RUSA questions U. contract with student debt collector
Sallie Mae’s General Revenue Corporation gets paid to accrue unpaid tuition
While the Rutgers University Student Assembly members were drafting an in-state tuition bill in early October they found out the University pays a company to collect student debt.
John Connelly, president of RUSA, said the University has a contract with the General Revenue Corporation, a subsidiary of Sallie Mae, which collects unpaid student tuition, last night in the Student Activities Center on the College Avenue campus.
“We pay them to collect our debt,” said Connelly, a School of Arts and Sciences senior. “It doesn’t make sense.”
RUSA introduced a resolution for a “Student Debt Teach-In” on Dec. 3 at the Douglass Campus Center, which will be a session that educates students on student debt, Sallie Mae and the rising cost of education.
Marios Athanasiou, co-author of the resolution opposing the contract, said GRC is allowed to keep 25 percent of outstanding tuition collected.
“We see this as very corrupt and outside the interests of students,” said Athanasiou, a School of Arts and Sciences sophomore.
GRC has several lawsuits regarding the violation of the Fair Debt Collection Practices Act and has received 343 complaints from the Better Business Bureau since June 2012 because of their aggressive collection practices, Athanasiou said.
He said the corporation will call, mail and email students relentlessly with threats about future credit ratings if they do not pay.
“Of course we believe students should be paying tuition. We want to make it a less threatening environment,” he said.
David Bedford, co-author of the resolution and a member of the Rutgers Student Union, said the eventual goal of the resolution is the creation of an in-house department, which would help students with debt rather than just bully them.
“People aren’t made aware of options like payment plans,” said Bedford, a School of Arts and Sciences sophomore. “Not only do we want the University to disaffiliate [from the GRC] but create an in-house operation that helps students through the process rather than threatening [them].”
Athanasiou said Sallie Mae is consistent in lobbying against the interests of higher education and currently holds about $150 billion’s worth of national student debt. He said a large number of institutions hold contracts with GRC, but none have disaffiliated yet.
Athanasiou said he hopes RUSA is able to follow the example of United Students Against Sweatshops, which managed to get the University to revoke its contract with Adidas in the past week. He said the University should handle student debt collection instead of an outside corporation.
“What will make them stop is us … saying ‘we will stand against this,’” he said.
The contract is annual, so it could be revoked as soon as this year, Athanasiou said.
Bedford said the main reason no universities have disaffiliated yet is because not enough people know about the corporation.
RUSA members found out about the contract accidentally when they were working on the in-state tuition bill and University representatives were hesitant to come forward about it, he said.
Bedford filed an Open Public Records Act request for the contract in early October.
“The University claimed they didn’t know about it at first,” he said. “After a while they changed their story, which makes us believe they were aware.”
Also on the agenda was a resolution to show solidarity with universities in the Middle East, which have been affected by the conflict in Israel.
The resolution, which is largely symbolic, is a call for peace in the region, said Jacob Neiman, a School of Arts and Sciences sophomore. He said some universities in the area have been directly affected by violence and had to cancel classes and evacuate students.
“We commend the recent cease-fire announced Nov. 22, 2012 as a step in the right direction,” he said. “But more needs to be done.”
Both resolutions passed unanimously.