One of the great things about the digital age is the ability to automate certain aspects of one’s life. For example, I recently began automating my United States Department of Education (USDOE) student loan payments. Beginning on March 28th and on the 28th of each month thereafter, an automatic debit will be taken from my bank account to make this payment. I’ve budget for it, I have it set to go, and it’ll all be done automatically. Perfect.
The USDOE has figured out how the system is supposed to work. There’s no hassle, no aggravation, no fees for the online payment service, and they even offer an incentive to use the automated system. This incentive comes in the form of a 0.25% interest rate reduction. That’s some pretty good customer service and the USDOE deserves credit for doing the right thing by its borrowers.
And then you have the New Jersey Higher Education Student Assistance Authority (NJHESAA). Ugh… These profit-focused folks just don’t get it.
The NJHESAA recently instituted an online payment portal, too. Sounds good, right? Well, not so fast! Not only is there no incentive for the borrowers to use the system (i.e. no interest rate reduction), but there is a fee for using the service! And not just a small fee, a 2.5% fee! How disgusting is that?!
Think about that fee in action. I just sent a $2,000 check to the NJHESAA. If I opted to make that payment online, that would have resulted in a total charge of $2,050. I’m sorry, but that’s just unacceptable. And I’m sure that the NJHESAA’ers that troll this blog are thinking to themselves, “Hey! We get charged to offer those online services. There is a cost to process payments online due to merchant fees and other fees charged by the credit card companies. This guy clearly doesn’t know what he’s talking about.”
Having dealt with the NJHESAA over the phone I know that they typically think their borrowers aren’t as intelligent as they are when it comes to, well, pretty much anything. So since I know that the NJHESAA folks are likely reading this and that they are likely thinking what I wrote above, let me remind them of a few business basics. First, there is a cost to doing business. The NJHESAA’s cost for offering the online payment system is being charged the various merchant fees associated with credit card and other payments. Since the NJHESAA isn’t in the business of selling retail products, it can’t raise the price of its goods to cover this fee. Instead, if the company wants to offer this feature, it has to absorb the cost.
Second, this company couldn’t try any harder to project a money-grubbing public image. Sure, they can get away with continuing to sell their services to unsuspecting new borrowers. However, with a growing chorus of voices like mine who aren’t necessarily focused on “exposing” anything, but instead are focused on educating younger generations on what getting a loan from the NJHESAA really means, I wonder how long they’ll be able to operate in their profit-first, borrower-second mindset.
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And to think, all the NJHESAA needed to do in order to avoid this particular entry of negative press was take their focus off of profits and put it on the needs of their borrowers. All they needed to do was absorb the cost of doing business instead of passing on that fee to their borrowers. But they just couldn’t do it. They just couldn’t focus on what was best for their borrowers because they were blinded by their bottom line.
For shame.
Your complaint about HESAA’s fee for rendering payment online is without merit. The payment is made through OfficialPayments.com, which is a third-party site. the 2.5% fee is their fee, not HESAA’s fee. HESAA does not get any portion of that fee.
HESAA is problem-laden from top-to-bottom. You picked the one gripe that is not HESAA’s fault.
It’s the cost of doing business for a private company. If they want to offer the online payment service, they should absorb the fee.
HESAA is state funded. Do you want to approve the costs and bear the resultant tax burden? Go ahead and pressure your state lawmaker for a referendum.
I doubt you’ll need to fight to make room on that bandwagon.
NJHESAA is state funded in that the state passes tax exempt bonds to provide capital to make student loans. NJHESAA, though, is an independent, private organization that operates independently of the state (much like the New Jersey Redevelopment Authority and the New Jersey Economic Development Authority). In other words, unlike a state entity, NJHESAA’s bottom line is not driven by alleviating some social pressure for the citizens of the state or filling some gap in state government – it’s driven by money. It’s in the fine print – read their audits.
And the fact is that the 2.5% merchant fee that is assessed by the online payment system is a cost of doing business. Every private company in the United States gets charged a similar fee, but you don’t see a line item on your receipt after each purchase that assesses this fee. Some would argue that the 2.5% fee – when not charged directly to the consumer as NJHESAA allows – becomes a sunken cost and I argue otherwise (see: Wal-Mart). It is a fee that the private company pays in order to offer another way for the private company to take in revenue.
Of the many problems that NJHESAA has to tackle, I agree that this ranks towards the middle or bottom of the list. However, in the year 2010, NJHESAA really ought to cut into its profit to pay for this fee instead of passing it directly to their borrowers and, ultimately, negating their ability to effectively use this payment function.
Yes, the source of the funds for the loans are through the sale of tax exempt bonds, but HESAA’s employees are state employees and it’s costs to administer loan servicing are funded by the state of New Jersey.
I completely agree their use of a third party site to process on-line payments is absurd. Such a system worked well in, oh, 1996. It’s not difficult or very expensive to develop their own system – it’s old technology these days. However, if they are going to use a system that charges some processing fee, I would prefer the users pay that fee instead of someone like me who me who neither uses nor benefits from the service. Basically, you’re insisting that HESAA not pass off the costs to you and pass them off to tax payers instead. I don’t see how that’s fair.
Personally, I think borrowers are insane for using their online payment method. Set up a bank account, use it to have payments drafted automatically through their automatic debit (not your bank’s automatic bill pay) and save yourself the costs of doing business altogether while taking advantage of a system that more quickly and more accurately posts payments to your account. Instead of having your payments posted manually each month and risking human error with each posting, the automatic draft is hands off and reduces the risk of posting errors and delays to about zero., Plus, if I’m not mistaken, their NJ Class loans that were approved within a certain date range that spans several years receive an interest rate discount as long as the borrower is enrolled in the automatic debit. So, it’s free, there’s a potential interest rate discount, and no one touches your payments resulting in virtually no posting errors. Why are you paying with credit card online again?
I don’t use the online payment system because of the discussion in the entry above. And I think it’s clear that my suggestion is NOT that taxpayers share in the burden of the 2.5% fee, but that NJHESAA cut into its annual profits to pay the fee if/when the online system is used just like any other private organization. Or… they wind up offering a “form of useless help” like we’ve described here.
Where can I write a letter about HESAA? I think its absolutely ridiculous that you can’t possible get through to anyone over there!! If you leave a message, no one ever gets back to you. I can’t even access my information via the website because if you have a defaulted student loan, guess what? Defaulted loan information cannot be accessed through the site. I really don’t care if the government or the state of NJ runs HESAA, I think we are still entitled to some decent service!!! They are a business providing a service just like any other and we the “customers” should be able to get through and speak to someone!! I have had it and quite frankly don’t know why this is the only forum I found where people complain/talk about HESAA. Is there any way I can transfer out of HESAA? Pay my defaulted student loan with anyone else? It shouldnt be the end all of my options!!
I am extremely frustrated with them! Someone please help!!! and Provide some information/advice!!
Thank you
OMG….I thought I was the only one experiencing hell with the HESAA. I have tried for the last two weeks to call them. There is absolutely no response. I waited 48 minutes one day…I am averaging a 30 minute wait each time before I have to hang up. I have left messages.
Does anyone know how to get a hold of these people? They are wrecking havoc with my excellent credit rating. I overnighted a check to them and I have not seen it posted yet. Then they say …oh you are late.
The most pathetic incident…a letter we received today dated March 1…”This is in response to your recent request to initiate an ACH Automatic Debit for your NJ Class loan. Please contact this office at 1-800-792-8670, Option 3, within 5 business days of the date of this letter or we will assume you are not longer interested in the ACH program.” Are they kidding, today is March 4th when we received the letter…..and why in the world would they not want you to sign up for an ACH…oh, by the way this is the phone number you can’t get anyone to answer.
Anyone out there have a suggestion for these idiots….