Ah yes… Time once again to take a quick look at my student loan for the New Jersey Higher Education Student Assistance Authority. This loan aggravates me for a variety of reasons (which I’ll state below). I am pleased to announce, though, that I’ve made somewhat significant progress in paying down this loan to a less unruly level than when my repayment began. Since I began repaying the loan, I’ve reduced the principal due by a few thousand dollars, which is pretty good considering the interest rate.
Anyway, some things about this loan just make me (and thousands of others, I’m sure) mad:
- Interest Rate: I’m paying some 7.33% interest on my NJCLASS loan. That’s just too high of an interest rate for a borrower like me, who has an 800 credit rating. For comparison’s sake, my Direct Loan from the federal government has a 4.25% interest rate – much more acceptable.
- No Online Payment: I’m not sure how, in the year 2009, NJHESAA does not have an online repayment option. That’s crazy. When I graduated from Rutgers with my Masters Degree I had three student loans. One of them was to CitiBank. I was able to pay back the entire CitiBank loan (which was probably $8,000+) in less than a year because of the online payment options. NJHESAA is really missing out on getting an extra $50 here or $250 there in online payments. Either that, or they’ve strategically opted to not have an online payment gateway.
- Balance Inquiries: In a related point, the NJHESAA has no active online resources for borrowers in repayment. In other words, I can’t log-on to their website and check my balance or see my previous payment history. All of this is available with the federal government’s Direct Loans program.
- You’re Stuck: However, one of the most aggravating parts of the NJCLASS repayment is that you’re stuck with NJHESAA. I can go out and find better repayment terms from another lender, but I would not be able to pursue the improved terms without NJHESAA approving me taking out their entire loan. Let me rephrase that so everyone understands… I can go to Bank of America and get approved for a 4.5% loan specifically to repay my NJHESAA loan. However, I cannot repay my NJHESAA loan in full by switching to Bank of America without NJHESAA’s approval to do so. Talk about dealing in a fair marketplace…
One of the things that really irks me about this loan, though, is more of a historical aggravation in that NJHESAA once reported me to the credit bureaus as having paid 30 or 60 days late…while the loan was still being deferred because I was still in school! Talk about complete insanity!? And when I called them up to complain, they said that while they agreed that the report to the credit bureaus was an error on their part, there was nothing they could do about it. This negatively affected both my credit score and my Mother’s credit score since she was a co-signer at the time. Bear in mind that both my Mom and I have never made a late payment on any account at any point in time ever. Thankfully, I’ve disputed NJHESAA’s erroneous report with all three credit bureaus and they’ve removed the late payment error.
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While the entire student loan industry needs a vast amount of reform, at this point I’d settle for a company like NJHESAA getting itself into the 21st Century with an online payment and loan balance/information portal!
I know for a fact that if you have more than one NJCLASS loan you can consolidate with Chase or Wells Fargo. NJCLASS does not restrict you from taking your loan elsewhere. The interest rates are amongst the lowest for private loans in the country. It is foolish comparing federal and private loan rates, apples and oranges anyone? The online part of your complaint is true, but they are run by the state and cannot exceed their budget. Some of the major systems in place right now are the same ones that were there when the agency was started. They are trying to update, but like any government agency, who knows when that will happen. I know people like to complain about repaying loans, but I guarantee you that no one complained when the loan was disbursed and the student was able to go to school. On a different note, as far as your credit reporting dispute goes, the only way that a reporting is removed is if the company or agency reporting agrees to it. NJHESAA had to approve the removal of the mark otherwise it would have remained for 7 years. Also, if you are having trouble contacting NJHESAA you can also try servicingandcollections@hesaa.org you can get a response without having to wait on the phone.
Mr. Eggshins,
Brilliant name – I love it! It would appear that you had a much different experience with the folks at NJHESAA than I and many others have had in recent years. I’m not sure if you are one of the NJHESAA employees who have been frequenting my blog or a friend/family member of one, but regardless, I’m glad for your feedback. Thanks!
Your comment about the interest rates between federal and private loans is a bit premature for the information presented in the entry. But to elaborate a little bit…NJHESAA funds the NJCLASS program through tax exempt bonds. The base interest rates on these bonds is 65% of the 12 month LIBOR rate. Today’s 12 month LIBOR is about 1.9% . When these tax exempt bonds were issued in May 2001 (which is the pool that my loan was funded from), 12 month LIBOR was about 3.99%. So if the rate was fixed at the issuance of the bonds, the base rate being charged to NJHESAA is 2.59%. If the rate is floating, then the base rate being charged to NJHESAA today would be 1.23% unless the bonds have a floor (which I imagine they do).
For those of you reading who don’t do this type of math, the information above means that NJHESAA pays either 2.59% or 1.23% interest rates on the money it turns around and lends to students in this program. At least for the specific subset of students that fall within the particular bond issued during the timeframe listed above.
The interest I pay on my consolidated NJCLASS loan is 7.33%. Seems like a big spread, don’t you think?
I’m not hating on NJHESAA, but I do think these financial topics need to be made more accessible to the public (and I’m not talking about posting information on a website – I’m talking about translating all of that crap above into terminology that the masses can understand). I’ll wager that almost no college freshman can grasp the complexities of the information above. Yet we, as a society, allow freshmen to sign on the dotted line to assume this debt? How sad is that? As I’ve said over and over on this blog – the entire student loan system in America needs to be overhauled.
Your comment about no one complaining when the loan is issued is also out of place for this discussion as per the blog entry. I – and many others – are grateful for NJHESAA giving us student loans. No one questions that the service is needed (and no one ever has – at least not on this blog). But I guess talking points are talking points, right?
Finally, your comment about the credit report is also incorrect. NJHESAA refused to contact the reporting agencies when I spotted the error nearly three years ago. They suggested that a certain timeframe had passed where, even if they did contact the agencies, the blemish would remain on the report (I found the mistake a few months after they made it). To NJHESAA’s great credit, they fully admitted that they made a mistake and apologized profusely for it, but they wouldn’t contact the reporting agencies due to the timeframe. Aggravated, I contacted the three major reporting agencies at different points over the last two and a half years and submitted disputes on NJHESAA’s mistake and each agency removed the false late payment based off of my submissions.
Again, your experience seems to be different than mine and I’m glad that you had a wonderful experience with NJHESAA. Mine was not so great.
Thanks again for the comment and best of luck.
Joe
I’m not sure I understand the point of Mr. Eggshin’s comment? Was he trying to share his personal experience? Was he trying to share the experience of his friend, Mr. Baconelbow? I do realize he’s a huge wrestling mark as I haven’t seen a name this kayfabe since Dolph Ziggler, so at least that’s good.
Since I have never had to deal with student loans in the state of NJ, nor have I had the “pleasure” (you talk about sarcasm, Joe!) of dealing with the NJHESAA (doesn’t it feel like there needs to be another letter somewhere in there?), I can’t discuss the details of the post. However, having known Joe and his situations for years, and considering the points he made in the entry, I think it’s hilarious that someone actually created an ECW on Sci-Fi character’s name and posted a defensive comment. If that wasn’t funny enough, let’s look at the actual comment.
So these people can’t go online because they’re funded by the state and have to stay within budget, huh Mr. Eggshin? Perhaps you should direct them to UsableWebSolutions.com, where their brilliant owner can provide them with a plan so cheap and a design so good that the word budget won’t even be necessary. Heck, I might volunteer to create the design. There’s absolutely no excuse for an organization with the stature of NJHESAA not to be online in the year 2009. Absolutely no excuse!
As far as the credit dispute goes, while I don’t know details, I do know this — if all three reporting agencies agreed to Joe’s dispute without NJHESAA contacting them to authorize it, this means he’s not the first person to complain, and that the agencies probably have Mr. Eggshin’s employer (c’mon, it’s obvious!) somewhere on some bad list…
Finally comes my favorite line of this pure comedy:
I know people like to complain about repaying loans, but I guarantee you that no one complained when the loan was disbursed and the student was able to go to school.
This is classic. I can’t even put into words how great this line is. So people giving out student loans are doing us a favor — that’s fine and dandy. I am grateful, much like Joe was when he was given the loan. But you see because most US students get bad advise about their financial responsibilities when it comes to this issue (which was the subtle main point of the post but Core — lovely first name — whose comment had no point other than to say “I like wrestling names and work for NJHESAA,” seemed to miss that), they are unaware of what this “grateful” move does to their future because lenders don’t care. How they’re forced to share an apartment with roommates long after graduation, and how making it into USA Today can be a bitch sometimes. No, loan lenders don’t seem to care about making your life easier once you actually become living life (after college graduation), once you become human and once you step on your feet. Instead, they want to crush you and make you write checks and buys stamps in the year 2009 because, you see, you didn’t complain when they gave you money for college. Apparently, the goal is not to get you through school and make your life easy afterwords as you pay back your debt. And that, unfortunately, was NOT anywhere on your Perkins Promissory Note, was it Joe?
Not at all.
My husband has a NJCLASS loan and we hate it. While we were over in Japan (USAF) they would send the statement out two weeks before it was due. There is no way a letter can get from NJ to Okinawa, Japan and then back to NJ with a check in it on time. We tried to change the due date and tried to get his statement out earlier but they said that it was computer generated and they could not change it. To top it off they reported that he had 3 loans out with them when he only had one. The other two ghost loans were reported as over 6months to a year over due. Glad to know that we’re not the only ones fighting with their hour long call wait time.
I’ve had some really bad experiences with NJHESAA as well. Basically, I pay to have my credit report monitored every month by Experian to make sure they’re reporting my payments and keeping my correct address on file.
The whole lack of online payments/account management thing is absolutely inexcusable, but I’d expect nothing less from something run by the State of NJ.
I actually once got them to direct me to some sort of online third-party payment gateway (after the mandatory two disconnects and 45-1hr on hold), but much to my amazement, the only credit card they *didn’t* accept was Visa. Fantastic.
Hey Tom,
Thanks for the comment. I thought I’d offer a few notes.
– It’s terrible that you have to monitor your credit just to ensure that NJHESAA isn’t reporting the wrong information. There’s more money that you have to spend each month that could/should be better applied paying down student loan debt.
– NJHESAA actually just added online payments and account information…but you have to pay extra for the online payments! Since I know NJHESAA reads this blog let me send them a brief message – we know that you are charged every time someone makes an online payment via a credit card or an online check, but that’s the cost of doing business! If you’re not prepared to take the 2% – 3% hit on each online payment, then you shouldn’t offer the service.
– Also, the NJHESAA is the wrong name for this organization because it is a private loan agency, not a government entity. For years I thought that I was battling with the State of New Jersey and turns out that it’s actually a private organization that accesses bonds through state issues. In other words, it’s supported by the legislature which SHOULD require it to be a government entity and operate the same way that other government programs operate.
It appears that the frustration among NJHESAA borrowers continues…
Not to mention . . . when you do have a problem and need to contact them you either get a busy signal or are put on hold until an automated message tells you “we are experiencing high call volumes, leave a message in the general mailbox or call back later”. BTW no one ever returns your call if you leave a message!!!
I understand Misty’s issue. It is no better within driving distance. I mail my payment a distance of about 30 miles from my home to Newark, New Jersey, upon receipt of my statement. My payment should be applied within two days time, however, it always takes seven to ten days before it is applied. I assume interest is accruing at the higher principle until payment is applied. Very convenient.
Joe, you still cannot make monthly payments online in the amount you choose when you choose. You can only create an automatic flat amount on a specific date (which doesn’t give you any flexibility) or pay by credit card at a fee.
My daughter is just finishing her freshman year. I’ll be looking for more transparancy and better accountability in future loans.
I’m not about to defend HESAA, they’ve got their problems and it’s rather sickening. However, I am going to attack your position that interest rates are too high – they are not too high. In fact, student loan rates are too low.
Thanks to low rates and government subsidies, people who will never have the ability or intention of repaying their federally-guaranteed student loans (and believe me, their are many that default, seek reinstatement, borrower more and never plan to repay) can obtain loans at low-rates and a free education at the expense of tax-payers. Because banks know they are going to be repaid by the government, they can make lousy credit decisions with little or no due diligence. And since schools know their applicants will all have the money to pay whatever they charge, they continue to inflate the costs education, which hurt all student-borrowers (and their foolish co-signers). Schools have also lowered academic standards to increase enrollment. So, the market is flooded with people who are very nearly functionally illiterate, but have a college degree making them virtually indistinguishable from those who are truly qualified thanks to their professionally-prepared resume – but I digress.
Low rates and government subsidies have introduced moral hazard into the lending system that ultimately transfers all the risk and none of the reward to the taxpayers while schools and lenders continue to reap enormous profits. Then, upon graduation, we see student-borrowers with massive debt, high unemployment and no way to repay. As you well know through your experiences with HESAA, their is very little a borrower can expect in the way of assistance in the event of hardship.
Perhaps if money was a little harder to obtain, we wouldn’t see so many students agree to attend school programs that will cost $80,000.00 in a career field that will likely never pay them more than $40K.
It’s easy to blame the schools and the lenders, clearly they are the charlatans in all this, but I prefer to blame the borrowers for trading in their own common sense as they blindly and foolishly buy into (actually, borrower into) the ideal that the costs of education translates into financial success and a better life. This used to be true back in the day when it cost about $1,000.00 per year to go to school and a student could work his way through school. Now, you have would-be teachers with $70K in debt at a time when teachers’ salaries are getting hammered and unemployment in the field is skyrocketing. Who is to blame for a situation like this, the charlatan lender and price-gouging school or the idiot who agreed to take on the burden of this debt load?
Thanks to low rates, and the call for lower rates, we’ll only see more of this. The only victims are the taxpayers who want nothing to do with your schooling.
I was referred to HESAA from a friend of my mothers who had recently graduated. At the time I was 18 years old and thought that they were a good choice, I also falsely believed that they were a federally run program–not private. Coming from a family that offered me no financial help or support I did everything on my own and made a lot of mistakes along the way, but I have to say, choosing HESAA was the biggest one.
In May of 09′ I graduated into a massive amount of debt. I currently am working a full-time job making $11.50 an hour and am struggling to get by. I can’t find a job that is willing to pay me anything half-way decent and because of this applied for an Economic Hardship–to which I was denied. I went on to try to defer my payments but was told the only option I had was to pay the quarterly interest- $1700 every 3 months!
I tried to consolidate my HESAA loans with Chase or Wells fargo- (the only 2 banks that consolidate these types of loans) but apparently both are either not consolidating to NJ residents or are not offering consolidation at all.
Needless to say Im at a total loss and I really don’t know how I’m ever going to get by. HESAA hasn’t offered any advice and when I explained my situation I was told,”You have co-signers don’t you?”….
Hey SICKTOMYSTOMACH,
Unfortunately, your story is all too common. And it’s not just NJHESAA that sticks it to folks like you who are in dire economic straits, but it’s all private student loan companies. That’s why there is such an uproar right now over private student loans. You should head over to the Project on Student Debt (http://projectonstudentdebt.org/index.php) to see what they’re doing to fight the practices of these organizations.
Oh, and NJHESAA’s suggestion that your co-signers should be picking up your slack show how out of touch with reality they really are. Look, I work in finance and I know that if you have a co-signer, they are legally obligated to make the payments. However, I also know that if you have a Borrower who is struggling and they actively reach out to you for help, then you work with that Borrower. The Borrower that you go after is the one that doesn’t call, doesn’t reach out, and doesn’t ever send a check. Good for you for reaching out to NJHESAA to try to work with them. And shame on NJHESAA for not finding a suitable solution for both you and them.
Good luck,
Joe
I have been trying for weeks to correct an error I made on the HESAA online form. I have faxed and certified mailed everything they requested…and then some. This is a $7K silly, understandable mistake. I am now being denied a second year of a STARS scholarship…and the denial has nothing to do with grades as last years average was 4.0!
In an effort to directly rebuke the silliness of “Core Eggshins” (what a stupid, fake name) comment above, let me direct all of your attention to this entry:
http://www.jerseysmarts.com/2010/11/03/update-wheres-my-4300-student-loan-check-day-15/
The e-mail I sent here was to that near-useless e-mail address that Eggshins suggested. I received no response.