by Mandi Woodruff
The country’s largest private student loan lender, Sallie Mae, has changed the $50 penalty it usually charges unemployed borrowers to defer their loans.
Instead of going into the lender’s own pockets, the fee will now be applied to students’ loan payments.
The lender buckled under pressure from a student-led protest that garnered more than 75,000 signatures from people urging them to end the fee altogether.
“We’ve been looking at this for some time, and the petition confirmed there was an appetite for this modification,” Patricia Christel, a spokeswoman for Sallie Mae, told the AP.
Stef Gray, a college graduate who launched the anti-fee campaign on Change.org told the organization Sallie Mae’s gesture is welcome, but not nearly enough.
“Sallie Mae is unfriendly to student borrowers, whether they keep the $50 for themselves or eventually apply it to students’ loans,” Gray said. “At the end of the day, Sallie Mae is still asking unemployed college grads to fork over money they don’t have.”
Federally-backed student loans don’t charge a fee for students who defer their loans due to unemployment or other financial reasons.
College borrowers are often warned against securing private student loans, as they often charge variable interest rates much higher than federal loans and come with far less flexible repayment plans.
The Consumer Financial Protection Bureau has been pushing for more transparency in the student loan sectorever since its new director, Richard Cordray, took office in January.
This isn’t the first online campaign that’s pressured major companies to backpedal on unpopular consumer fees. Similar Change.org petitions helped ward off Bank of America’s $5 debit fee and Verizon Wireless’s $2 convenience charge last year.
Said Ben Rattray, CEO of Change.org:
“Gone are the days when corporations can implement unfair policies and get away with it.”