Councilmember, City of Berkeley, District 7
2180 Milvia Street, 5th Floor, Berkeley, CA 94704
PHONE 510-981-7170 FAX 510-981-7177 EMAIL email@example.com
February 28, 2012
To: Honorable Mayor and Members of the City Council
From: Councilmember Kriss Worthington
Subject: End the Unfair Unemployment Penalty on Student Loans
Send a letter to Sallie Mae, Inc. to drop the Forbearance Fee.
Sallie Mae, the nation’s largest private student loan provider required unemployed
individuals to pay a $50-per-loan fee every three months to delay their payments
temporarily, even as interest charges accumulated. However, this forbearance fee was
not credited to the borrower nor refunded.
Change.org, a group based in San Francisco, started an online petition “Tell Sallie Mae:
Stop the Unemployment Penalty Petition,” to stop charging student loan fees to
unemployed graduates. According to the New York Times, with over 77,000 online
signatures, Sallie Mae responded, “we have been giving careful consideration to our
policy for some time, and we are changing it to apply the good-faith payment to the
customers’ balance after they resume a track record of on-time payments.”
Since the University of California at Berkeley is located in our city, it is imperative that
we take a leadership role and request Sallie Mae to drop the forbearance fee.
See petition here:
Councilmember Kriss Worthington 510-981-7170
Melissa Diaz firstname.lastname@example.org
1. Tell Sallie Mae: Stop the Unemployment Penalty Petition
2. Sallie Mae, Inc Letter
Stop Double-Dipping To Cash In On Unemployed Graduates
I just signed the following petition addressed to: Sallie Mae CEO Albert Lord.
Dear Mr. Lord,
Please read the story of Stef below, and end the unfair practice of charging the
unemployed a fee for forbearance.
I'm Stef, a recent graduate of a public college who took out private student loans
through Sallie Mae before the credit crunch. Despite my school's relatively low tuition
and my full-time job, I still needed the extra help in order to pay for my rent, utilities, and
groceries because my parents had passed away. Sallie Mae loaned me money with a
9.75 percent interest rate because I didn't have anyone who could co-sign.
I graduated in May with honors, but even with an advanced degree in a technical field, I
still haven't found full-time work. I'm doing everything I can to avoid defaulting on my
loans, but Sallie Mae has charged me hundreds of dollars in extra fees because I've
had to delay my payments (called forbearance). Federal loans allow the unemployed to
defer payments without any fees, so the same kindness is not too much to ask from
America's largest private lender.
Since May, I've already had to pay $300 to Sallie Mae in "forbearance fees." ($50 per
loan for every 3 month block. Consolidation is not an option.) Not a dime has gone into
my loan principal. Meanwhile, the interest on my loans keeps growing -- meaning that
Sallie Mae will cash in two times -- once with the extra fees they're charging me, and
again when I pay the interest that accrues as I look for work. As an unemployed person
looking for work, I need every extra dollar I have to pay for rent, electricity and
groceries. But Sallie Mae is preying on people like me and cashing in on the fact that we
need more time to find work before we can repay our student loans.
If I don't find full-time work before the end of November, Sallie Mae is going to charge
me another $150 in "forbearance fees" -- while my total debt continues to grow by $500.
Please join me in asking Sallie Mae to stop double-dipping. Sign my petition calling on
Sallie Mae CEO Albert Lord to stop charging me a $50 forbearance fee as I'm
unemployed and cannot make a loan payment right now.
Sallie Mae, Inc.
c/o CEO Albert Lord
P.O. Box 9532
Wilkes-Barre, PA 18773-9532
Dear Albert Lord,
We request that Sallie Mae entirely eliminate the punitive forbearance fee on Federal
student loans of unemployed and discouraged workers.
With recent economic difficulties and astronomical rates of unemployment in the last
few years the City of Berkeley feels that Sallie Mae should consider eliminating the $50-
per-loan fee every three months in forbearance fee altogether. According to the United
States Department of Labor, the Bureau of Labor Statistics shows that as of November
of 2011, the nation had approximately 3.3 million unemployed individuals. Coupled with
recent job loss and temporary work, numbers declined to 7.6 million, making this
requested policy change essential to helping unemployed students during these
extremely tough economic times.
Federal student loans grant individuals various options for repayment which include
deferment and forbearance without this additional cost or fees. If eligible, individuals are
able to defer or postpone their loans without accruing interest if the loan is subsidized.
For those who do not qualify for deferment, federal loan holders may be able to give
them forbearance, which allows them to temporarily stop payments on their loans, make
smaller payments or extend the time for making payments with no fees to the lender.
Thank you for making a partial change to the forbearance fee. Now please consider
ending the fee.
Berkeley City Council