Private student lender Sallie Mae is changing how it handles a fee it charges struggling borrowers who seek to temporarily suspend payments. Rather than cancelling the $50 fee, Sallie Mae will apply the funds toward the borrower's loan balance if on-time payments are resumed for six months in a row.
The change came after an online petition asking the company to drop the fee collected more than 77,000 signatures on Change.org. The site also hosted petitions last year that targeted Bank of America and Verizon; both companies ended up scrapping plans to charge new fees citing widespread public feedback.
The fee from Sallie Mae isn't new, but has taken on added significance at a time when unemployment remains elevated at 8.5 percent.
Borrowers who are unemployed or suffering economic hardship can apply to temporarily suspend payments on both private and federal student loans. The idea is to keep their credit history in good standing, although the loans still accrue interest.
Federal student loans do not charge to defer payments.