to collections for late payment.

  • Discharge of all debt if a borrower dies, i.e. they can’t come after your family if the student has died.  It is currently a rule they can legally put a family member in collections for not paying these loans.


Long Term Goals of the Movement

  • Reinstatement of financial aid grants and programs that help students pay for college.

  • We need a statewide cap on all tuition.  New Jersey has some of the highest tuition in the country but according to the Star Ledger is also one of three states whose poverty rates have increased while others have improved slightly.

  • Bankruptcy rules need to change to include discharge of NJClass loans.  If you can do it for credit cards you should be able to for student loans, we need that and other protections written into the law. 
  • Last but not least: Fully funded public universities and colleges and a complete abolition and forgiveness of all student loans.  I’m not saying it’s happening tomorrow, I’m just saying we all would like to see this happen and it's worth all our efforts to work towards this noble goal. 
Thanks for reading, once again hit me up at with your thoughts, I'm out.


Monday, October 27, 2014

The HESAA/NJClass Catch 22


Hi, Mark.  Love your site.  I have my own, strange story to tell:
I took out roughly $38,000 for 4 years through HESAA prior to graduating in 2008.  I was keeping up on the payments, and then in 2009, I went through a separation and subsequent divorce.  During this time, I had moved out of the house, and had no real permanent address (mostly sleeping on couches and staying with my parents) for about 9 months.  During this time, my (now) ex-wife would just throw out my mail, which included the bills from HESAA.  I figured it was an annoyance, but not a problem.  I could just call and check my account, right?
Wrong.  By the time I had found out about a delinquency on my FEDERAL loan, I made a call to HESAA to see if I was delinquent.  I was, and they said I could enroll in a program to get my account back on track and amended as if I hadn't missed a payment.  Turns out, they were only talking about the Federal-guaranteed loan, because when I was supposed to get a tax refund from NJ a few months later, THAT'S when I started getting notices from the Law Office of Russel Goldman that I owed money and had to pay immediately.
Fortunately, I was able to get another local attorney, Veitengruber Law, to bargain on my behalf.  Instead of my normal $98/mo payment, I went to $250/mo to $400/mo and now have to pay $500/mo.  Also, after 3 years of paying this arrangement, I'm being forced to apply for loans to pay off the balance that I know I'll get rejected for JUST so I can show that I'm trying to get them their money.  Every month, I have to show a new rejection and get another mark against my already low credit score.  $13,000 left to go, and I'm still looking at a 2-year repayment period.
It's very Catch-22. I get rejected for loans because of an outstanding delinquency, which is what I need the loan to repay.

Monday, September 8, 2014

Why Student Loans Aren't Entirely Your Fault

I can hear it now.  "You borrowed this money, it's your problem that you owe it, tough shit kid!" When students rightly demand answers about how they got into the debt hole the "personal responsibility" and "Protestant Work Ethic" crowd do back flips thinking all students who borrow are financially irresponsible, or worse, slackers who have no thought for the 'morrow and require tons of money to keep up their partying schedule while earning their liberal arts degrees.  (A subset of these people think there should be no liberal arts degrees at all but that's another post.)  Needless to say we at HESAA HELL have no time for arguments that want to blame students for a system they didn't create that benefits the loan companies and their political hacks in the statehouses, governors mansions and hallowed halls of government throughout the land.

Here's why the debt that you currently owe can not entirely be laid at your tired, hard working feet.  It's not that we didn't make the personal decision to borrow, obviously we did that, it is just that in the grand scheme of the current economic crisis, the lack of decent paying jobs meant that there weren't a whole lot of better options.  In this economic context (also known as the "real world"), taking out loans was the easiest, fastest way to pay for school and in many cases stay afloat while we studied our butts off.  (Hate to break it to you but being a student is hard work too.)  Is the Great Recession the fault of students?  Hardly.  No one asks to be born without money and contrary to the claims of the "work hard and pay for it without loans" people this severely limits one's ability to get through school in a reasonable amount of time and to take advantage of all that colleges have to offer.

The fact is, the system is setting up young people for a lifetime of debt and there is a huge amount of profit being made from student debt misery.   Anyone can get a student loan from HESAA, as long as you have a cosigner, which should come as no surprise if you are at all familiar with the basic principles of loan sharking - they will come for your family if you don't pay!  It doesn't matter what your credit rating is either; for profit driven student loan companies like HESAA, everyone is asked for a cosigner. Those who take aim at students who borrow, sometimes very high sums of money must acknowledge that student loan companies have an unsustainable and morally bankrupt business model.  This has led to a generation of students who are chained to usurious loan and collections companies who pursue monthly payments with a zealots conviction, even pursuing families after a borrower dies.

This situation can and will change but it starts with borrowers themselves becoming empowered and accepting that the solution is to get together with others and come up with our own collective answers.  "Personal responsibility" won't lead to a resolution of the student debt crisis, only by organizing a massive fight back at the state and national level will we be able to garner the political muscle to go toe to toe with paid lobbyists and politicians of the student loan industry.  We've got a big job ahead of us but one of our first goals must be to work to shift public perception of student loans away from the stereotype of "lazy students who don't want to work" to the real culprits: loan and collections companies and their accomplices in state and federal government who have consistently and brutally slashed financial aid for working class students over the last few decades. 

Thursday, August 28, 2014

HESAA Rep Calls Back to Lecture a Borrower on Her Language!

A friend of HESAA HELL dropped this note in my inbox.  One would think that if HESAA spent more time actually helping borrowers than lecturing them we'd all be better off.  Better yet, we should abolish HESAA, lower tuition and increase grants and scholarships!


I have a short but funny story!
Last year I was doing a lot of back and forth with this horrible company- and I obviously had the worst customer service in the entire world.

While getting off the phone, shocked, I said to my boyfriend or mom- whoever was standing right there, and said, "wow, what a bitch." And I hung the phone up.

I am the most chipper person I know- especially when it comes to customer service and especially over the phone.

The lady with whom I was dealing with thought it was a good idea to call me back.(I didn't answer, my phone was elsewhere.) she left a message. She left a two minute long message ranting about how I shouldn't call her a bitch and I should show respect. Told me I should wash my mouth out with soap, and asked if my mother knows I speak like that.

...I was 23. Yes my mom knows. ;)

Tuesday, August 5, 2014

Welcome To Robert Rusczek, Fellow HESAA Blogger

I recieved the following note from a borrower fed up with HESAA's poor track record with "customer service" and overall chicanery with (let's say this together) *our* money.

His name is Robert Rusczek and his blog post about HESAA is an open letter to his state legislator.

Here is the horror story as he related it to me:

I pay the HESAA bill every 4 weeks as to line up with my paychecks. After being in repayment for a significant amount of time, I have accumulated roughly 3 weeks of a buffer between the time I am paying and the due date. On July 3, 2013, I had called HESAA to see when I could make the payment for the Aug 1 due date, because it was still listing me as due for July 1, when I had made that payment back in June. The representative I spoke to that day, Anthony, advised me I could not make any payment and have it count to the next due day before the bill was sent out. That occurs on the 12th of every month. I had a payment set up for July 9, 2013 already and when I was advised of this I thought I had changed the web payment to the 15th. That discussion was heated because I felt it was an unfair predicament as I was trying to pay my loan, but accepted it and went about it. 

After July 10th, I noticed a debit for the loan amount against my bank account. I thought nothing of it until July 18, 2013, when I looked and saw I was still due for Aug 1. They had not credit the payment made July 9 correctly. I thought I had changed it as I mentioned earlier, but apparently the process did not complete. So I called HESAA. The first representative I spoke to advised me they would not change the date the payment was applied on and would not refund me the money so I could remake the payment either. I was not happy with this solution and asked for a supervisor. She transferred me to a supervisor and I received a voice mailbox. I was not content with just a voice mail, so I called back and spoke with a different rep.

This rep, Johnnie (a female), again, tried to transfer me to a supervisor after I advised her I had no problem waiting as long as needed for a supervisor. She placed me on hold and came back with an offer of not billing me for Aug 1. I told her this was unacceptable that because of the nature of the loan structure, my next payment for Sept 1 would be paid entirely towards interest, nothing being paid on principle. I advised her I would like a supervisor myself. She transferred me but I received a voice mail again.

I called back a 3rd time and received Johnnie again. I advised her of the issue and asked me if I left a message. I advised her no and that I wanted a supervisor today, she disconnected me.

The fourth time that day I called I spoke to Anthony again. I advised him I was not happy, that this situation was unacceptable, that having worked for a loan company previously and now as a state employee that this treatment was also unacceptable. When I asked him for a supervisor he placed me on hold then returned, offering me that he would monitor the account and make the correction to delinquency after the penalty ha been assessed. I realized that was the best I was going to get and agreed, but wanted something in writing, either by email, fax or letter stating this. He laughed and told me how I could not force him to do anything and how I should be happy they were giving me this courtesy. I explained to him that it was not acceptable, asked for a supervisor again and advised him that I wanted to hold, he proceeded to lecture me on how, "You (Robert Ruszczyk) are a college graduate and need to grow up a bit. This is not how adults act." I had not raised my voice or used language. I again asked for a supervisor. 

He relented at that time and transferred me to a supervisors voice mail again. I wrote down that supervisors number and called him back directly. This supervisors name was Robert Larid. I explained to him the whole situation as well and he again told me that there was nothing they could do but monitor the account, but again would not send me something in writing. I explained that I therefore would be escalating it to the legislature and the Governor. He did not respond to this. I then addressed the issue about Johnnie and Anthony with him. He told me he would pull the calls, but did not seem concerned with it. He did not offer any follow up either.

After disconnecting with him, I then composed the original message to my legislators as well as phoning the Governor's office. The Governor's office connected me with the Director of HESAA's office, who then put me in contact with Mr. Archer, who I was told was the Director of Customer Service. After having to leave a voice mail with Mr. Archer, he responded within 24 hrs. He agreed to pull the calls as well as sending me an email to confirm that there would be no delinquent reporting and that I would be due for Sept 1.

Monday, July 7, 2014

HESAA Collections Refused to Tell Borrower of "HARDSHIP DEFERMENT" Option

I think Teresa Gervasio, head of HESAA student services, has some 'splainin' to do.  Why wasn't this borrower informed of her right to a hardship deferral after she explained to a HESAA rep that she couldn't make her monthly payment?  "Ask your parents for money" is not a proper response to a student borrower who can't make monthly payments, when the Hardship Deferment clearly exists.  

Why wouldn't they tell her about that?  I bet it's because they are coached NOT TO by management because the more people in deferment the less money that filters back to the anonymous bond holders who are making a killing on the student loan sharking racket. Thanks to the State of New Jersey and Governors Corzine, Christie and McGreevey for allowing this.
Here's our friends story:
Hello, I just recently read your blog and felt the immediate need to contact you and thus, share my story. I graduated college two years ago. I owe more than $100,000.00 and my monthly payment is almost equal to my father's mortgage payment. The thought of paying my loan, that could have been a mortgage, while still living with my parents sickens me to the core.
    Last summer, I had the unfortunate experience of my company downsizing and I lost my well-ish paying job. The first thing I did was call HESAA to tell them that I could no longer afford to make my usual payment and I needed help. The response was appalling. Like the other stories on your blog, I was told to ask my parents for money. How could they say this to me? I couldn't believe it. This was all the help they gave me -- telling me to 'figure it out' and 'ask around'. I believe this to be the decline of humanity. Turning a  blind eye to people who need help. If I turned my back on a person in need I think I could physically feel myself being damned to hell.
    In this day and age, it is not easy to find a job. A couple months passed, still unemployed, scrounging around to make payments. Some months I just could not afford to pay the whole amount. They finally threatened to garnish my fathers wages, and when he fought back, and explained my situation (for the third time at this point) the response he got..... almost put a hole in the wall. He was asked why I had not called as soon as I lost my job and claimed a hardship. ARE YOU SERIOUS?! DO YOU PEOPLE NOT HAVE EARS? OR SOULS FOR THAT MATTER? Then I was told I had to double my payment to get caught up. Even after landing another job, doubling the payment seems more like a punishment rather than them 'helping me out'. I have just one question. How do these people sleep at night? I guess its my fault for wanting a good education. MY BAD. If I knew I had to sell my soul to the devil to pay for college, I might have reconsidered.

Monday, June 16, 2014

NJ CLASS Borrowers: Get In Contact With Me,!

Dear Friends of HESAA Hell,

You know you are burning and not just because it's the summer.  Some of you have the dead weight of HESAA loans to contend with and it won't just go away.  It's time to speak out, if only on an anonymous internet blog.  It's your turn to join millions of people who are fed up with the student loan scam.  Please take a few minutes and write to me your HESAA horror story. 

Hell, I'll entertain email from people who think HESAA is a great deal, even though the interest rates are above federal loans and have even fewer protections than the already abysmal protections that student loans have in general.  All voices are welcome, honest.

One question I'm always concerned with is: How much did you know about HESAA before you borrowed?  Did you know they were actually private, for profit loans being "guaranteed" by a state agency.  The only thing being guaranteed is that they will take your money!  Remember, college used to be a well funded option.  People could go to college for only hundreds of dollars a year, before the politicians used the economic downturn to wage war on people who work hard for a living for very little pay.  There has been no recovery for New Jersey and yet, we still have some of the highest tuition in the country.  Are you mad as hell?  Good!  Write me back.  Ok?



Wednesday, February 5, 2014

Borrower Pays $1,000 a Month To HESAA

Below are comments from a borrower who found me on, I removed all the location details.

Please visit: 

Sign the petition!  Let's get the ball rolling.
I currently owe HESAA over $134,000, over the course of 30 years, at an interest rate of 8.3%. I'm currently paying $1,012.22 a month, and this is after consolidating my loans (through HESAA unfortunately).

I'd love to get my loans consolidated through another lender who might offer better interest rates, but just about all of them don't offer consolidation for loans over $125,000.

I also have somewhere around $30,000 in federal loans, but I was able to get that deferred for now.

I attended ---- University, and greatly enjoyed my time there. I landed a job at a marketing firm in ----- , where I'm making $30,000 a year, but with taxes I'm paying more than half of my earnings to HESAA!. I don't understand why they can't offer IBR to students. I thought their purpose was to help us; not take advantage of college students who don't know what they're getting themselves into.

"How Is This Constitutional?"

I had the opportunity to converse with this HESAA borrower not too long ago. This story shows clearly that the loan sharks behind HESAA really don't care about your life, just enslaving you to debt for as long as they can make a profit. Someday this is going to change when you and I and the rest of us are ready to do something about it.

Is it Constitutional? That's a broad question but in the main I don't think the people who wrote the Constitution or Declaration of Independence had this in mind when they wrote those documents. How do student loans fit into "life, liberty and the pursuit of happiness?" I suppose for the "bondholders" who fund HESAA they are happy as they lunch on caviar and champagne while we toil for pennies on the dollar. But enough from me, here's the email I received.
Thank you for your hard work helping students. It has seemed lately that those who were heading the fight against this injustice have gone quiet. I've begun to lose hope. 

We all have our student loan stories. Mine was that during college, a couple doctors prescribed antidepressants to me for about 4 years. Little did I know, two of the side effects were erratic behavior and memory loss. After finally getting off of the medication, I found that I had taken out $100,000 in private student loans and $30,000 in federal student loans to attend a state school. My degree? Sociology. I have no recollection of applying for or taking out the majority of these. 

I recall taking out the first $10,000 in private loans and I remember taking some kind of online class in order to be eligible for federal loans, but I do not remember taking out any more than this. Imagine how I felt when I found that I was $130,000.00 in undischargable-in-bankruptcy debt when I woke up from my medicine "coma" one day. Frankly, if I did take these loans, I do not believe I was of sound mind to do so. I think there is some kind of error though because I have nothing to show for any of this money besides my degree which did not cost $130,000 because I was an in-state student at a public university. Apparently I have no recourse for any of this. My life has never been the same. I'm almost 31 and I have no idea when or if I will ever be able to have children.

I really hope that we can expect some kind of restructuring or justice here. It is devastating that a teenager can make decisions in good faith that can destroy their future for the rest of their lives. How is this constitutional?

HESAA: Inflicting Pain On Us One at a Time...

This came in from a HESAA borrower who was tired of being bullied by this agency who supposedly works on behalf of us. We don't have to let them get away with this. Time to organize the fight back.


I am a fellow Hesaa Hell inductee. Upon graduation i was unable to find a job that was able to pay the $900 a month that hesaa wanted (mind you this is on top of my 300 dollar sallie mae loan payment). After 6 months of payments below their requirement my loan was put in default. My loan was sent to a lawyer. I continued to make payments but as of this past week i was told my payments would no longer be accepted and that the full amount of $67,000.00 was due.

When i said i didnt have that kind of money I was told that I should have thought about that before going to school and that I should consider asking my father to levy the house deed to pay for the loan since he is a cosigner. I told them that wasnt an option and then was told to ask a rich relative or someone with better credit to pay it for me and then i could pay them back.

Since when did getting an education become something that enslaves you in life crippling debt forever? And how are we suppose to help build our economy as recent graduates if student loans make it impossible for us to live on our own or live at all for that matter? The education system in this country is fucked, because once again big business and greed has rearrd its ugly head and our government is doing nothing to help its people.

Wednesday, January 15, 2014

HESAA Borrowers Unite!

So since starting this blog I realize it is going to be an uphill climb finding out all the information on HESAA.  They aren't necessarily a transparent state run loan sharking scheme, but I'm *going* to find something on them that I think deserves attention and is worth exposing in the media.

I'm also going to need your help!  There are so many of you out there.  Let me tell you a secret - we can win.  That's right.  We can beat these vampires back to their hell hole where they belong but only if we stand up for ourselves.  Only when we make it our job to put in a little time once a week for the cause of student loan borrowers everywhere.  This is a huge issue for the whole country and it isn't getting any much media attention but as I said above, it will.  I'm going to do my part.  Will you do yours?

Here's a great post I found on Yelp from some HESAA borrowers.  I added my own comment leading people here of course but those comments were written within the year.

Good job!  Thank you for using Yelp to talk about HESAA.  The only problem with online rants is that it doesn't end up doing anything substantial.  That is why I'm going to challenge you to get involved and start learning how to be an organizer.  Yup.  That's right.  There's no way around it.  You want change right?  The time when we just paid and paid and paid and didn't ask any questions and "thought we were doing everything right" is over.  Nothing about HESAA can be described as right!  So we need to change our mindset and start looking for other people who are in the same predicament as we are.  There is power in numbers.

Don't just get mad, it's time for us to get organized and we can start by calling on our elected officials to investigate HESAA.  We need to put the pressure on them for once, after all those years of them coming after *us* for what's left of our income!  I hope to hear from y'all soon.  We are only getting started and this is our fight.

Saturday, January 4, 2014

State Senator Steve Sweeney: Investigate HESAA!

Below you will find the text of a petition I started today on Please sign when you get a chance:

State Senator Steve Sweeney: Investigate HESAA!

Due to overwhelming evidence from borrowers, the Higher Education Student Assistance Authority or HESAA has been harassing and intimidating students who are in default but also average borrowers in good standing. In HESAA's role as guarantor of roughly $1.6 billion in student loans and state aid to students, they have failed to inform prospective borrowers that they are a profit making entity that are hawking high interest, subsidized loans. In 2007 the Star Ledger exposed the organizations acceptance of kick backs from Sallie Mae, who bribed HESAA to promote Sallie Mae to students over other, cheaper options.

We are the constituents in New Jersey who went to college in order to better ourselves, meanwhile we have this corrupt agency harassing and intimidating us into paying exhorbitant monthly payments that not even a State Senator could afford. Senator Sweeney, do the right thing. Launch an investigation into the collections tactics of this corrupt state agency.

Mark Hesaa

Thursday, January 2, 2014

A Primer in HESAA's Past (wink!) Corruption

In the course of researching HESAA for this new blog I quickly discovered  that they have been caught red handed making millions in kick backs from Sallie Mae in return for steering students toward this for-profit lender, when they could have been sending people to the less expensive public loan program.  For some of you this is old news, but for many more I am certain this wasn't something that you knew before you took out a NJCLASS loan.  Can it be that a corrupt organization can change it's tune and reform itself?  Maybe, but take a walk with me down memory lane back to that far away year of 2007 when a story broke that must have sent chills up the spines of top devil executives of HESAA.

What's that you say?  Your financial aid office didn't tell you about HESAA's track record of dirty dealing with Sallie Mae?  Here is text from the book The Student Loan Scam - The Most Oppressive Debt in U.S. History - and How We Can Fight Back by Alan Michael Collinge who founded - a site you should check out and a book you should definitely get a copy of and read cover to cover.  (You are a student aren't you? This is really something to study!)  The part about HESAA starts on page 75 in the chapter entitled "The Oversight Fiasco," you'll find this passage under the helpful heading "Collusive Relationships."

"In 2007, in the midst of the various scandals surfacing in the student loan industry, a reporter for the Newark Star Ledger, Ana Alaya, found that the New Jersey Higher Education Student Assistance Authority (HESAA) had engaged in a contract with Sallie Mae.  The agreement was that HESAA would steer state schools to use Sallie Mae as a preferred lender and in return would receive cash payments based on the amount of loans that those schools' students borrowed from Sallie Mae.

Over a seven-year period, HESAA received a $2.2 million payment on an annual basis--a total of more than $15 million, for promoting Sallie Mae...

...While the director of HESAA denied that the agency steered students toward any particular lender, at least one university representative confirmed that this was the case.  Dave Muha, a spokesman for Drew University stated that the university decided to exclusively market Sallie Mae loans to students. 'We did that at the encouragement of HESAA ... From our perspective, there really is no reason to question a state agency set up to serve the interests of students going to school in the state.' Muha noted that the university was unaware that HESAA was receiving payments from Sallie Mae in return for loan volume.

Upon this discovery, HESAA immediately terminated its agreement with Sallie Mae, as well as a similar agreement the agency had struck with Nelnet, another notorious lender in the industry."

It reads like a regular crime novel doesn't it.  Another look at the quote from Muha above is telling "there really is no reason to question a state agency set up to serve the interests of students..."  That would be a true statement if that was indeed what HESAA was doing.  Instead of providing the most affordable options for students it was steering the sheep directly to the wolfs dinner plate. 

Reading the original story by Alaya is very instructive.  Towards the bottom of the story we learn: 

"The partnership struck in 2000, with HESAA as the designated federal guaranty agency and Sallie Mae as the student loan lender, was born at a time when private lenders were competing to join FFELP (Federal Family Education Loan Program) at participating schools.

It was at that time that HESAA pushed the public colleges and universities to participate in FFELP, which uses private lenders, rather than the Direct Loan Program, which uses the government as a lender, said Montclair State University spokeswoman Anne Frechette."

At the conclusion of the article, Frechette then goes on to offer this rather unconvincing excuse for HESAA's dirty deal.  "In the end, students benefit by having more choices."  (!)

That has to be one of the most disingenuous arguments because the government Direct Loan Program has a something called a "subsidized loan" which for any readers who don't know what that is you need to look it up asap.  It means that the government will not charge you interest while you attend classes and it is a type of loan that you will never, ever be able to borrow from HESAA. 

The Direct Loan Program also tends to have lower interest rates than private lenders which would also reduce overall debt paid over the life of the loan.  So really, "in the end" what Ms. Frechette meant to say was that students were screwed royally by having the "choice" (encouraged by HESAA and the public colleges fin aid staff) to pay more money back in loans to a corrupt private company (Sallie Mae) that paid off public officials at a corrupt state agency (HESAA.)

This collusion went on for 7 long years before HESAA was busted and ended the honeymoon with Sallie Mae. By '07 it was too late, the damage had been done HESAA had succeeded in putting Sallie Mae in top billing over the federal Direct Loan Program which was a better deal for students. How many students in the state of NJ do you think that represents? At a minimum, hundreds of thousands of people had their lives ensnared in crushing debt while Sallie Mae executives took home monstrous rock star pay increases. How many many millions in loans does that represent?  

The article says this.  "Montclair State University ... uses Sallie Mae for 99 percent of its $67 million in student loans, according to Student Marketmeasure..."  $67 million and that's just Montclair State!  And notice how this was targeted at "public colleges" that's where poor folk go to college (sorry Princeton,) the most likely to pay for school with loans.  Either way we are talking about hundreds and hundreds of millions in loans that got funneled to Sallie Mae through HESAA.  So now you know what HESAA has done in the recent past that may justify that feeling in your gut when you sign that piece of paper that you are making a deal with the devil.  I need a shower now.

-Mark Hesaa

Wednesday, January 1, 2014

The Devil Is In The Details

Ok, on to my second post and I've only just opened up shop here.

Check these out:

Ever notice that the HESAA-NJCLASS bill gives you a much smaller payment window than other bills?  Maybe it’s a coincidence?

When I spoke with a HESAA representative about the fact that the "billing period" is only three weeks they could offer no explanation. What’s worse, even though this was a “December” billing period, if I had sent them money before the arbitrary date of December 16, it would not have counted as my monthly payment!  The representative was almost sheepish as she explained this greedy policy.

In comparison, the billing period for a Chase credit card for the same period starts on December 5 and the borrower gets all the way until January 2 to make a payment. Why should it be any different with student loans?  Well, you aren’t in Kansas anymore, there are very lax rules and protections regarding student loans, a problem I urge all readers to get involved in changing.

This tactic is a loan sharking trick to get people to miss payments.  If you have a shorter window to pay, you are more likely to miss payments.  Default = more money for the bondholders.  I knew within a few months of taking out these loans that there was something shady going on with HESAA.  In posts to follow, I will explore some of the "open secrets" about HESAA and how it colluded with Sallie Mae to screw students.