|Formerly||Student Loan Marketing Association|
S&P 400 Component
|Headquarters||Newark, Delaware, U.S.|
SLM Corporation (commonly known as Sallie Mae; originally the Student Loan Marketing Association) is a publicly traded U.S. corporation that provides consumer banking. Its nature has changed dramatically since it was set up in 1973. At first, it was a government entity that serviced federal education loans. It then became private and started offering private student loans, although at one point it had a contract to service federal loans.
The company's primary business is creating, servicing, and collecting private education loans. The company also provides college savings tools such as its Upromise Rewards business and online planning for college tools and resources. Sallie Mae previously originated federally guaranteed student loans originated under the Federal Family Education Loan Program (FFELP). and worked as a servicer and collector of federal student loans on behalf of the Department of Education. The company now offers private education loans and manages more than $12.97 billion in assets. Sallie Mae employs 1,400 individuals at offices across the U.S.
On April 30, 2014, Sallie Mae spun off its loan servicing operation and most of its loan portfolio into a separate, publicly traded entity called Navient Corporation. Navient is the largest servicer of federal student loans and acts as a collector on behalf of the Department of Education.
The Student Loan Marketing Association was originally created in 1972 as a government-sponsored enterprise (GSE) and began privatizing its operations in 1997, a process it completed at the end of 2004 when Congress terminated its federal charter, ending its ties to the government. The company provides private education loans for students and their families. These loans are not made, insured, or guaranteed by any state or federal government.
In August 2006, Sallie Mae acquired Upromise, a company that provides rebates to buyers of certain brands, which can be applied to college savings accounts. Sallie Mae and Upromise plan to market comprehensive financial packages to parents and students, including investment plans, financial aid information, and student loans.
On April 16, 2007, Sallie Mae announced that an investor group led by J.C. Flowers & Co. signed an agreement to purchase Sallie Mae for approximately $25 billion. Had the transaction completed, J.C. Flowers along with private-equity firm Friedman Fleischer & Lowe would have owned 50.2% of Sallie Mae, and Bank of America and JPMorgan Chase would each have owned 24.9%. Sallie Mae would have ceased to be a publicly traded company. The deal fell through in September 2007, with the buyers blaming adverse changes to the business's outlook as a result of the College Cost Reduction and Access Act of 2007 and the tightening of global credit markets following the 2007 subprime mortgage financial crisis. Sallie Mae subsequently began legal action, only to drop it in January 2008 upon completion of a $31 billion funding round, including funding from Bank of America.
On April 6, 2009, Sallie Mae announced that it will move 2,000 jobs back to the U.S. within the next 18 months as it shifts call center and other operations from overseas.
On March 31, 2010, Sallie Mae announced the impending layoff of 2,500 employees in response to the signing of new legislation calling for the federal government to lend directly to students, bypassing institutions like Sallie Mae.
SLM Corporation, the company that operates Sallie Mae, was formed in 2013.
On February 25, 2014, Sallie Mae announced the new name for the student loan side which will be called "Navient".
Raymond J. Quinlan is chairman of the Board of Directors. He joined the board in 2014 replacing previous chairman Anthony P. Terracciano—formerly president of First Union Corporation (now Wells Fargo). Quinlan is also the chief executive office of Sallie Mae. He took over as CEO when the company announced its strategic separation in May 2014. Albert Lord held the positions of vice chairman and CEO until his retirement 2013. Lord joined Sallie Mae in 1981, took over as CEO in 1995, and led the company's privatization. On May 29, 2013, the board announced Jack Remondi as Lord's successor.
Through The Fund's work, Sallie Mae was named among BusinessWeek's Top 15 Corporate Philanthropists in 2004. The Washington Business Journal identified the company as the top local corporate philanthropist in 2005.
In the early 2010s, Kiplinger's Personal Finance recognized Sallie Mae Bank as the Best Online Savings Account, the Best Money Market Account. “the best place to stash cash,” and the Best Savings Account.
A 60 Minutes segment (originally aired May 7, 2006) examined Sallie Mae, including its business 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 dual role as lender and collector of student loans.
In February 2007, New York Attorney General Andrew Cuomo launched an investigation into alleged deceptive lending practices by student loan providers, including The College Board, EduCap, Nelnet, Citibank, and Sallie Mae. On April 11, 2007, Cuomo ended his investigation of Sallie Mae and announced that Sallie Mae had voluntarily agreed to change its lending standards to satisfy a new code of conduct for student loan practices established by Cuomo, and to donate $2 million (USD) to a fund devoted to educating college-bound students about their loan options.
On October 10, 2007, documents surfaced showing that Sallie Mae was attempting to use the Freedom of Information Act to force colleges to turn over students' personal information. The university involved, the State University of New York system, was expected to decline the request and be forced to defend its position in court.
In December 2007, a class action lawsuit was brought against Sallie Mae in a Connecticut federal court alleging that the company discriminated against African American and Hispanic private student loan applicants by charging them high interest rates and fees. The lawsuit also alleged that Sallie Mae failed to properly disclose private student loan terms to unsuspecting students. New York Attorney General Andrew Cuomo, raised similar concerns about possible student loan redlining in June 2007. The lawsuit was settled and dismissed in 2011. Under the terms of the settlement, Sallie Mae agreed to make a $500,000 donation to the United Negro College Fund and the attorneys for the plaintiffs received $1.8 million in attorneys' fees.
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 suit was filed against Sallie Mae by former U.S. Department of Education researcher, Dr. Oberg. The suit alleges that Sallie Mae and other lenders deliberately overcharged the U.S. government. The findings by Oberg were labeled among higher education policy analysts as the 9.5 scandal.
On November 9, 2005, former Sallie Mae employee Michael Zahara filed a federal lawsuit against the company, alleging that it had a pattern and practice of granting forbearance in a purposeful effort to increase total student loan debt. On October 29, 2008, permission was granted to his legal 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 ruled "dismissal without prejudice" because "the plaintiff has failed to obtain substitute counsel by the deadline." Zahara was seeking new counsel.
- Sallie Mae Bank
- SLM Financial Corporation
- "2014 Year End Earnings (2014) Sallie Mae" (web). Retrieved 11 March 2015.
- "Reuters SLM Corp. Profile". Reuters. Retrieved 2009-10-06.
- "Yahoo Finance SLM Corp. Profile". Yahoo Finance. Retrieved 2009-10-06.
- “Sallie Mae Completes Strategic Separation.”, March 11, 2015.
- Farrington, Robert. "How The Sallie Mae and Navient Split May Help Student Loan Borrowers". Forbes. Retrieved 2021-05-14.
- "Federal Student Aid". studentaid.gov. Retrieved 2021-05-14.
- Drinkard, Jim (2005-01-17). "Donors get good seats, great access this week". USA Today. Retrieved 2008-05-25.
- "Financing the inauguration". USA Today. January 16, 2005. Retrieved 2008-05-25.
- "Some question inaugural's multi-million price tag". USA Today. 2005-01-14. Retrieved 2008-05-25.
- "Upromise to be bought by Sallie Mae". Boston Business Journal. 1 June 2006. Retrieved 18 December 2020.
- "Investor group to buy Sallie Mae for $25 billion". Sallie Mae, Inc. Archived from the original on April 22, 2008. Retrieved July 25, 2014.
- "College Cost Reduction and Access Act" (PDF). U.S. Government Printing Office. September 27, 2007. Retrieved July 25, 2014.
- Wighton, David; Politi, James (September 27, 2007). "JC Flowers team drops Sallie Mae bid". The Financial Times. Retrieved July 25, 2014.
- "Sallie Mae drops takeover lawsuit". BBC News. London: BBC. January 29, 2008. Retrieved July 25, 2014.
- Spalding, Tom (April 6, 2009). "Sallie Mae to add 2,000 jobs in U.S." Indianapolis Star. Retrieved July 25, 2014.
- Chernenkoff, Kelly (March 31, 2010). "Sallie Mae Blames 2,500 Layoffs on Obama's Student Loan Overhaul". FOX News. Retrieved March 31, 2010.
- Hilzenrath, David S. (July 2, 2010). "Sallie Mae to move headquarters from Reston to Delaware, taking hundred of jobs". The Washington Post. Washington DC: WPC. ISSN 0190-8286. Retrieved July 25, 2014.
- "Citigroup quits student loan business". United Press International. September 18, 2010. Retrieved July 25, 2014.
- "SLM Corporation Form 10-K". Securities and Exchange Commission. Retrieved May 14, 2021.
- "Sallie Mae Selects Navient as Name For New Loan Management, Servicing, and Asset Recovery Company". Sallie Mae Online Newsroom. February 25, 2014. Retrieved July 25, 2014.
- “Sallie Mae Appoints Vice Chairman.”, 2 April 2015.
- “Sallie Mae Who We Are.”, 2 April 2015.
- Mulholland, Sarah (May 29, 2013). "Sallie Mae to Split Into Two Companies as Remondi Named CEO". Bloomberg. Retrieved July 25, 2014.
- Adler, Neil (May 5, 2005). "Sallie Mae tops philanthropy list". Washington Business Journal. Retrieved July 25, 2014.
- “Sallie Mae Simplifies Saving and Banking.”, 13 April 2015.
- “Kiplinger Names Sallie Mae Best Money Market Account.”, 13 April 2015.
- “Sallie Mae Money Market Account Recognized Top Savings Option.”, 13 April 2015.
- “The Best of Everything, 2013.”, 13 April 2015.
- Schorn, Daniel (May 5, 2006). "Sallie Mae's Success Too Costly?". CBS News. New York: CBS. Archived from the original on February 3, 2011. Retrieved July 25, 2014.
- "Boston Globe". Archived from the original on April 30, 2008.
- Burd, Stephen (October 9, 2007). "Sallie Mae Demands SUNY Colleges Turn Over Students' Personal Data". New America Foundation. Archived from the original on October 24, 2008. Retrieved November 17, 2008.
- "Sasha Rodriguez & Cathelyn Gregoire on Behalf of All Persons Similarly Situated vs. Sallie Mae (SLM) Corporation" (PDF). New America Foundation. December 17, 2007. Archived from the original (PDF) on October 6, 2014. Retrieved July 25, 2014.
- Guess, Andy (2007-07-05). "'Redlining' or Reasonable Criterion?". Inside Higher Ed. Retrieved 2009-07-17.
- "SDSD District Version 1.3". United States District Court for the District of Connecticut. Retrieved July 25, 2014.
- "SDSD District Version 1.3". United States District Court for the District of Connecticut. Retrieved July 25, 2014.
- "SLM Corporation (a/k/a Sallie Mae)". Archived from the original on September 21, 2012.
- Field, Kelly (August 15, 2010). "Nelnet to Pay $55-Million to Resolve Whistle-Blower Lawsuit". The Chronicle of Higher Education. Retrieved July 25, 2014.
- The 9.5 Scandal | NewAmerica.net The 9.5 Scandal Archived June 15, 2011, at the Wayback Machine
- "Sallie Mae's Student Lending, Collections Under Multistate Probe". Collections & Credit Risk. February 21, 2014. Archived from the original on February 27, 2014. Retrieved July 25, 2014.
- "United States Of America ex-rel. Michael Zahara, vs. SLM Corporation et al" (PDF). Student Loan Stories. October 29, 2008. Retrieved July 25, 2014.
- "Man jailed in extortion bid against candidate". Las Vegas Review-Journal. July 24, 2008. Retrieved July 25, 2014.
- "Lawsuits Against Salle Mae". PBS. June 19, 2009. Retrieved July 25, 2014.
- Schemo, Diana Jean (June 10, 2007). "Private Loans Deepen a Crisis in Student Debt". The New York Times.
- "College, Inc". PBS FRONTLINE. May 4, 2010.
- Bigda, Carolyn (February 16, 2015). "What You Need To Know About Private Student Loan". Chicago Tribune.
- Mulholland, Sarah (February 25, 2014). "Sallie Mae Names Education Unit Navient as Lender Splits in Two". Bloomberg.
- Seder, Andrew M. (May 29, 2013). "Sallie Mae will split, become two companies". Associated Press.
- Carrns, Ann (March 6, 2013). "Sallie Mae Lowers Top Loan Rates for Graduate Students". New York Times.
- Simon, Ruth (April 5, 2013). "New Options for Student-Loan Borrowers". Wall Street Journal.
- Gobel, Reyna (May 22, 2013). "Smart Ways to Mix Student Loans, College Savings". U.S. News & World Report.