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How the Loan Sharks Ate My Diploma

By Beth L. Pinsker

If Bill Clinton needs some kind of incentive to simplify the student loan lending process, he should come watch the expression on my face if I open my diploma this afternoon and find a blank piece of paper. For months, I have been getting warnings that Harvard will withhold that sacred certificate unless my loan payments come through in time.

Of course, my missing diploma shouldn't worry Harvard too much. Most of the offices on campus think I have already graduated.

Silly me, I was confused by the calls from four different offices warning me that Harvard had not received its loan payment because--at the same time--I was receiving notices that I had already graduated and my loans were in repayment. Within two days in December, the mail brought my "Notice of Repayment" from the Student Loan Office (located in Holyoke Center) and a letter from the Financial Aid Office (8 Garden Street) warning that I had not applied for a loan and would not be able to register for spring semester.

To make matters even more difficult, at the same time I was getting warnings of default, I was getting invitations to Junior Parents' Weekend events. The Requirements Office (Holyoke Center), it seems, did not recognize my advanced standing and thought the semester I'd taken off left me behind a half-year. The Registrar (10 Garden Street) got the advanced standing part right, but calculated my graduation date as March, even though I had to haggle with the office to register for spring semester courses.

Why, one might ask, does Harvard have such a hard time figuring out who I am and when I am graduating? Well, I certainly have no idea. Luckily, I kept on top of my own status, finished all my degree requirements, turned in a thesis, paid my library fines and achieved the miraculous feat of getting tickets for all of my family members who wanted to come to Commencement.

I think my identity trouble started when I took advanced standing during my first year. When I went to sign up for a sophomore tutorial in the English department, the head tutor had no idea what to do with someone who didn't fit into the house assignment system. So much for the stellar advising system.

What really confused the multifaceted Harvard bookkeeping system was that I took a semester off during my second year of school (which was officially my junior year). My mistake was working for a semester rather than going to Europe to study. Instead of continuing my loan deferments, the Financial Aid Office (FAO) checked me out of school and started my Stafford loan six-month grace period.

To be honest, I don't know if that was the FAO's fault or the lending institution's. "Elsi," the Education Loan Service, Inc., is not known for its bureaucratic efficiency. All I know is that I used up my grace period during my time off, so when Elsi assumed I had graduated (in March), they started sending me bills for my Stafford loan. And then warning notices. And then really urgent warning notices.

I could anticipate that my hopes of finding gainful employment, renting an apartment, signing up for credit cards, opening a bank account in a new place of residence and buying a car were going to be difficult to achieve with a bad credit rating.

But instead of giving up, I made the now-familiar rounds of student agencies to find out why they thought I had graduated in March and how I could convince them otherwise. I approached the Registrar, the Student Loan Office, the Student Billing Office and the Financial Aid Office with my dilemma and tried to assure them that I was still in school.

In the virtual reality of the lending business, however, establishing an identity is a difficult maneuver. Brandishing the secret code-words--they served broccoli cheese pasta in the dining hall tonight--I tried to regain entry into the land of the Harvard living. But only workers at Hilles (Shepard Street) could confirm my existence--she still has books out, they vouched.

The current lending system for student loans facilitates this kind of bungling. The reason that my loan for this year did not go through is that Harvard did not sign the forms correctly. The lending institution, in the true fashion of a go-between, wouldn't process incorrect forms and, instead of notifying anyone, just sat on them. The student billing office kept sending my family huge bills, and wouldn't let me register for spring semester until I convinced them "the check was in the mail." Then I started getting the diploma warnings. The correct forms went out a few week before graduation, but there is no rushing those lending institutions to send a check.

Elsi is only the beginning of a long, paper-filled maze of agencies. Sallie Mae, the Student Loan Marketing Association, is the real culprit. Sallie Mae is no Madonna, but she probably makes more money in a year from poor saps like me than Madonna will make in her whole career. Sallie Mae and Madonna do, however, have one thing in common: bondage. One temptress' whips and chains are another's default notices.

There seems no reason to continue using this system for student loans. Could Uncle Sam be any worse at this than Sallie Mae? Although the government has practice in staggering inefficiency, the problem now is that the bumbling is compounded on three levels.

First the school botches up applications, misses deadlines and stifles communication. Then Sallie Mae and her cohorts tie up payment processing with their impersonal computer system that miscalculates graduation dates. The government sells the Joans to Sallie Mae and then guarantees payment. All Sallie Mae does is collect the payments and interest.

If the government ran the show by itself, one-third of this bumbling would go out the window and twice as many people could get loans with the money they'd save. And a missing title on a form would likely not stop anyone from sending out a check on time.

In addition, when Clinton institutes his national service plan, he could conveniently align it with the Joan department. Students who go into default could automatically move into some kind of service job to help them meet their payments.

I'd certainly be willing to do any kind of service to get myself out of hock with these Ivan Boeskys of student finance. As long as my credit rating is crashed, I might as well apply for some kind of Sallie Mae credit card with mileage credit. At least then I'll earn points for every trip I have to make between the Square and Garden Street--not to mention all the calls to my toll-free buddies at Elsi. Getting the paperwork right is important. I just hope Harvard pulls through today.

Beth L. Pinsker '93 was editorial chair of The Crimson in 1992.

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