iOS app Android app More

Featuring fresh takes and real-time analysis from HuffPost's signature lineup of contributors
Dan Lybarger

GET UPDATES FROM Dan Lybarger
 

Tales Of A Phone Monkey: My Tour Of Duty At Sallie Mae

Posted: 11/30/11 02:21 PM ET

A little over 20 years ago, if you had your lunch or dinner interrupted by a caller wanting you to fork over on your student loans, I may have been the fellow who wrecked your day. I apologize. You shouldn't have had to hear from me, and it's a safe bet your life had enough problems without a phone monkey like me getting on your nerves.

Normally, I wouldn't admit that I once had the task of reminding people of unpleasant obligations. During the four months in 1989 that I worked as a Manpower temp for Sallie Mae in Lawrence, Kan., people looked at me with sour expressions on their faces. "I couldn't do what you do," they told me glumly. At the end of my assignment, I couldn't do it, either. It was practically a gift from the Almighty when some of my peers and I were all laid off shortly before Christmas.


Several things have happened to me in the last few decades that have made me put the short, sad period behind me. I've made a living doing everything from interviewing Charlton Heston, writing instructions for banking software, taking census data, driving a fork lift, cutting open boxes at a K-Mart warehouse and shoveling horse manure.

The reason I've come back to that time is because I encountered a problem that has been festering for years and is only now entering the public consciousness. Namely, that students have been getting worthless degrees from fraudulent schools but are still expected to pay back steep loans, even though they don't have the kinds of jobs that could make that possible. After reading several articles by HuffPost reporter Chris Kirkham, I thought people should know that this is not a new problem. As bad as it was back in the late 80s, it's far worse now.

When Quotas Are Meaningless
If you didn't already know, until early 2010, Sallie Mae issued government-backed student loans and then collected once the student graduated. Although the federal government is now in control of issuing the loans, Sallie Mae and other lenders still service them.

In an ideal system, the graduate should be able to make enough to pay back the loan so that Sallie Mae makes a profit and the government doesn't have to administer the loan. Tax money isn't squandered trying to get debtors to pay up, and all benefit.

Now, if a borrower has decided to use the bounty from his or her new profession on luxury items instead of repaying the loan, Sallie Mae could simply file a claim with the guarantor (usually the federal government or with a state), and a collection agency would make sure the borrower forked over.

I had a job because there were several cases where the system wasn't working in an ideal manner.

Occasionally, something went wrong when it came time for Sallie Mae to file a claim. Some glitch, like missing contact information, prevented a successful transfer to a collection agency. If I actually got a borrower on the line, I was supposed to convince him or her to either fork over or sign a new deferment deal. If I got an answering machine, my prepared text informed the listeners that we had "good news" about their student loans. Many of these folks hadn't paid in years.

Getting a hold of an actual borrower was another matter. In a lot of cases, the former students had also skipped out on paying phone and utility bills, so nobody could locate them. Some people I called were surprised the borrowers had listed them as references. This happened frequently.

Much of my day was spent calling directory assistance, trying to see if the borrowers or their references had reestablished phone service. Despite what my quota sheet each day said, I rarely spoke with more than one borrower a day. When I arrived at my cube each morning, I saw the sheet and hummed to myself, "To dream the impossible dream."

Strange Schools
In a few instances, I encountered people who simply couldn't pay back the loans. A couple of angry people on the line informed me they were suing the school for fraud. One time, I spoke with a woman who had an excellent reason for leaving the loan unpaid. She had been aggressively recruited by a truck driving school and had agreed to take the loan against her better judgment.

Because of a hip injury, she was physically incapable of driving an 18-wheeler. No honest admissions officer would have accepted her. While she had my sympathy, I still had to make her day a downer.

I usually sat wearing a headset while a green screened monitor informed me who the computer was calling and what school the alleged deadbeat had attended. One odd recipient of student loans was the Oklahoma Horseshoeing School. It still exists, and apparently graduates can make decent cash in the field. The name on my screen was an anomaly. I never got to talk to him or her to find out.

With alumni from the Georgia School of Bartending, my fellow phone monkeys and I discovered that graduates from that institution didn't fare quite as well.

"Hello, I'm Dan with the.."

"Are you motherfuckers with the Cures department?," an angry voice bellowed.

"Yes," I nervously answered.

"How many times do I have to tell you motherfuckers?! That motherfucker (the borrower) is
in jail!"

This was not an isolated incident, but we never found out what the crime of choice was for Georgia School of Bartending alumni. I had a coworker I'll call Rodney (I can't remember his actual name). My fellow simians and I declared that the School was his alma mater, and about once every day, one of us would tell Rodney that we had called somebody from the school.

Like a lot of people with bachelor's degrees, I got out of college with a degree that didn't offer immediate rewards. My B.A. in English from Ottawa University more than prepared me for grad school, but it was not a firm step into the job market. Sallie Mae was what was available until my paperwork for grad school was complete. Because of scholarships and my parents' frugality, I left college without any debt. As my career as a phone monkey wore on, I started feeling guilty about it. After four months, I welcomed my layoff. They no longer have a center in Lawrence.

Why I Looked Back

When I started reading Chris Kirkham's articles from earlier this year about aggressive recruiting practices and fraudulent billing at EDMC, a chain whose schools include the Art Institutes and Brown Mackie College, I thought I should speak up. In addition, the Kaplan chain of schools, which is owned by the Washington Post Company, has recently settled a lawsuit that paid $500,000 to 43 students because there was no placement for them as promised.

Many of these big for-profit schools that do this are doing the same bait and switch that small, disreputable schools did before and during my time at Sallie Mae. What's different today is that the schools I encountered during my time as a phone monkey were often fly-by-night operations that folded once enough borrowers figured out they'd been had. While the Oklahoma Horseshoeing School is still around to teach a potentially useful skill, most of the colleges that ripped off my borrowers are defunct. When one Kansas City-based truck driving school folded in disgrace shortly after I left Sallie Mae, I wasn't surprised. I recently spoke with an attorney who tried to sue a school here in KC back in the 90s after they promised to turn students into programmers after two weeks.

Today, however, Wall Street, and Goldman Sachs in particular, have been investing heavily in these schools. New laws have also made it easier for shady schools to feed out of the taxpayer funded trough. Because of the insured loans, the schools can pocket the money regardless of whether the students have learned anything or can pay back the debt. The fraud has escalated from thousands, to millions, to now billions of dollars.

For the sake of the people I called who couldn't pay and for the sake of thousands who've been exploited by this system since then, some serious reforms are necessary. The people I spoke with didn't want to hear from me, and they shouldn't have to hear from lying recruiters and predatory collectors. Education helped me land better jobs after my time as a phone monkey, and it shouldn't be used to enrich the con artists who've made a killing off our tax money and off debts that can't be repaid.

 

Follow Dan Lybarger on Twitter: www.twitter.com/danlybarger