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(URGENT WARNING) Unregulated student loans make fortunes for CEO and screw students

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dajoki Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-16-07 09:15 PM
Original message
(URGENT WARNING) Unregulated student loans make fortunes for CEO and screw students
Please, anyone thinking of doing business with this company, LOAN TO LEARN, think again. I have personal knowledge about this and it isn't pretty. My daughter took a student loan from them about three years ago for nursing school. I even spoke with them because it sounded too good to be true, and it was, but they even fooled me.

The advertisement was no payments until one year after graduation. Well it turned out to be no payments on the PRINCIPLE, she started getting bills for interest payments (12%) after one month, and the interest rates change EVERY MONTH, now up to 15%. Money doesn't get applied to principle 'till after graduation, which she has accomplished (BSN in Nursing). She borrowed around $20,000 to help with her house payments while she was in school and will end up paying back near $100,000. It is a TWENTY YEAR STUDENT LOAN!!

The advertising and phone reps are very tricky, because when I spoke with them I heard nothing like that. We are in the process of seeing if there is anything that can be done about this, so far, no luck. But we are going to keep trying. This is a warning about an evil business and equally evil people who take advantage of those who can least afford it. SO PLEASE READ ENTIRE ARTICLE, I wish I had before my daughter got robbed. Thank You.

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Student Loan Nonprofit a Boon for CEO
Watchdogs Question Spending; Company Touts Benefit to Consumers

By Amit R. Paley and Valerie Strauss
Washington Post Staff Writers
Monday, July 16, 2007; Page A01
http://www.washingtonpost.com/wp-dyn/content/article/20...

<<snip>>

The nonprofit company also has become a financial boon for the accountant, Catherine B. Reynolds, and her family. The McLean-based company bought a Gulfstream jet worth about $30 million that she sometimes uses to fly friends and relatives around the world. It has given more than $9 million to a separate nonprofit company run by her husband and paid her $1 million in annual compensation. And the nonprofit donates millions to her favorite charities, including $400,000 to her daughter's private school.

Loan industry watchdogs question whether the company, EduCap, operates in the best interests of students and should retain its nonprofit status. As a nonprofit, EduCap is exempt from paying federal income tax as long as it claims to be serving a public good. But the company allows some students to borrow up to $50,000 a year, sometimes at 18 percent effective interest rates -- terms that most financial experts urge borrowers to avoid. The Internal Revenue Service has been reviewing the business.

<<snip>>

One Entity, Three Names

The IRS has been reviewing the company's financial arrangements, according to people with direct knowledge of the matter. Under those arrangements, one legal entity, EduCap, operates under three different names: EduCap, the Catherine B. Reynolds Foundation and Loan to Learn, the brand under which EduCap loans money to students.

<<snip>>

Nonprofit Benefits Family

One of the largest beneficiaries of the foundation has been the Academy of Achievement, a separate nonprofit company run by Wayne Reynolds that sometimes directs payments to a for-profit company he runs. EduCap has donated at least $9 million to the academy, which then paid at least $1.7 million to ASC Management Co., a company whose sole shareholder is Wayne Reynolds, tax filings show.

<<snip>>

The operations of EduCap and the Academy of Achievement are intertwined. The companies share the same office space, hold corporate retreats at the same Caribbean resort and lend each other accounting and administrative staff, according to former employees and company records. Wayne Reynolds sits on the EduCap board of directors, and Catherine Reynolds is the vice chairman of the Academy of Achievement's board.



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liberal N proud Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-16-07 09:20 PM
Response to Original message
1. All student loans are a rip off these days
Gone are the days when you took out a loan and didn't pay it back until you were out of school. I don't know how kids do it without the help of parents.
We are currently paying our daughters student loan while she is going to school. When she is done, it will be 60 thousand dollars in debt.
We do this because we have to so they will not get "left behind"
I don't know what we will do when her sister is ready to go.
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OzarkDem Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-17-07 06:03 PM
Response to Reply #1
16. Loans are terrible these days
We're doing the same, and can't find a way to shop for better loans. Any ideas?

I'd like to know what our Dem leaders plan to do.
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dajoki Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-18-07 12:20 PM
Response to Reply #16
17. Do what Purveyor said:
"I've said it before and will say it again. Today, anytime you are about to enter into a loan agreement of a significant amount, plunk down another $100 bucks and have an independent CPA review the loan documents and tell you what you are getting into.
Few, unless schooled in such matters. can interrupt the legalize language on these loan docs."


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Double T Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-16-07 09:26 PM
Response to Original message
2. Most of the financial world is made up of corrupt criminals masquerading...........
as legitimate business people. The ONLY difference is some of the crooks are worse than the others.
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dajoki Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-16-07 11:10 PM
Response to Reply #2
7. And these are the worst kind...
preying on students and their families who can least afford it.
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Double T Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-17-07 03:57 AM
Response to Reply #7
8. Criminals have no morals or boundaries.
Edited on Tue Jul-17-07 03:58 AM by Double T
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Sonicmedusa Donating Member (613 posts) Send PM | Profile | Ignore Mon Jul-16-07 09:56 PM
Response to Original message
3. Thanks for this post
There is very little about "Loan To Learn" on the nets.
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dajoki Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-16-07 10:04 PM
Response to Reply #3
5. Anything I can do...
to get the word out on them, I will do. I don't want to see anyone in the situation we have ended up in because of this "business".
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dajoki Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-17-07 01:06 PM
Response to Reply #3
14. Here are some sights...
Edited on Tue Jul-17-07 01:21 PM by dajoki
http://www.loantolearn.com /
-----------------------------------------------------------------------
Loan to Learn or Bait and Hook?
http://www.newamerica.net/blogs/2006/09/loan_to_learn_o...
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Loan to Learn's Caribbean Junket for College Officials Canceled
http://www.newamerica.net/blogs/2006/10/loan_to_learns_...
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http://www.loan4school.org /
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With most loans, if you make your payment early, you generally take off more from your principle and are OK for the rest of the month. With Loan To Learn, they take daily interest every day between each due date. Here's an example of why this is so bad. Let's say you have a loan of $45,000 with a minimum monthly payment of $430. If you pay your $430 two weeks in advance, part goes to interest accrued between last due date and the time the payment goes in, and the other part goes to principle ...
-------------------------------------------------------------------------
I applied through Bank of America, not "Loan to Learn", so when they called me, I thought they were just trying to sell me something. Finally, I put 2 and 2 together and then called them. They never answer Bank of America. They then asked for my driver's license four times, but never left a message (this was after the "Loan-to-Learn debacle). Then they put me through 34 days (and counting) in processing. Sometimes they tell me the check will be sent out tomorrow, sometimes they can't tell ...
http://www.reviewcentre.com/reviews104839.html
--------------------------------------------------------------------------
http://www.valuemd.com/st-james-medical-school/138876-l...
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Purveyor Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-16-07 10:03 PM
Response to Original message
4. I've said it before and will say it again. Today, anytime you are about to enter into
a loan agreement of a significant amount, plunk down another $100 bucks and have an independent CPA review the loan documents and tell you what you are getting into.

Few, unless schooled in such matters. can interrupt the legalize language on these loan docs.

No, I'm not a CPA drumming up business. Just a word of advice.
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dajoki Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-16-07 10:12 PM
Response to Reply #4
6. Yes, I learned that the hard way n/t
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conspirator Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-17-07 05:53 AM
Response to Original message
9. Welcome to the jungle. I don't even borrow from banks unless I know
I can repay in short term
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PA Democrat Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-17-07 06:25 AM
Response to Original message
10. The corrupt corporate media should be covering THESE types of stories instead of crap like Paris
Hilton. Camp out in front of the homes of these corrupt CEOs to get them to answer questions that no one else seems to want to ask.

What Paris Hilton has done does not affect the vast majority of Americans. What these crooks do, masquerading as legitimate business people, affects millions of Americans.
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dajoki Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-17-07 10:09 AM
Response to Reply #10
11. AMEN!!
My daughter just graduated a few months ago, but she still must wait a full year before payments start to go toward the principle.
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Selatius Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-17-07 11:41 AM
Response to Reply #10
13. They don't do that because it rocks the boat and they believe it "doesn't get ratings"
They would rather continue to shovel you shit and call it news.
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dajoki Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-17-07 11:37 AM
Response to Original message
12. Comments by former employees...
http://www.newamerica.net/blogs/2006/09/loan_to_learn_o...

From a former employee of Loan to Learn
I totally agree with the negative commits towards Loan to Learn. As a former employee with this company, I can honestly relate to the comments expressing the unfortunate, dissatisfying experiences individuals have had with the company. Being on the other end of the phone, I felt the customers frustrations and the uncertainty they had of how this company handles their business. I, along with the customers, was frustrated at how Loan to Learn operates. They seem not to know exactly how they wanted to run their company, which explains why there was no consistency in the explanations of the customers issues from the CSR to the customer regarding problems and concerns. No one, including myself, knew the exact reason why a customer had to wait up to several weeks for their checks or why the a customer account was automatically sent to a third party collection agency after 30 days of not receiving payment. Maybe we all knew or had an idea of the true reasons to these unfortunate and common situations, but chose not to disclose it to the customer for the sake of one's job...except me. For those who are seeking additional financial assistance for school, please do a thorough research of any company before jumping into something that sounds to good to be true. After my experience with Loan to Learn (in which I could right a book), I personally would try very had to stay away from private student loans, especially if they don't offer or grant any federal benefits (aka Loan to Learn). FYI- Be aware of big banks that coincide with these small private loan businesses. Loan to Learn is partnered up with a well known bank offering loans under this bank's name (to avoid any legal ratifications- I chose not to disclose the banks' name). Good luck for those who are seeking financial assistance for school. Hope this was helpful...
-------------------------------------------------------------------------

Loan to learn
As another former employee of Loan To Learn, I totally agree with the previous entry. They have no clue as to what's going on and policies change on a daily basis. They call themselves a non-profit organization, which is ironic considering they charge some students up to 16% interest and they hire hard core sales people to push students into getting their loans.

The CEO of the company, Catherine Reynolds is an egomaniac -- she even has a plasma TV in the lobby showing an interview of her on 60 Minutes running all day on a continuos loop. She told a supervisor once not to fund small loans, only fund loans over 10K, she tries to tell her employees the importance of education, yet the only reason she's in this business is to make money. She's already done this this before -- started a similar company years ago only to sell it to the highest bidder.

Do yourselves a favor, look for alternatives, you can do much better than Loan To Learn.
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ComerPerro Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jul-17-07 01:11 PM
Response to Original message
15. federal loans are covering less and less, and loan companies are making a killing
there will come a time when going to college will finally be the luxury that Republicans want it to be, only availible to the wealthiest. Eventually students will realize that it is not worth the time and effort to go to school and make only $20k more per year just so they can turn around and pay back well over $100k in loans.
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