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.