Consumer complaint received 2018-01-29
Company: SLM CORPORATION
State: WA
Product: Student loan
Sub-product: Private student loan
Issue: Getting a loan
Sub-issue: Denied loan

Complaint:
During the XXXX school year, I was enrolled in the school counseling licensure program. The curriculum included a year-long internship at two separate school sites, totaling about 30 hours/week. These work-hours did not include separate coursework/final projects/licensing. So while the amount of credit-hours for this coursework was considered " part-time '' the actual time investment was more than full-time ( 40 hours/week ). 

Here 's the catch, and this is importantthese internships we UNPAID. As a student with an Expected Family Contribution of XXXX dollars, I obviously had to apply for a private student loan to pay for tuition and cost of living. 

I was approved for a private loan of {$20000.00}, which I split into thirds for disbursement at Fall/Winter/Spring terms. 

After the Spring term disbursement, I had discovered a mistake in the number of credit hours I had been billed for during the Fall/Winter terms. XXXX did not create the proper course numbers for students in the licensure-only program, and so I was signed up for the same course that the Masters students had to take, which included a different number of credit-hours than I actually needed. 

This mistake meant that I had been signed up for 5 or more credit-hours for Fall/Winter terms. What I did not know, and nobody told me about, was that if a student takes less than 5 credit-hours, they aren't able to receive financial aid in the form of student loans. So when Spring term came around, I signed up for the classes I needed, and received my 3rd and final loan disbursement. At this point, I had a closer look at my completed coursework, and discovered that I had completed too many credits than what the licensure program entailed. This is when I discovered that the school had made a mistake, and did not create the proper course number for licensure-only students. Not needing to pay for extra credits to qualify for licensure, my professor made an adjustment to the number of credits I had enrolled in. 

This put me below the 5-credit threshold for financial aid. As a result, the school added a " negative credit '' to my account, which apparently is another way of saying I had to return the 3rd and final disbursement of my PRIVATE STUDENT LOAN. Apparently they would have taken the money and returned it to my lender. So, I contacted my lenderthey didn't want me to return the money. They wanted me to complete my licensure. 

I understand the rational hereif you are only taking a few credits, you are expected to be working, making money, and paying for those credits out-of-pocket. Sounds good. But in my situation, I was completing a full-time internship. And the course for this internship only involved 2 CREDIT HOURS. 

Essentially, the financial aid system is saying that in addition to the full-time internshipnot to mention the absurd amount of work required for completing the state-licensure requirement on top of all thatI should be working full-time to pay for both tuition and cost-of-living. 

Obviously that scenario is impossible, so I was left with 2 options : drop the whole program and go back to work, or take out an additional loan. So obviously I would have to take out another loan, because I need to pay for my cost-of-living while completing an unpaid internship. But this is where it all gets crazy-making. So I would have applied for an additional ~ {$3000.00} to pay for the " negative balance '' on my XXXX billing account. But I didn't borrow money from XXXX, so they would have returned it to my loan lender, after borrowing it from the lender. 

This is totally insane.

Company public response: Company believes complaint caused principally by actions of third party outside the control or direction of the company
Company response to consumer: Closed with explanation