Sallie Mae is the largest company that makes student loans. They were founded as a Government Sponsored Entity (GSE) like Fannie Mae or Freddie Mac, but in 2004 they became the first ever of the GSEs to go totally private. Their stock has returned over 1900% since 1995, while they continue receiving billions of dollars in federal subsidies every year.
Their record of manipulating politics for profit, all at the expense of students and taxpayers, gaining "powers that would make a mobster envious" to retrieve their cash plus penalties and fees, I believe could be up there alongside Halliburton or any other Bush and Cheney-crony you could name. And now, just maybe, they're going down.
See, last week, Al Lord, former chairman and CEO who masterminded Sallie Mae's transition to a private company, decided to unload 1/3 of his stock in the company. . . just days before President Bush unveiled a proposed multibillion dollar cut in subsidies to the industry, sending the stock to a 2-year low. And today, the chairmen of the House Financial Services and Education committees (both Democrats, natch) are writing letters to the White House and to Sallie Mae demanding information on the sale.
In three years of covering this issue, I have come to believe that the only thing that's stopped Sallie Mae from gaining the reputation it deserves is the public's lack of understanding about the egregiously complex issue of student loan debt, and debt in general. But a dirty stock sale? That we can all get.
Tuesday, February 13, 2007
Lord, Lord--See the Sallie Mae Corruption
CEO Al Lord has taken home $280,000,000 in salary over the past five years from Sallie Mae, but I guess that just wasn't enough. A few days before cuts in the student loan subsidies to Sallie Mae were announced, Al dumped a third of his stock. The story from Huffington:
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Hi and i totally agree with your perspective sallie mae iey s a corrupt company hell bent on making money any way possible. I just paid a 150.00 forbeareance fee to bring my account up to speed and I recieved the bill today. Orginally i owed 62,000 now its 145,000. They charged me 60,000 plus when i paid that forbearence fee. OMG I do not know what to do at all. I am thinking of killing myself just to ignore the debt all together.
ReplyDeleteHello,
ReplyDeleteSallie mae had sent a check to Advanced Centers Of Technology and Training, Quincy, MA. on my behalf. The school closed before I could finish the first course. Sallie Mae and the DOE of Mass. contacted me and asked me to send in my paperwork. I sent them the paperwork, then the DOE asked me to resend it. Then I did and I didn't hear anything in over two years. I check my credit report and it is on there. After months of phone calls to sallie mae and Mass. DOE I the DOE tells me it is under investigation. But it is on my credit report as I owe. But sallie mae has it under Admin Forbearance. Sallie Mae says it should not be a negative right now on my credit report. But they also say they do not report it to the bureaus, they said that the MASS DOE does. Of course the Mass DOE says that Sallie MAE does. I have wrote to Senators, Congressman, State Representatives,Sallie Mae, and the Mass DOE. NOW Progressive Financial Services is calling me trying to collect saying they just haven't received all the paperwork from Sallie Mae yet and they would like to know the status of my account. Then finaly I send paperwork over and they agree that it is being under investigation and I should not be receiving any more calls from them. But I do and I receive letters and I call and I call. Well there is plenty more to write but if anyone is experiencing any of this also or went to ACTT in Quincy MA. Please email me at mattelliot@comcast.net and also visit Studentloanjustice.org.
Thank You,
Matt
Hello, I commend you for your statements. You might also be more enraged by the fact that UCLA, the institution that I attend, only allows Wells Fargo loans to be certified with Sallie Mae because Wells Fargo will not use their certification software (Opennet). Sallie Mae has repeatedly paid for golf trips for the Director of Financial Aid at UCLA(Ron Johnson)with Tiger Woods and in order to keep Sallie Mae from loosing all Wells Fargo loans, they have closed open certification on particularly Wells Fargo student loans (contrary to Federal Law) and all electronic certification is automatically certified by Sallie Mae. Let it be known that all Financial Aid at UCLA is electronically certified, and if you go to the financial aid office they will tell you to go online and accept your loans, since the entire system is electronic and that is the only way students can accept their student loans. It is illegal to have preferential guarantors just as it is illegal to have a preferential lender list. Sallie Mae's corruption is not limited to Capitol Hill, it extends into our universities and entire educational system.
ReplyDelete-Tricia
Predatory lenders took advantage of needy students by charging them interest rates of 14% and higher. These loans have now ballooned, and doubled. There are NO conumer protections for borrowers of private student loans. These students were expoloited by preditory lenders.
ReplyDeleteThe current lending system (for private student loans) invites profiteering on behalf of the banks. Many students are defaulting on their private loans because the payments were too high- due to the fact that their loan doubled in size. No wonder Sallie Mae is being sued by their own investors! The NEW class action law suit, for 2012- states that they lowered the borrowing requirements, and gave out private loans that they shouldn't have given out (at very high interest rates). So, these loans were NOT properly secured. Also, Sallie Mae pushed all private loans into forbearance so investors wouldn't see all the delinquencies on the private loans.