Students Confront Sallie Mae Shareholders

Timothy Bidon Jun 6, 2013

About one hundred students and activists marched through the blazing sun to the entrance of the Sallie Mae headquarters in Newark, Delaware in the hopes of entering the Sallie Mae shareholder meeting and voicing their experiences, stories and grievances about the student loan industry.  At first glance, it was a rag-tag group, people from as far away as Colorado, people of all different ages, genders and ethnicities, but something united them all: student loan debt.

For this group, it was time to stand up to the loan giant Sallie Mae and demand a discussion about the crushing student loan debt in this country, which has recently surpassed the $1 trillion mark. In fact, student loan debt in the United States now surpasses credit card and automobile debt. But despite these startling statistics, interest rates on new federal Stafford loans are set to double from 3.4 to 6.8 percent if no preventative Congressional action is taken by July 1. The sense of urgency is very real for students graduating into a poor job market with loans, sometimes reaching well into six-digit figures that need to be paid back.

The action was organized by a number of student and social justice groups, including the Student Labor Action Project (SLAP), Jobs With Justice (JWJ), and the United States Student Association (USSA.) Some students had bought shares in the company so they could enter the meeting and voice their grievances, while the remainder of the group sat outside in solidarity protesting against the greed of the company. While the shareholder meeting was in progress, a number of students shared their stories with the group. Not only did they share the amount of debt they were in, but also their visions for the future of higher education.

Layla Soyla is a student from New York City who is currently pursuing a graduate degree from City College, she is also affiliated with SLAP, JWJ and USSA. “I have $19,000 in debt from undergrad, about $3,000 of that is interest that’s accrued, and I have $49,000 from grad school,” said Soyla, “The grad school loan is fixed at 6.8% interest, and the undergrad is fixed at 3.7%.”

Soyla expressed her feelings that she had been lied to by the institution of higher education: “They push these massive loans and this false idea that by going to a 4-year school you’re going to come out a great person with a great education and an ability to be a part of the middle-class.” 

But instead of becoming a part of the middle class, many graduates are instead left with no source of income and unrealistic payment plans, much like Yolin Kawakami. Kawakami was not associated with any group and her attendance at the action was spur of the moment: “As much as I debated not coming because it was so early, I really wanted to stand for something. I don’t want to stand for nothing, because this will just continue. Even if it’s a small dent we make, it’s something,” she said.

Kawakami and her husband graduated alongside one another, both accruing $60,000 of debt each. She now struggles with finding employment and a loan repayment plan that is entirely unrealistic.

“They don’t really break down payments for you when you graduate. They tell you it’s affordable, but then when you graduate and they talk to you about payments, it’s $700 a month. That’s for one person. I don’t think that’s actually affordable, that’s the rent right there,” said Kawakami.

Sara Fitouri is a law-student at the University of Denver. With both her undergraduate and graduate debts combined, she now owes $145,000. She expressed her fear that people are forced into jobs they are unhappy with because of the pressure to repay these massive debts: “I see students taking jobs that they, ethically, don’t believe in. It’s not how they want their communities to be run, but they’re forced into it,” said Fitouri, “So, we tell students they have to go to college. Then we tell them they have to work for the rest of their lives and still be in debt, and in a lot of ways, that is indentured servitude, with respect to the suffering that a lot of other communities have gone through.”

The group hoped to voice all these grievances to Sallie Mae and joined the American Federation of Teachers in calling for more transparency on the part of the company. 

“In terms of Sallie Mae, we’re looking for transparency, they shouldn’t be a part of U.S. education loans at all. But if they are, they definitely should be totally transparent, and making minimal profit off of it,” said Soyla, “I firmly believe that education is the current ponzi scheme for Wall Street.”

Fitouri echoed these sentiments, saying, “Corporations like Sallie Mae are driving up tuition costs. They are lobbying to keep tuition high, they are lobbying to keep state and federal funding out of higher education, and by doing so they are making it so that a large portion of society will never have the opportunity that I had, and the one’s that do are going to be, like me, paying off the debt for the rest of their lives, and not actually getting to work for a better society.”

But, despite the dire conditions, the students have been making progress. Some of the activists had the chance to meet with U.S. Secretary of Education Arne Duncan, and though he refused to cut the government’s contract with Sallie Mae, he did urge the company to talk to the students.

And when the students came out of the shareholder meeting, they had successfully negotiated a meeting with the new CEO of the company, John Remondi. 

Jishava Patel is a student at the University of Massachusetts at Amherst, and she was one of the students to enter the shareholders meeting. “We did get them to agree to meet with us within the month, and that’s huge because last year there were 36 people arrested,” said Patel, “So this was a huge victory for us.”

Patel also expressed hope for the future, saying, “We definitely got to a lot of the shareholders and made them realize what the issues are with Sallie Mae and the way they handle their business, so we’re definitely making a lot of progress, and we can hope to see some results soon.”

There are also some initiatives being talked about in the House and Senate regarding student loan reform. While Senator Elizabeth Warren’s one-year-fix proposal that would give new buyers in federal student loans interest rates comparable to those of banks has been stirring up controversy in the press, Representative Karen Bass’ Student Loan Fairness Act has been introduced to the House with little media coverage, despite the fact that it is more radical and comprehensive.

The plan works on a “10-10” system where, upon graduation, students pay 10 percent of their discretionary income for 10 years, at which point, if their loans are not paid back in full, their debt will be forgiven. 

The bill still currently is sitting in the Education and Workforce Committee of the House. But as the debt mark continues to rise, action needs to be taken now.

“The students need help. The students need to be bailed out. It’s not ethical, it’s not justice, and any oppression is oppression that needs to be fought,” said Fitouri.

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