At this point, it's the understanding of Miller's office, according to an aide, that the company is working with the DOE ombudsman's office to develop special arrangements for 10,000 borrowers (of the 130,000 who have complained to date) who have claimed that financial hardship prevents them from making higher monthly payments. Will those arrangements involve paying Sallie Mae extra interest? The DOE Office of Federal Student Aid, returning a call placed to Ombudsman Deborah Wiley, issued the following general statement, when asked to comment on Miller's specific concerns about interest and verification of the computer problem: "The Department is in ongoing discussions with Sallie Mae to resolve the company's system error that caused over one million borrowers to make inaccurate monthly payments." Apparently, the department has continued to evade the issue, not only with the press but with Congress. On November 14, in a bipartisan effort, Senator Edward Kennedy, joined by Representative Miller and two Republican congressmen, called on the Department of Education to "conduct a thorough investigation" of Sallie Mae's "serious billing error."
Joyce, for his part, says that Sallie Mae will waive additional interest incurred as a result of entering into another payment plan, such as a reduced payment forbearance, though he could not produce a form stating those terms or any other written evidence that the company had instituted a waiver policy for students affected by its error. "You don't even have to ask for it," he said. "It is automatically granted."
But it was three days after Joyce made these claims that Cristina Kaiden learned from a Sallie Mae representative how much extra interest she'd pay if she opted for a reduced-payment plan ($674.71 in the first year alone). When Kaiden asked for an extra-interest waiver, she was told flatly, "No." The Phoenix was unable to reach Joyce for comment on what the Sallie Mae representative told Kaiden — which contradicts what Joyce told the Phoenix. (See "Don't Pay Extra for Sallie Mae's Goof-Up," further in this article.)
Sallie Mae borrowers are also subject to what Cristina's husband, attorney Robert Kaiden, calls "particularly cutthroat collection practices." Over and over, he and other consumer-services attorneys, who deal with aggressive collection tactics every day, say they rarely see other companies go to such extremes. That's because, where ordinary debt collectors must go through a judge to, say, garnish wages — which gives debtors some mechanism for appeal — Sallie Mae's federal protection permits it to impose nonnegotiable administrative garnishment, not only of wages, but also of Social Security payments to elderly parents (who have acted as co-signers). Sallie Mae — as a holder of federally guaranteed loans — is even able to suspend bank credit cards, regardless of how exemplary one's credit has been. Says Dale Pittman: "Sallie Mae's refusal to abide by the FTC holder rule — the brutal collection tactics they use against their borrowers in general — are by far the worst among all the lenders I've dealt with in 25 years of practicing consumer law."