I took out some student loans, and when I was paying them back I was treated very badly by Southwest Student Services. For example, when I tried to make extra payments to apply to the principal, they often neglected to do so. When I called to correct it, I was told "Oh, yeah, we've applied it to the principal; it just doesn't show on your statement." Basically, they lied to me.
I don't know what they're called these days (I believe they've changed their name), but I'm really glad I'll never have to deal with those vermin again. If there's a next time, I'm going to start with Wells Fargo, and with luck that'll be my last stop, too!

Well, first of all, thanks for posting this, Wells Fargo.
I love the idea. It's great to help students and I wish you success.
This blog doesn't make me want to open an account because I hate your bank with the burning anger of a bull seeing red. But I'll read it.
I applied for financial aid every semester I was in school and only qualified for loans until my very last year. The loans were not enough to carry all my expenses, so I had to work on top of them.
Unfortunately it wasn't the best thing for me. I ended up owing almost $40,000 by the end.
The application process was hell. But eventually it was worthwhile.
However, the jury is still out whether the loans are worth it or not.
September 10, 2006 09:18 PM

Are interest rates going to go up?
September 11, 2006 08:58 PM

Cutesy site = Lame-o. Do you really intend to have a conversation here or are you just going to print a bunch of Corp-crap about how we are all so much better with your hands in our pockets instead of Bank of America's hands?
Your spin: get a loan and pay it off in blood for the rest of your friggin' life. Just have to keep refinancing and moving it from the student loan to the credit cards to the auto loan to eventually a mortgage. By the time we die, you own our great-grandkids.
September 11, 2006 08:52 PM

So are you guys giving away any iPods if we do our loans through you?
September 11, 2006 09:14 PM

Not much conversation here. I came across your press release and thought I would check in.

So could you maybe tell me which way is the better way to go to finance my daughter's college. She is a freshman and I'm not sure if I should do a Home Equity loan or try to get her a loan through her school's student loan program. She's going to Ol' Miss!
September 11, 2006 09:46 PM

I just got my SAR back and it says thay my EFC is 09988 and that I don't qualify for any federal aid, which I figured might be the case. I am 40 year old single adult who makes decent money but unfortunately I don't have the money to be writing big checks for my education.

The last time I thought about school I remember seeing the Stafford Loan as the one type of aid I did qualify for, however, this does not even appear to be the case this time.
Before I make a committment I am trying to get an idea of what type of loans maybe available (if any) and the schools I am looking at are too busy trying to "sell me" as if I was buying a car.
My credit isn't all that great and while I have recovered from a severe finacial crisis I am not certain that I would be able to qualify for any type of private, unsubsidized loan.

How can I get these questions answered? It would be helpful to know before making any final decisions just how I am going to pay for school. That will save a lot of heartache
September 13, 2006 08:03 AM

Well, Sally, that depends. Here’s a complicated answer to your simple question.
Effective July 1 of this year, federal student loans now have fixed interest rates—so they’re going to stay the same: 6.80% for Federal Stafford Loans and 8.50% for Federal PLUS Loans for parents or grad students. (Graduate and professional students who get a Federal PLUS Loan from Wells Fargo actually receive a lower interest rate of 8.00% when the loan is owned and serviced by Wells Fargo.)
However, if you borrowed any federal student loans before July 1, those loans most likely will have variable rates that change annually (every July 1). Currently those variable rates are 6.54% for Federal Stafford Loans when you’re in school, in your grace period, or in deferment; 7.14% for Federal Stafford Loans when you’re in repayment; and 7.94% for Federal PLUS Loans for parents or grad students. The variable rates are based on a U.S. Treasury bill, so depending on what the economy does between now and next year, rates for those loans could go up or down.
Federal Consolidation Loan interest rates are based on a what they call a "weighted average" of the loans being consolidated, rounded up to the nearest eighth of a percent. You actually "lock in" a fixed interest rate for the life of your loan when you consolidate. Depending on when you consolidate, that new interest rate could include all fixed-rate loans, all variable-rate loans, or a combination of both.
Then there are Wells Fargo private student loans, also known as alternative loans. These are based on the Prime Rate, which has been on the rise for several years now and currently sits at 8.25%. Other banks may use the Prime Rate or another index, like the LIBOR (London Interbank Offered Rate), as a base for alternative loans.
See, told you it was complicated. We’re going to spend some time talking about interest rates (and even what interest is, in general) soon. Stay tuned.
September 14, 2006 12:39 PM

Thanks for checking in, Nate. And congratulations to your daughter on her acceptance to the University of Mississippi!
You know, many parents ask us this question, and ultimately, you should look at all the options and choose the one that’s best for your individual financial situation. Our resident parent expert Caroline is working on a comparison of home equity loans and other types of financing right now, and that might help you in your decision making progress. Check back with us in a few weeks.
September 14, 2006 12:41 PM

Hey Dwight—Staci asked me to address your question since she knows how addicted I am to my iPod. (She got one for her birthday but hasn’t quite mastered it yet.)
A lot of companies have giveaways to attract customers, but Wells Fargo doesn’t give away iPods with our student loans. No matter what the incentive is, make sure you look closely at the product. Some of the freebies could be a shiny distraction from a higher priced product. We all fall into that trap sometimes—heck, I buy expensive makeup to get the free gift bag. But when it comes to long-lasting decisions like student loans, make sure the loan is just as cool as the gift.
September 14, 2006 12:44 PM

Todd, you’re asking some important questions—and you’re not alone. Many adult students who work are struggling with this same situation. I’d like to devote a more time your questions than I could with just a simple comment, so watch for an upcoming post on this topic.
September 14, 2006 12:42 PM

Hi Todd,
From your post, it sounds like you're working. Check with your employer about tuition reimbursement. Many employers reimburse tuition if you pass a course and some pay for books and fees. Often the degree you're working towards must support your current job or qualify you for another job within the company.
Something else you may want to consider is attending a community college for the first two years (if the classes will transfer to the four-year school from which you'd like to receive your degree). Often the cost per credit at a community colleges is substantially less than what a four-year school charges.
If you continue working full-time while attending school, you’re already paying for many items that are figured into the cost of education (room, board, transportation, health care, etc.). You may find going back to school is more affordable than you thought.
Good luck!
October 6, 2006 02:44 PM

I helped my son go through the time consuming task of applying for student loan consolidation prior to the July 1 deadline this year. Everything seemed in order until we were told by the lender that Wells Fargo has refused to release their loans for consolidation by not honoring the In School Waiver and Request for Early Repayment. Is this the policy of Wells Fargo? Is every other borrower up the creek as well?
November 9, 2006 01:40 PM

mrsjava, thanks for your inquiry. I’m assuming that your son is still in school, so his Wells Fargo Federal Stafford Loans were in an in-school status when he applied for his Federal Consolidation Loan with another lender. Is that correct?
If his Stafford Loans were still in an in-school status, his ability to put those into early repayment in order to include them in a Federal Consolidation Loan ended on June 30, 2006. This is due to changes made to the Higher Education Act earlier this year.
According to the U.S. Department of Education, a borrower’s request for conversion to early repayment must have been received by the holder of the underlying loan—in your son’s case, Wells Fargo—prior to July 1, 2006. If Wells Fargo did not receive your son’s request for conversion to early repayment prior to July 1, 2006, he may only consolidate loans that have entered the grace period or are already in a repayment status.
I can’t speak for your new lender, but I’m not sure why their representatives did not advise your son of this deadline when he applied for a Federal Consolidation Loan with them.
So no, it’s not a Wells Fargo policy or interpretation. It’s based on requirements that all Federal Family Education Loan Program (FFELP) participants should be following. It’s also the policy being enforced by Direct Lending when borrowers include FFELP loans in their Direct Lending consolidation application.
I know this explanation doesn’t solve your son’s problem, but I hope it helps clarify.
November 10, 2006 08:55 AM

Hi Rob--Sorry that my comment to yours is all the way down here!
We are having some issues with our content system (we've actually lost some comments completely) and have to archive all existing comments before we can publish new ones. Really, we're not trying to draw attention to older posts! Fingers crossed that the problems will be resolved soon.
Back to the issue at hand: What a bummer that you had such difficulties with your previous loan servicer. Making extra principal payments on your loan is not only smart, it's one of your rights as a federal student loan borrower. Don't let anyone tell you otherwise!

I would like to ask you a queston. My grandson was attendin college. One semester he could not go because he had gotten mononucleosis. He was so sick from that. He was going to school through having a studeent loan. He also went on the Pell Grant. He has his own apartment and his only means of support is what he makes at Applee's. Whgich he makes pretty good money. He wants so badly to go back to college and finish ge4tting his degree, but even though the student loan place where he got his loan has so far said nothing since he had to skip the one semester, he feels thagt if he applies again that they will turn him down and make him try to pay back his loan at one time. He wants to go on the Pell Grant instgead of taking the ute of increasing the student loan. Is there a way that this can be done while having the outstanding loan balance from the student loan or will they make him pay back everything right away before he can go back.

Editor's note: Just so you know, we removed this commenter's last name to protect her privacy. Nothing else has been changed in any way.

Hi kat--Thanks for your question. It's such a good one that I'm going to write a new post about it!

I think there are lots of folks out there who share your grandson's fears, and we'll do what we can to help calm them. Please check back with us in a week or so for some answers.

kat--FYI, I published a post today (June 3) about your grandson's situation. Hope this information helps you both!