Saturday, April 28, 2007



By Kevin Anthony Stoda


Earlier this April 2007, Sallie Mae, the infamous owner of millions of student loans in the USA agreed to pay a fine for manipulating college students and college administrators in a way that has appeared to be illegal and fraudulent. For example, it appears that administrators at various schools and institutions around the USA were wined and dined so that they would steer student loan-takers to certain banks that would turn around and sell the loans to Sallie Mae. Almost the next day after agreeing to pay a tiny fine of several million dollars, Sallie Mae has agreed to be bought out for 25 billion dollars.

I was one of those who during his University of Kansas Days in the 1990s had his/her loan bought out from a small Kansas bank—which had claimed “We Never Sell Loans”. I wonder if there wasn’t some sort of buying off of staff at that bank and at other banks which went on in that Kansas Bank. I had chosen to use a bank Hillsboro, KS to get my loan from—only to have that bank change its policy within one year and sell my graduate student loan to Sallie Mae.

At least, when I think about how Citibank treated me, Sallie Mae has at times agreed to give me a loan-payment free holiday or deferment when I have gone back to graduate schools over the past decades. For example, I went to Midwestern State University in Wichita Falls and later to College Station’s Texas A & M.

This treatment of my first graduate level student loans by Sallie Mae can be contrasted with the way that Citibank handled my student loan just after my undergraduate days back in the 1980s.


In the early 1980s, I attended little Bethel College in Kansas on the way to B.A.degrees in History and the Social Sciences as well as in German. In several of my political science classes and in my Global Issues courses at Bethel, I became evermore aware of the sordid history of CITIBANK in Latin America and in the United States. In a report on the Mexican economy presented to forty other students, I noted how CITIBANK, Chase Manhattan and friends had gone about in Latin American countries promoting great increases in national debt during the 1970s and early 1980s.

The US government and organizations, like the IMF and World Bank, helped CITIBANK and cronies promote debt for Latin American countries. By the end of that decade, per capita debt for some Latin American countries were several thousand per person—whereby most people in those nations only earned several hundred to about one-thousand dollars or less each year.

In short, as a Bethel College student in the 1980s I learned what predatory lending was in a third world context was. Later, I would study International Political Economy even more and came to learn that CITIBANK and other USA banks in the 1970s had felt compelled to pressure others and look for markets (with the help of the USA government) in the 1970s and early 1980s because petro-dollars from the first and second oil shocks in the 1970s needed to be put somewhere.

Where should the sheiks from oil-rich Kingdoms in the Middle East put their cash? They didn’t want to waste the money, so they went looking for banks in the USA to put the monies in.

They often stuck money in other country’s banks as their economies were poorly run at that time or they were afraid that either progressive taxes, terrorists, or revolutionaries would take over their country some day.

These chosen American banks—with CITIBANK often being NUMBER ONE—in turn needed to earn money to pay back the interest on all that Petroleum based cash from the Middle East. Therefore, up through the late 1980s, USA banks pushed debt onto Latin American and other third world countries—with several of these countries having debts of over 75 billion dollars at the end of the Carter-Reagan era.

To my shock, the Kansas office in charge of student loans for Kansas students in the early 1980s decided to close shop, and it sold off all of my undergraduate student loans. Sadly, one of those student loans ended up being bought up by—YOU GUESSED IT--: CITIBANK in New York.

The Kansas office that closed had been named HELP of Kansas and the intention had been to keep the loan money in Kansas. By 1985, the year I graduated from Bethel College in North Newton, Kansas Some, sort of free-market shenanigans or fascism had taken place in the statehouse; hence my local Kansas loan was sold to one of the largest banks in the USA overnight.

Upset, I wrote both Kansas officials and CITIBANK demanding that my loan be returned to a local bank. I did not want my loan to end up in CITIBANK’s accounts.

These correspondences were to no avail; by spring 1986 I had began to repay my student loans to several banks, including Sallie Mae’s and CITIBANK.

Finally, in late October of that same year, I traveled to Germany to begin studying at the Berische University in Wuppertal for a year. Sallie Mae allowed me to take a loan deferment while I studied in Germany, but CITIBANK steadfastly refused after several correspondences (which) included appropriate deferment forms, to give me a loan deferment according to the bank’s own rules, i.e. even though I was a full-time student in Germany.


I sincerely believed over the following 3 1/2 years as I continued to pay on the CITIBANK student loan of mine that I was not being given a proper deferment while I studied in Germany because I had written those critical letters to CITIBANK as a college student telling them that [1]I did not wish CITIBANK to have my loan and [2] I was very critical of its predatory loan practices to Latin American governments over the previous decade.

This is no conspiracy theory.

However, I have no strong evidence but the fact that due to my various studies in Kansas, Texas, Germany and other locations around the globe over the past twenty years, I have regularly received loan deferments from every lien holder—except CITIBANK.

In short, the only variables that explain the lack of deferment has to do with: [A] the history & identity of CITIBANK as being a predatory lender, and [B] CITIBANK’s heavy-handed way of treating people who disagree with its policies and practices.

I welcome comments and insight on this?


Predatory Associates: Citigroup, Predatory Lending and the Credit Crunch for the Poor and Working Class
CitiGroup Settles Predatory Lending Charges for $215 Million
FTC Charges Associates, Citigroup With Predatory Lending Practices : Damages Could Exceed $500 Million
The Citigroup Watch
Predatory Lending




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