A new report was released by the National Consumer Law Center (NCLC) about Sallie Mae, entitled "The Sallie Mae Saga: A Government-Created Student Debt Fueled Profit Machine." Sallie Mae was created by Congress in 1972 as a government-sponsored enterprise or GSE during the Nixon administration. 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 extremely successful, and has become the biggest player in the private student loan category. It originates loans, but it also makes a great deal of money in servicing and collecting other loans that it does not originate.
The report also explains how the FFEL program was finally ended in 2010 during the Obama adminstration, meaning that the federal government itself will originate federal loans from now on, 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. Following that, 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. I'm not holding my breath.
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.
Have you had experiences with Sallie Mae? Positive, negative, what happened? The report contains some personal stories from student borrowers that had negative experiences with Sallie Mae; what is your story? Your comments are appreciated!