American student loan firm
SLM Corporation (generally referred to as Sallie Mae; initially the Student Loan Marketing Association) is a publicly traded U.S. company that gives shopper banking. Its nature has modified dramatically because it was arrange in 1973. At first, it was a authorities entity that serviced federal schooling loans. It then grew to become personal and began providing personal student loans, though at one level it had a contract to service federal loans.
The firm’s main enterprise is creating, servicing, and gathering personal schooling loans. The firm additionally supplies school financial savings instruments similar to its Upromise Rewards enterprise and on-line planning for school instruments and sources. Sallie Mae beforehand originated federally assured student loans originated beneath the Federal Family Education Loan Program (FFELP). and labored as a servicer and collector of federal student loans on behalf of the Department of Education. The firm now gives personal schooling loans and manages greater than $12.97 billion in property. Sallie Mae employs 1,400 people at workplaces throughout the U.S.
On April 30, 2014, Sallie Mae spun off its loan servicing operation and most of its loan portfolio right into a separate, publicly traded entity referred to as Navient Corporation. Navient is the biggest servicer of federal student loans and acts as a collector on behalf of the Department of Education.
The Student Loan Marketing Association was initially created in 1972 as a government-sponsored enterprise (GSE) and started privatizing its operations in 1997, a course of it accomplished on the finish of 2004 when Congress terminated its federal constitution, ending its ties to the federal government. The firm stays the nation’s largest originator of federally insured student loans. Through its specialised subsidiaries and divisions, Sallie Mae additionally supplies debt administration companies in addition to enterprise and technical merchandise to a variety of enterprise purchasers, together with schools, universities and loan guarantors.
In 2005, Sallie Mae was amongst 53 entities that contributed the utmost of $250,000 to the second inauguration of President George W. Bush.
In August 2006, Sallie Mae acquired Upromise, an organization that gives rebates to patrons of sure manufacturers, which might be utilized to varsity financial savings accounts. Sallie Mae and Upromise plan to market complete monetary packages to folks and students, together with funding plans, monetary assist info, and student loans.
On April 16, 2007, Sallie Mae introduced that an investor group led by J.C. Flowers & Co. signed an settlement to buy Sallie Mae for roughly $25 billion. Had the transaction accomplished, J.C. Flowers together with private-equity agency Friedman Fleischer & Lowe would have owned 50.2% of Sallie Mae, and Bank of America and JPMorgan Chase would every have owned 24.9%. Sallie Mae would have ceased to be a publicly traded firm. The deal fell by way of in September 2007, with the patrons blaming hostile modifications to the enterprise’s outlook on account of the College Cost Reduction and Access Act of 2007 and the tightening of worldwide credit markets following the 2007 subprime mortgage monetary disaster. Sallie Mae subsequently started authorized motion, solely to drop it in January 2008 upon completion of a $31 billion funding spherical, together with funding from Bank of America.
On April 6, 2009, Sallie Mae introduced that it’s going to transfer 2,000 jobs again to the U.S. throughout the subsequent 18 months because it shifts name heart and different operations from abroad.
On March 31, 2010, Sallie Mae introduced the upcoming layoff of two,500 staff in response to the signing of recent laws calling for the federal authorities to lend on to students, bypassing establishments like Sallie Mae.
On July 1, 2010, Sallie Mae introduced that will probably be shifting its headquarters from Reston, Virginia, to its present facility in Newark, Delaware, in 2011.
On September 17, 2010, it was introduced that Sallie Mae will purchase federally insured loans from Citigroup-owned Student Loan Corporation value $28 billion.
On February 25, 2014, Sallie Mae introduced the brand new title for the student loan aspect which can be referred to as “Navient”.
The Sallie Mae company headquarters is in Newark, Delaware. Sallie Mae has workplaces in Newton, Massachusetts; Indianapolis, Indiana; Salt Lake City, Utah; and Reston, Virginia.
Raymond J. Quinlan is chairman of the Board of Directors. He joined the board in 2014 changing earlier chairman Anthony P. Terracciano—previously president of First Union Corporation (now Wells Fargo). Quinlan can be the chief govt workplace of Sallie Mae. He took over as CEO when the corporate introduced its strategic separation in May 2014. Albert Lord held the positions of vice chairman and CEO till his retirement 2013. Lord joined Sallie Mae in 1981, took over as CEO in 1995, and led the corporate’s privatization. On May 29, 2013, the board introduced Jack Remondi as Lord’s successor.
Through The Fund’s work, Sallie Mae was named amongst BusinessWeek’s Top 15 Corporate Philanthropists in 2004. The Washington Business Journal recognized the corporate as the highest native company philanthropist in 2005.
In the early 2010s, Kiplinger’s Personal Finance acknowledged Sallie Mae Bank because the Best Online Savings Account, the Best Money Market Account. “the best place to stash cash,” and the Best Savings Account.
A 60 Minutes section (initially aired May 7, 2006) examined Sallie Mae, together with its enterprise practices. Elizabeth Warren, then a professor at Harvard Law School and sharp critic of what she characterizes as unfair lending practices and later a US Senator, questioned Sallie Mae’s twin position as lender and collector of student loans.
In February 2007, New York Attorney General Andrew Cuomo launched an investigation into alleged misleading lending practices by student loan suppliers, together with The College Board, EduCap, Nelnet, Citibank, and Sallie Mae. On April 11, 2007, Cuomo ended his investigation of Sallie Mae and introduced that Sallie Mae had voluntarily agreed to vary its lending requirements to fulfill a brand new code of conduct for student loan practices established by Cuomo, and to donate $2 million (USD) to a fund dedicated to educating college-bound students about their loan choices.
On October 10, 2007, paperwork surfaced exhibiting that Sallie Mae was trying to make use of the Freedom of Information Act to drive schools to show over students’ private info. The college concerned, the State University of New York system, was anticipated to say no the request and be pressured to defend its place in court docket.
In December 2007, a category motion lawsuit was introduced in opposition to Sallie Mae in a Connecticut federal court docket alleging that the corporate discriminated in opposition to African American and Hispanic personal student loan candidates by charging them excessive rates of interest and costs. The lawsuit additionally alleged that Sallie Mae didn’t correctly disclose personal student loan phrases to unsuspecting students. New York Attorney General Andrew Cuomo, raised comparable issues about doable student loan redlining in June 2007. The lawsuit was settled and dismissed in 2011. Under the phrases of the settlement, Sallie Mae agreed to make a $500,000 donation to the United Negro College Fund and the attorneys for the plaintiffs acquired $1.8 million in attorneys’ charges.
On January 31, 2008, SLM Corporation had a lawsuit for failing to adequately reserve for losses in Sallie Mae’s non-traditional portfolio and paid $35,000,000 for settlement.
A False Claims swimsuit was filed in opposition to Sallie Mae by former U.S. Department of Education researcher, Dr. Oberg. The swimsuit alleges that Sallie Mae and different lenders intentionally overcharged the U.S. authorities. The findings by Oberg have been labeled amongst larger schooling coverage analysts because the 9.5 scandal.
On February 20, 2014, Illinois Attorney General Lisa Madigan’s workplace introduced that an investigation into Sallie Mae’s debt assortment practices and loan servicing practices had been opened.
On November 9, 2005, former Sallie Mae worker Michael Zahara filed a federal lawsuit in opposition to the corporate, alleging that it had a sample and observe of granting forbearance in a purposeful effort to extend complete student loan debt. On October 29, 2008, permission was granted to his authorized counsel to withdraw from the case, citing “From counsel’s perspective, a breakdown in trust has resulted from the discovery that Relator has been arrested for extortion, the circumstances surrounding that arrest, and Relator’s failure to disclose the arrest to counsel.” On March 12, 2009, the court docket dominated “dismissal without prejudice” as a result of “the plaintiff has failed to obtain substitute counsel by the deadline.” Zahara was in search of new counsel.
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