Sallie Mae - Know Your Student Loan Lender
Student loans make higher education a possibility for millions of people. If you are planning to use student loans to fund your high education, there is one company that will quickly come to the forefront for your efforts. Sallie Mae is that company.
Sallie Mae is the largest student loan company in the United States and probably the world. It is managing close to 130 billion dollars in student loan debt owed by more than ten million students or former students.
The story of Sallie Mae is rather odd. Officially known as the Student Loan Marketing Association, the entity was originated by no less than the federal government to back and adminster federal student loan programs.
Through the next 32 years, Sallie Mae did its job in a manner that can only be called a smashing success. Millions of people went to college and graduate school that otherwise would not have. It is as simple as that and out country is the better for it.
In 1997, it was decided that Sallie Mae should become an independent entity. Over the next seven years, it slowly cut its ties to the government. As of 2004, it is a publicly traded company. Bank of America is one of its primary owners.
As a publically traded company, the issue is no longer getting people into and through higher education. The bottom line is now the focus. This evolution has spawned serious criticism of the entity and how it conducts its business.
In 2007, Sallie Mae was nearly purchased by J.C. Flowers, an investment group. The offer of 25 billion dollars was huge and so was the criticism of such a deal given the role the company plays in higher education. Fortunately, the deal fell through.
As Sallie Mae has focused on profits, it has become extremely aggressive about collecting on loans. The company will call the borrower, their family members and so on to force repayments. Such conduct is very controversial and possibly illegal.
Sallie Mae has also been pressuring universities to turn over information on students pursuant to the Freedom of Information Act. Universities have balked and the bad publicity has resulted in Sallie Mae stepping back for now.
Sallie Mae is a critical source for funding high education for millions of people. That being said, the company is no longer the benevolent government agency it used to be.
Filed under: Finance