The backlash against Sallie Mae’s forbearance policy began when 23-year-old college graduate Stef Gray of Brooklyn, N.Y., launched a campaign to fight the fee through the online advocacy platform Change.org. By Jan. 26, 50,000 people had signed her online petition.

Gray argued that unemployed college graduates can’t afford the fee, and said since jobless federal student loan borrowers can defer payments with no penalty, Sallie Mae student loan borrowers should be awarded the same leniency if they can’t find work. She said she's been unemployed since graduating from college in May 2011 and has since paid Sallie Mae $300 in late fees.

Sallie Mae initially stood by the fee when it learned of the campaign. In a Jan. 27 statement issued to Credit Union Times, Christel explained the logic behind the fee.

“When customers ask for a concession to suspend required payments, we in turn ask for a good-faith deposit that acknowledges the importance of and commitment to resuming payments in the future,” she said.

The company also pointed out that just 4% of its loans are in forbearance and that it encourages borrowers to choose a more affordable, modified repayment plan before resorting to forbearance.

“Oftentimes people who initially ask to postpone their payments find other solutions because they realize that postponement of payments increases the amount of interest they will ultimately pay,” Sallie Mae said in its Jan. 27 statement.

Gray responded to Sallie Mae’s defense of the fee by stating, “Sallie Mae’s characterization of this onerous fee as a ‘good-faith deposit’ is simply unbelievable. When I pay a deposit on my apartment, I get my money back at the end of the lease. If this were a ‘deposit,’ borrowers would either get their fees back at the end of the forbearance or the money would be applied to the loan’s balance. Neither of these is true.”

Gray hand-delivered her petition, with more than 75,000 signatures, to a Sallie Mae representative on Feb. 2 in Washington. Later that day, the company announced its decision to update its fee policy, but Gray said she’s unsatisfied with Sallie Mae’s compromise.

“I'm amazed that we've made this kind of progress against a financial behemoth like Sallie Mae, but it's also clear that their action wasn't enough,” she wrote on her campaign’s home page. “It does nothing to help borrowers like me who are in real financial trouble. Sallie Mae isn't going to get rid of us by offering weak half-measures.”

Mike Long, executive vice president and chief credit officer for the $1.3 billion, Madison, Wis.-based University of Wisconsin CU , who is not involved with Gray’s campaign, said he does not expect the negative press to have much effect on Sallie Mae’s credit union partners or other CUs that offer student loans.

“Since the vast majority of credit unions’ private student lending portfolios are small, I suspect the impact from this news, either positive or negative, would be minimal,” Long said.

Long, who is also the executive vice president and chief operating officer for student loan CUSO CU Campus Resources, added that the differences between federal and private student loan benefits make the two incomparable.

“Private lenders reserve the right to charge fees for service and it’s really not applicable in this case to compare private loan benefits with federal loan benefits,” he said.

In an interview with Credit Union Times just prior to Sallie Mae’s forbearance fee policy change, Change.org Senior Organizer William Winters commented on the popularity of the campaign and said Gray “hoped for a victory.”

“The campaign clearly struck a nerve with the public, and it continues to drive discussions a lot of people are having about student loan debt,” Winters said. “Sallie Mae may be intransigent now, but Verizon and Bank of America also seemed intransigent before they dropped their fees. Sallie Mae has a brand to protect, so they are quite vulnerable to public campaigns such as this one.”