U.S. Gov't Set to Renew Sallie Mae Contract — Possible Wrongdoing Aside

U.S. Gov't Set to Renew Sallie Mae Contract -- Possible Wrongdoing AsideSML Corp., better known as Sallie Mae, is the nation’s largest servicer of federally subsidized student loans. But it is targeted by federal agencies for possible violations of consumer protection laws.
Nonetheless, the Department of Education is planning to renew Sallie Mae’s federal contract, which is set to expire in June.
The new contract would run through June 2019 and is potentially worth hundreds of millions of dollars, according to the Huffington Post.
The plan to renew is mentioned in a previously unreported Oct. 25 letter, the contents of which were confirmed by both U.S. officials and Sallie Mae, the HuffPost said.
Last year, Sallie Mae recorded $84 million in revenue from its Education Department contracts. And, of course, it is looking for more revenue.
The Education Department was projected to originate more than $121 billion in new loans and contract out more than $1 billion in servicing and other fees — a large portion of which Sallie Mae is looking to snag.
All this comes in the wake of a recently-launched investigation by the U.S. Consumer Financial Protection Bureau into how Sallie Mae processes borrowers’ payments on student loans.
The Federal Deposit Insurance Corp. (FDIC) and Department of Justice are also looking at the company for alleged violations that include payment-processing issues, allegedly unfair or deceptive practices, and violations of the Servicemembers Civil Relief Act (SCRA), a federal law intended to ease financial burdens on active-duty members of the military.
“We are cooperating fully with the FDIC, DOJ and CFPB in response to their investigations and requests for information and are in active discussions with each with respect to any potential actions to be taken against us,” Sallie Mae stated in its quarterly filing last month.

One thought on “U.S. Gov't Set to Renew Sallie Mae Contract — Possible Wrongdoing Aside

  • December 1, 2013 at 12:02 pm
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    How can they even think of renewing the contract? There is nothing good about Sallie Mae. After 4 months of my constant complaining with Sallie Mae, they told me in an email that my complaints in early 2013 led them to uncover that their computer system does not allow students to sign up online for automatic debit. It is incredible that they have been offering online debit for years and it took a senior citizen with no technology skill to uncover this. Despite this they have done nothing to correct the problem and/or correct all the millions of errors they made with those students who came before me or after me. They still falsely advertise the online sign up. Sallie Mae changed my contact information in the online system so that I would not get proper notice and would go into default. They said my bank rejected the payment and my bank did not. This is just a couple of specifics that I have hard proof on. I have put complaints in with the Department of Education and they have not responded and have done nothing other than to say they will renew the contract with Sallie Mae. This news and their lack of response to me seems to point to the fact that the Department of Education is a co-conspirator with Sallie Mae and its illegal acts.

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