Wells Fargo & Company Complaint - Do not apply for a student loan with Wells Fargo: fraudulent, plays games with DOE rules
SIOUX FALLS, SOUTH DAKOTA -- My father, now 87 and in poor health, cosigned for my daughter a student loan from Wells Fargo. She was just starting college and had no credit history at the time, and Wells Fargo rejected my application because of "insufficient income." (Why would I be applying for a loan if I had the money to send my child to college?) My father also was in good health at the time, and his retirement account and pension were sound before the economy tanked and reduced his monthly income by 30 percent.
When my daughter graduated in 2006 she began making regular payments on the loan. However, she decided this year to enter graduate school fulltime. At her school's suggestion, she applied for a deferment: but she was told by Wells Fargo they "don't give deferments," unlike federally-sponsored loans. She would have to apply for a three-month forbearance, which would allow the loan to continue to accrue interest, and which she would have to apply for at the end of every semester. She also has to make payments over the summer break unless she takes summer classes, which she won't do because she wants to use those months to work fulltime.
But the sleaziest thing Wells Fargo has done has been to try to force my father to make payments on this loan while it is in forbearance. He's received calls from the office in South Dakota, where apparently there are few banking regulations, in which he has been threatened with a "ruined credit history" and the probability that the account will be sent to a collection agency.
I checked the loan agreement, and there is nothing that says a cosigner must make payments while the loan is in forbearance. I also see nothing that says the debtor will not be able to receive a school deferment. It seems that Wells Fargo is just making up the rules as it sees fit, since the loan my daughter took was a private one and not federally-subsidized.
I am in the process of filing a complaint with the California state attorney's office, but in the meantime I want this warning to go out to parents and students and all the well-meaning relatives who might co-sign a loan with Wells Fargo. Do not deal with this institution! Seek out a federally-subsidized loan with another loan company or institution. (But not Sallie Mae: that's yet another complaint.) And do not allow the financial aid officer of your student's school to talk you into taking one of these private loans. This unfortunately happened to my daughter. I wish we had walked away from the college, but she was so bent on attending it my father and I caved in.
I am also really disappointed with the college financing process. The schools themselves have turned into a sales racket that puts millions of kids into years of debt.