The Power of The Internet - Sallie Mae's Mea Culpa Phone Call - How to expedite your IBR application

On March 10th, I wrote a post about how Sallie Mae failed through an IBR application by increasing our monthly payment $53 without telling us and what it took for us to correct it. I shared my post on Google+, Facebook, and even tweeted +Sallie Mae with the hashtags #IBR and #Fail. In less than 48 hours, we received a call from Jennifer Margary Operator ID# E58941 from Sallie Mae to apologize, right the situation, and explain what happened.

Jennifer was an absolute delight, and an optimal customer service / account representative who was courteous, prompt, and pleasant to talk to. When she called, she explained the call could/would be recorded for customer service and training purposes. It turns out that she was calling because Sallie Mae found my post ( #poweroftheinternet ) and wanted to follow up with the account.

So here's what happened:

Jennifer explained that the payment processing department is overwhelmed with IBR applications which might be why it took more than two months to process. Considering all submission was done electronically, and having had 3 years working in a HR transaction processing service center, I have a hard time believing it would take 2 months. Jennifer then explained that the IBR application should NEVER HAVE BEEN PROCESSED because it resulted in a higher monthly payment and that it was totally Sallie Mae's fault.

Here is the interesting thing and for what all of you who have or will have student loans as well as your spouse need to know: you must wait until both of your loans are in repayment to get the benefit of an IBR plan. Which in our case will be in June.

Now, Jennifer could have ended the conversation there and moved on with her day, but here is what really made her stand out as my best experience with Sallie Mae to date; she took the time to look up our IBR application and calculated that my wife's loan payment would be approximately $70-75 per month when my loans go into repayment. Then, even though my loans are not serviced by Sallie Mae, she calculated that my loan payments would be about $190 per month through IBR based on the information she had! This information was helpful, but considering the two month lag between IBR application and processing, I wanted to know how to expedite the process. Jennifer came through like a champ and delivered. When my loans go into repayment, she told me us to

1) go the the nslds.ed.gov website to give Sallie Mae loan holder access to my account information
2) Submit another IBR application
3) To call the secret Sallie Mae number 1-888-545-4199 and that one of the six operators could help get the applications routed priority to the processing department and that it should be processed within two business days.*

* If the application is processed at least 2 days before your next payment is due, the lower IBR payment will be what is due for that month.

Jennifer also confirmed that our account was being erroneously charged an extra 0.25% and cancelled the additional accrued interest and restored our interest rate to 5.125%

I gave Jennifer other feedback about the lack of transparency on Sallie Mae's website regarding IBR and the lack of calculators; as well as making sure that this error could be a training opportunity. She respectfully noted down my suggestions and we ended the call.

Most customer service experiences we hear about are negative, especially when dealing with creditors. I hope when +Sallie Mae finds this post, Jennifer is recognized for how excellent she was.

Student Loan IBR Fail - Sallie Mae Edition

Here's how signing up for and cancelling an IBR application through Sallie Mae cost $5, but saves $2.84 per month:

My spouse has student loans that we have been paying been since 2005 (only $23,000 to go!). Shortly after getting married, I decided to go back to school to get my Master's which I just completed back in October. We got to put off repaying my loans six months from graduation in December to this June 2014. As we started to receive information about repaying my loans, I got a little bit excited and did a little research on some repayment options and we like the Income Based Repayment (IBR) plan. The calculators are very exciting and they illustrate how much you can save on your monthly payments. So I input the balance my wife has on her loans, and my balance ($63,000), and our dependent information, and it seemed like a manageable amount; my wife's payment would go down from $208.41 to about $80 according to this calculator and my payment would be $220, for a total of about $300 per month.

Keep in mind the standard repayment for my loans alone would be about $725 as calculated here.

Knowing that I will be in public service for at least the next 10 years, I feel pretty good about under paying the loan because the balance will be forgiven as part of the William D Ford Public Service Loan Forgiveness plan after 120 consecutive payments; so keeping my payments as low as possible is of the utmost importance.

Back in December, my wife and I filled out an IBR application through StudentLoans.gov which grabbed our information from the IRS and sent it to my wife's loan provider Sallie Mae. Maybe I needed to wait until we started repaying my loans in June before sending in an IBR application because here is what happened:

Sallie Mae finished processing our IBR application in February (almost two months after submitting the application). Sallie Mae did not offer a chance to approve or disapprove the terms of the IBR, but changed our payment from $208.41 to $263 and upped the interest rate 0.25%. Paying more for something that gives you zero extra utility is not the best financial practice.

So we called Sallie Mae so ask what's going on. After less than helpful information, they offered to postpone payments until May while they processed an income sensitive application which they emailed to us. That also would not work because postponing payments would eliminate the years of consecutive payments we had been making toward the balance.

We called today to restore payments on the account without the two month postponement and asked to have the payment amount reverted to $208.41. After the representatives first attempt, our $261 payments would be reinstated for this month. After explaining that was not what we wanted, the representative said that they could cancel the IBR application for $5. So I asked what the new payment amount would be and what our interest rate would be. The representative said our new payment would be $205.57 and our interest rate would be restored to the original interest rate. So it cost $5 to save $2.84 per month? Deal.

We'll have to wait and see what IBR will actually make our payments in June, but we will be laughing and taking our $3.52 net all the way to the bank.

What are your IBR experiences? I'd love to hear about them. Happy Saving!