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Texas attorney general targets San Antonio student loan forgiveness company



San Antonio’s My Education Solutions has touted that it has saved more than 2,000 clients some $150 million in student loan debt, allowing them “to live the life they dreamed of.”

Texas Attorney General Ken Paxton has a much different take on My Education Solutions, alleging in a lawsuit that it charges what amounts to thousands in fees for loan-forgiveness services that are available for free elsewhere.

“Consumers end up paying more money on their student loans and face the possibility that their loans will not be forgiven at the end of the term due to MES’ deceptive practices, which include failing to pay the consumers’ student loans,” the suit alleges.

The state seeks more than $1 million in penalties, consumer reimbursements and attorney fees from MES and its CEO and president, Christina Randell. The action was filed Friday in state District Court.

The state also seeks injunctions preventing MES from destroying books and records, making any unauthorized withdrawals from consumers’ bank accounts and engaging in deceptive advertising, among other activities.

A call to Randell was not immediately returned Wednesday, and the attorney general’s office did not respond to an email seeking comment.

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Randell previously operated Texas Debt Free Angels, a credit repair company. In 2014, it was issued a cease and desist letter from the Texas Office of Consumer Credit Commissioner for operating a debt-management service without registering with the state. MES also is required to register with the OCCC but has failed to do so, the suit says.

MES, which calls itself a “national consumer advocacy organization,” has received an “F” from the Better Business Bureau — the bureau’s lowest rating. The BBB also issued an alert, saying it was unable to substantiate several advertising claims about how much MES saved consumers. The BBB says information provided by MES showed that some consumers had “negative total savings on their student loans after enrolling” with MES.

In the lawsuit, Paxton targeted MES’ claim that consumers typically receive a 70 percent reduction in student loan debt.

“When asked how Randell arrived at that figure, she replied that it was calculated from her database and that some consumers could receive less than a 70% reduction,” the suit says. “Randell also claims that MES saved consumers over $100 million between October 2015-2016, but has no concrete proof to back that figure up.”

MES also told consumers there was no cost to enroll, but charged a $199 one-time enrollment fee and a $49 monthly “maintenance fee,” the suit says. Enrolling in the program will cost a consumer more than $6,000 in fees over 10 years, though some loans can take up to 25 years to pay back.

Repayment programs may be based on a consumer’s income, the suit says, so it’s possible a consumer may owe nothing for years. Yet MES will still charge a consumer the $49 maintenance fee to “submit” a “$0 payment,” the complaint adds.

The U.S Department of Education offers various programs to help borrowers with federal student loan debt, the lawsuit notes. They include the Teachers Loan Forgiveness Program and the Public Service Loan Forgiveness Program. Borrowers can apply through and there are no fees, the suit says.

“Loan forgiveness eligibility requirements and payment levels under income-based repayment plans are set by federal law, therefore special deals cannot be negotiated or obtained by borrowers or debt relief companies,” the suit adds.

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The lawsuit cites a consumer who paid a one-time fee of $99 to enroll in a loan forgiveness program. The consumer made three monthly payments of about $280 even though his first payment wasn’t yet due.

In addition, the suit says, MES did not pay the consumer’s loans on time, resulting in the account being marked delinquent by the loan servicer. The consumer later terminated his contract with MES, but the suit says it refused to refund the payments that were not applied to his loans.

Late payments may negatively affect consumers’ credit score, the suit says.

Another consumer, a teacher, says she discovered that MES had requested a forbearance on loan payments on at least three occasions — even though she never authorized them to do so. MES continued to take her money during that time, according to the lawsuit.

A former MES employee provided a printout to the attorney general’s office that indicated on one account a consumer had made 12 payments on his loan but only six of them were counted as part of the program he paid MES to enroll him in, the suit says.

The state is suing MES for violations of the Deceptive Trade Practices Act, failing to register with the OCCC and misrepresenting the benefits of its services, among other claims.

MES has not yet filed a response to the lawsuit.

Patrick Danner is a San Antonio-based staff writer covering banking and civil courts. To read more from Patrick, become a subscriber. | Twitter: @AlamoPD

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Are Sallie Mae Student Loans Federal or Private?



When you hear the name Sallie Mae, you probably think of student loans. There’s a good reason for that; Sallie Mae has a long history, during which time it has provided both federal and private student loans.

However, as of 2014, all of Sallie Mae’s student loans are private, and its federal loans have been sold to another servicer. Here’s what to know if you have a Sallie Mae loan or are considering taking one out.

What is Sallie Mae?

Sallie Mae is a company that currently offers private student loans. But it has taken a few forms over the years.

In 1972, Congress first created the Student Loan Marketing Association (SLMA) as a private, for-profit corporation. Congress gave SLMA, commonly called “Sallie Mae,” the status of a government-sponsored enterprise (GSE) to support the company in its mission to provide stability and liquidity to the student loan market as a warehouse for student loans.

However, in 2004, the structure and purpose of the company began to change. SLMA dissolved in late December of that year, and the SLM Corporation, or “Sallie Mae,” was formed in its place as a fully private-sector company without GSE status.

In 2014, the company underwent another big adjustment when Sallie Mae split to form Navient and Sallie Mae. Navient is a federal student loan servicer that manages existing student loan accounts. Meanwhile, Sallie Mae continues to offer private student loans and other financial products to consumers. If you took out a student loan with Sallie Mae prior to 2014, there’s a chance that it was a federal student loan under the now-defunct Federal Family Education Loan Program (FFELP).

At present, Sallie Mae owns 1.4 percent of student loans in the United States. In addition to private student loans, the bank also offers credit cards, personal loans and savings accounts to its customers, many of whom are college students.

What is the difference between private and federal student loans?

When you’re seeking financing to pay for college, you’ll have a big choice to make: federal versus private student loans. Both types of loans offer some benefits and drawbacks.

Federal student loans are educational loans that come from the U.S. government. Under the William D. Ford Federal Direct Loan Program, there are four types of federal student loans available to qualified borrowers.

With federal student loans, you typically do not need a co-signer or even a credit check. The loans also come with numerous benefits, such as the ability to adjust your repayment plan based on your income. You may also be able to pause payments with a forbearance or deferment and perhaps even qualify for some level of student loan forgiveness.

On the negative side, most federal student loans feature borrowing limits, so you might need to find supplemental funding or scholarships if your educational costs exceed federal loan maximums.

Private student loans are educational loans you can access from private lenders, such as banks, credit unions and online lenders. On the plus side, private student loans often feature higher loan amounts than you can access through federal funding. And if you or your co-signer has excellent credit, you may be able to secure a competitive interest rate as well.

As for drawbacks, private student loans don’t offer the valuable benefits that federal student borrowers can enjoy. You may also face higher interest rates or have a harder time qualifying for financing if you have bad credit.

Are Sallie Mae loans better than federal student loans?

In general, federal loans are the best first choice for student borrowers. Federal student loans offer numerous benefits that private loans do not. You’ll generally want to complete the Free Application for Federal Student Aid (FAFSA) and review federal funding options before applying for any type of private student loan — Sallie Mae loans included.

However, private student loans, like those offered by Sallie Mae, do have their place. In some cases, federal student aid, grants, scholarships, work-study programs and savings might not be enough to cover educational expenses. In these situations, private student loans may provide you with another way to pay for college.

If you do need to take out private student loans, Sallie Mae is a lender worth considering. It offers loans for a variety of needs, including undergrad, MBA school, medical school, dental school and law school. Its loans also feature 100 percent coverage, so you can find funding for all of your certified school expenses.

With that said, it’s always best to compare a few lenders before committing. All lenders evaluate income and credit score differently, so it’s possible that another lender could give you lower interest rates or more favorable terms.

The bottom line

Sallie Mae may be a good choice if you’re in the market for private student loans and other financial products. Just be sure to do your research upfront, as you should before you take out any form of financing. Comparing multiple offers always gives you the best chance of saving money.

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Tips to do some fall cleaning on your finances



Wealth manager, Harry Abrahamsen, has five simple ways to stay on top of the big financial picture.

PORTLAND, Maine — Keeping track of our financial stability is something we can all do, whether we have IRAs or 401ks or just a checking account. Harry J. Abrahamsen is the Founder of Abrahamsen Financial Group. He works with clients to create and grow their own wealth. Abrahamsen shares five financial tips, starting with knowing what you have. 

1. Analyze Your Finances Quarterly or Biannually

You want to make sure that your long-term strategy is congruent with your short-term strategy. If the short-term is not working out, you may need to adjust what you are doing to make sure your outcome produces the desired results you are looking to accomplish. It is just like setting sail on a voyage across the Atlantic Ocean. You know where you want to go and plot your course, but there are many factors that need to be considered to actually get you across and across safely. Your finances behave the exact same way. Check your current situation and make sure you are taking into consideration all of the various wealth-eroding factors that can take you completely off course.

With interest rates very low, now might be a good time to consider refinancing student loans or mortgages, or consolidating credit card debt. However, do so only if you need to or if you can create a positive cash flow. To ensure that you are saving the most by doing so, you must look at current payments, excluding taxes and insurance costs. This way you can do an apples-to-apples comparison.

The most important things to look for when reviewing your credit report is accuracy. Make sure the reporting agencies are reporting things actuary. If it doesn’t appear to be reporting correct and accurate information, you should consult with a reputable credit repair company to help you fix the incorrect information.

4. Savings and Retirement Accounts

The most important thing to consider when reviewing your savings and retirement accounts is to make sure the strategies match your short-term and long-term investment objectives. All too often people end up making decisions one at a time, at different times in their lives, with different people, under different circumstances. Having a sound strategy in place will allow you to view your finances with a macro-economic lens vs a micro-economic view. Stay the course and adjust accordingly from a risk and tax standpoint.

RELATED: Financial lessons learned through the pandemic

A great tip for lowering utility bills or car insurance premiums: Simply ask! There may be things you are not aware of that could save you hundreds of dollars every month. You just need to call all of the companies that you do business with to find out about cost-cutting strategies. 

RELATED: Overcome your fear of finances

To learn more about Abrahamsen Financial, click here

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How to Get a Loan Even with Bad Credit



Sana pwedeng mabura ang bad credit history as quickly and easily as paying off your utility bills, ‘no? Unfortunately, it takes time. And bago mo pa maayos ang bad credit mo, more often than not, kailangan mo na namang mag-avail ng panibagong loan. 

Good thing you can still get a loan even with bad credit, kahit na medyo limited ang options. How do you get a loan if you have bad credit? Alamin sa short guide na ito. 

For more finance tips, visit Moneymax.



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