The National Consumer Law Center (NCLC) released a new report today about Sallie Mae, entitled "The Sallie Mae Saga: A Govt-Created Student Debt Fueled Profit Machine." Sallie Mae was created by Congress in 1972 as a government-sponsored enterprise or GSE. It was created to provide a secondary market for student loans. In 2004 in became a fully private company.
According to the report, Sallie Mae is the largest player in the private student lending industry. Private loans are almost always more expensive then federal student loans.
The report also explains how the FFEL program was finally ended in 2010, meaning that the federal government itself will originate federal loans as opposed to private lenders like Sallie Mae. That move alone saved taxpayers $85 billion in fees that had been going to companies like Sallie Mae. Then Sallie Mae paid lobbyists to make sure that they and other private companies would play key roles in servicing and collecting Direct Dept of Education loans and other loans.
The report goes on to list the various problems that Sallie Mae has had, and describes some ongoing investigations. There are also recommendation for change.
If you are having problems with your student loans, can't afford to pay them, need help and have not been able to deal with them yourself, contact our office at 713-772-8037.