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

[dajoki]

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/2007/07/15/AR2007071501448.html?nav=trm

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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.

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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.

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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.

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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.