A few years ago, if you googled student-loan giant Sallie Mae and the word “lawsuit,” a live-journal blog called Southern Girl Babbling would turn up. Among entries on her job and her hair, music and TV shows, there it was: “Sallie Mae, Kiss My Ass.” The comments section was huge — 50-plus posts and growing daily, mainly with desperate testimony from furious borrowers. The thing became so swollen that Southern Girl finally shut it down. Okay, maybe the last straw came when I asked if I could interview her (see “Sallie Mae Not,” News and Features, November 28, 2003).
But clearly, there was an itch to be scratched here. And now Alan Collinge, of Washington, is doing something about it by organizing the first PAC devoted to reining in the student-loan industry.
Collinge, 36, who speaks with Opie-like earnestness in a cracking voice, studied aerospace engineering in college and grad school and had never before been drawn to politics. “Flying my freak flag for everyone to see,” he says, “is the last thing I thought I’d be doing with my life.” His freak started, he claims, when he fell on hard times and saw his student-loan debt of $38,000 shoot up to more than $100,000 over just four years.
So, in 2005, Collinge created studentloanjustice.org, a clearinghouse of information that, among other things, provides people a place to share their experiences — a service once provided unwittingly by Southern Girl. (Press the “victims” button to read ’em and weep.) Eight hundred stories are already posted. “I have 500 more,” he tells the Phoenix over the phone, “and at least another 500 people have told me about their situations confidentially, too embarrassed and intimidated to tell the world.”
Sallie Mae and others depend on such reticence, he says, as profits soar (Sallie Mae’s stock has risen almost 2000 percent since 1995) and their influence as one of Washington’s top industry lobbies extends to all levels of government.
Last May, Collinge got the attention of 60 Minutes, which ran a segment on the student-loan industry that featured him and his Web site.
Now, with a Democratic Congress back in the saddle for the first time in 12 years, Collinge says there’s reason to be “guardedly hopeful” about the chances of taking down the student-loan racket. But not without continuous prodding.
Where organizations such as the state PIRGs and the New America Foundation seek to influence legislation affecting future borrowers, Collinge’s Student Loan Justice PAC (SLJPAC) wants also to prevent student lenders from gouging those already in the payback phase. “If you have a train wreck,” he says, “you pretty much want to treat the most injured victims first.” SLJPAC will push for standard consumer protections, such as the right to refinance or to include student-loan debt in bankruptcy filings. It will push to allow those in default to repay only the amount the government pays to insure these loans, without the drastic penalties and fees that bloat student lenders to garish proportions. It will also call for an anti-trust investigation of the Department of Education (DOE), which is charged with monitoring student-loan companies, and is a nest of said companies’ former executives, says Collinge, pointing to Theresa Shaw, former senior vice-president of Sallie Mae, who was named chief operating officer of the DOE’s Office of Federal Student Aid in 2002.
