Thursday, March 19, 2015

Here is Something You Can Do Right Now To Change HESAA

Sign the petition for debt relief for HESAA/NJCLASS borrowers in default!

     Below you will find the text of a petition which I encourage everyone who visits this blog to sign. Written by a friend to people experiencing the depths of HESAA HELL, Deborah C. Gumpper has taken the fight to HESAA and come up with a specific demand that defaulted borrowers should be allowed access to rehabilitation loans on their way to financial health. As it is, HESAA keeps defaulted borrowers in default into perpetuity. Why not? They are a for profit company and borrowers in default have to sign over all their assets to them to make enormous punitive monthly payments. As Carney says in the petition, "I guess the real truth is that HESAA wants you default on your loans, they make more money that way."
     So far this egregious corporate behavior isn't against the law but it really should be -- so please sign now!

The Petition:

ATTN: Gabrielle Charette (HESAA boss)
DEMAND NJCLASS  OFFER REHABILITATION LOANS TO DEFAULTED BORROWERS: Amend N.J.A.C. 9A:10-6.18 and all other controlling statutes in which HESAA NJCLASS operates under, to grant rehabilitation loans to borrowers who have defaulted on their NJCLASS loans.

     HESAA's role as guarantor of roughly $1.6 billion in student loans and state aid to students, has completely misinformed unsuspecting borrowers that they are a profit making entity hawking high interest, subsidized loans, loans impossible to repay. NJCLASS loans is neither a federal loan nor private loan---they  magically fall in between the two.  NJCLASS fails to send consistent billing statements and ignores borrowers billing inquiries/disputes, allowing delinquency to add up so they can easily default.  A borrower’s whose loan has defaulted has no where to go; they can either negotiate with the collection attorney, who adds a collection fee ranging between 18% and 30%; they can file a Chpt. 13 Bankruptcy and stay the collection action for 5 years; or they can spend exorbitant amounts of money trying to litigate the matter in civil court only to lose.  The loan will FOREVER remain in a defaulted status until it is paid in full; which means a borrower will be well into their late 50’s by the time they pay off their NJCLASS loan. 

     N.J.A.C. 9A:10-6.18 specifically states “(c) An NJCLASS borrower may request the rehabilitation of the borrower’s defaulted NJCLASS Loan Program OR NJCLASS Consolidation Loan held by the Authority. The borrower shall make one voluntary full payment each month for 12 consecutive months to be eligible to have the defaulted loans rehabilitated.” Under section (d) it further states,   “the maximum period for a rehabilitated NJCLASS Loan Program loan or NJCLASS Consolidation Loan shall be the same as that of the [NJCLASS] loan prior to default.  A borrower who wishes to rehabilitate a loan in which a judgment has been entered must sign a new promissory note. The maximum repayment period of the new promissory note shall be the same as that of the NJCLASS Loan Program loan or NJCLASS Consolidation Loan prior to the default

     However, despite this plain language, HESAA claims they cannot rehabilitate NJCLASS loans as they are  "not authorized by either statute, or the bond indentures that fund NJCLASS loans at this time. The regulations allow for an NJCLASS rehabilitation program in the event that statute and market conditions change to allow for the issuance of bonds to finance rehabilitation."  Yet, I have found no such language requiring  a new bond issuance for rehabilitation of defaulted NJCLASS loans.  
 Yet, as above-stated, if a borrower rehabilitates their defaulted NJCLASS loans, the maximum repayment period stays the same as the original payment period.  Thus, why would a new bond need to be issued if the borrower is paying the same amount over the same time period in accordance with the original bond that funded the loan?  This makes little to no sense.  There can be no loss to the investor, nor should it raise the interest rate on the bonds. And, if the loan were to remain in a default status, unpaid, there would be a loss to the investor.  Consequently, I cannot comprehend the rationale HESAA retains when it allows loans to remain in a defaulted status.   

     I guess the real truth is that HESAA wants you default on your loans, they make more money that way.  And, the only issue HESAA worries about is their “investors.” What about the borrowers who signed on the dotted line when they were just 17 years old. This company is no more than a legal, loan sharking outfit run under the Seal of the State of New Jersey.  They need to come down from the high cloud they been floating on and adhere to the rules and regulations just like any other private loan lender. 
With your help, we can change this.  If we sit idly by, many young borrowers will face financial impotence and will not be able to move on with their lives or contribute to the economy in any meaningful way.  I am not asking for a handout; I am not asking for the loan to be forgiven; I am asking that HESAA NJCLASS give borrowers a chance in life by doing what is right.