“Dear Steve,
Can you look over this agreement Student Loan Service Managers Sent Me?
Anonymous”
Dear Anonymous,
I’m happy to look over the agreement for you and give you some feedback. Keep in mind I am not a lawyer and can’t provide you with any legal feedback. All I can do is read it like a friend and point out some things that might be interesting or need further clarification.
Thanks for asking me to help. The end goal is just to make sure you or any consumer is aware of what they are agreeing to. If they are and that is the service that was sold then it can eliminate problems between the buyer and seller.
Privacy Policy – Page 1
Just look for the red arrows.
The company may share your personal information with third parties. You may opt-out of the sharing of your information to third parties by calling the customer service department at 855-747-9918 or writing to Student Loan Service managers at 23172 Plaza Pointe Drive, Suite 138, Laguna Hills, CA 92653. That suite is a small 1,849 office according to this brochure. Maybe they have more space there than that.
Service Agreement – Page 1
- The agreement says the company “is in the business of managing Client’s student loans and improving Client’s Federal Student Loan repayment terms, by arranging and managing the process of Federal Student Loan Consolidation Services or the Processing of Client’s portion of documentation provided by programs offered through the Department of Education (DOE) for client’s with Federal Student Loans.” That leads me to believe they do not assist with private student loans and are primarily focused on loan consolidation.
But another part of that same section makes me wonder if the company might not suggest other lenders to you. Then again, they may just be talking about the current underlying lenders on your federal loans. It’s not clear. They also say they will “determine and obtain best repayment plan structure based on Client’s needs using current plans.” Seems like a silly thing to say, what does “best” mean?
The guarantee section says if the DOE rejects you for a consolidation they will provide you with a 100% refund. But it also mentions, “repayment plan is not achieved using current lenders.” I’m not clear if they are suggesting you to their other current lenders or they are talking about your current lender, the DOE. Worth asking for clarification on that. - The address on your loans will be changed to the SLSM address or other parties they may designate. This could mean you may no longer receive communications from your lenders and they would instead be sent to SLSM.
- The fee for the program includes an initial program cost and a “Yearly Renewable Cost.” That charge is automatically renewed and collected, but on a monthly basis. If you are on a 20 or 25 year repayment program, you could be paying for all of that time. You will at least pay “until all of the Student Loans are paid in full.”
- Fees will be debited from your account each month and it a payment bounces you will be charged a $35 service fee. You may also have to pay a $10 late fee. Additionally you will have to pay “any Payment processor fees associated with their services.”
- Now this section seems to leave you exposed. Before they said the mailing address on your loans will be changed to their own or someone else they designate. But in this section they say student loan payments are your responsibility but “Any loan payments that are made through the services of Company’s payment Processor are purely an added benefit to the Client. Client will not hold Company liable for loans not being paid.” So if you are not getting the notifications and they are not obligated to make sure the payments are getting made, then how will you know if you are late?
- I get the indemnification clause. It is the way companies try to waive all of their responsibility. But this one is odd. Remember before, the company said they were going to give you the “best” plan but here they say, “Company makes no warranty, express or implied, as to the fitness of any recommendation it may make to Client arising out of this Agreement.” So if they are not going to stand behind any recommendation how can any recommendation be best?
Service Agreement – Page 2
- They want you to cough up your FAFSA PIN number so they can logon to the Department of Education site as you.
- You have three days to cancel this agreement or you can cancel “if done 90 days prior to each anniversary date of this agreement.”
National Secure Processing – Page 1
This page is a head scratcher. So if Student Loan Service Managers is the company you are contracting with, why are they already passing the buck to some company named National Secure Processing. From looking at this document it looks like this is the company that is really going to service your account and they are located in the same building as Student Loan Service Managers. What’s the point of all of this. They sit in the same building and are going to do what Student Loan Service Managers told you they were going to do so why doesn’t Student Loan Service Managers just do it? Could it be they are just a sales outfit?
When SLSM changes your mailing address, does it really get changed to these guys and how would you know?
Summary
So that’s my quick look at the agreement. Make sure the agreement represents what you were told on the phone before you sign on the line.
To make this even more perplexing, if National Secure Processing is a separate company then why to they use the email address from slsmanagers.com?
Please post your responses and follow-up messages to me on this in the comments section below.
Sincerely,
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I totally agree with Steve’s observations that this is a strange way to go about it. But the most important thing is that they charge you in advance. Never agree to that, as it is illegal in many states to charge fees for any kind of debt adjusting, and if they don’t achieve results, getting a refund is often difficult or impossible. PASS ON THIS and look for help that actually helps without costing you more money than it “saves” you.