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 Sallie Mae was created in 1972 as a government sponsored enterprise to enhance public access to higher education by serving as a serving as a secondary market and warehousing entity for student loans. Sallie Mae offers existing and former student borrowers a wide variety of services including finding student loans and debt management.
History of Sallie Mae
While Sallie may have started out as a government enterprise back in 1972 by 1996 the SLMA Privatization Act was passed into law and allowed the creating of SLM Corporation, which is the holding company for Sallie Mae.
Sallie Mae student loan purchases are a substantial portion of the Family Federal Education Loan (FFEL) program. For example, in the years 1997 - 2000 Sallie Mae purchased roughly 25% of all the outstanding FFEL - that's nearly 40 billion dollars in student loans. Sallie Mae currently owns or manages student loans for nearly 10 million ex-students with loans valued in the area of $130 billion.
Sallie Mae operates loan servicing centers in Gilbert, Arizona; Panama City, Florida; Indianapolis, Indiana; Mount Laurel, New Jersey; Wilkes-Barre, Pennsylvania, and Killeen, Texas. Sallie Mae is both a Fortune 500 and Forbes 500 listed company and has been recognized as one of the 100 Best Corporate Citizens according to Business Ethics magazine.
Subsidiaries of Sallie Mae
In addition to the Sallie Mae name, SLM owns, operates or is affiliated with the following companies:
Academic Management Services Corp., Arrow Financial Services, First Trust Financial, General Revenue Corporation, GRP Financial Services, Nellie Mae, Noel-Levitz, Pioneer Credit Recovery Inc., Sallie Mae Bank, Sallie Mae Home Loans, Sallie Mae Inc., SLM Financial Corporation, Southwest Student Services Corporation, Student Assistance Corporation, Student Loan Finance Association, Student Loan Funding and Upromise.
Recent Corporate Developments
In August 2006, Sallie Mae acquired Upromise, a company that provides rebates to buyers of certain retail brands. In turn, these rebates can be applied to college savings accounts. Sallie Mae and Upromise are planning to co-market financial aid information, student loans and investment plans to both students and parents.
On April 16, 2007, Sallie Mae announced that an investor group led by J.C. Flowers & Co. had signed an agreement to buy Sallie Mae for $25 billion. That agreement has been in trouble since July 2007, when Flowers told Sallie Mae that he was having second thoughts because of a plan in the U.S. Congress was considering that involved reductions in government subsidies for student loans.
Sallie Mae Loans
Sallie Mae offers students, parents of students and former students a wide array of services including access to federal student loans, private loans and even post graduate student loan consolidation.
Federal Loans Offered Through Sallie Mae
Sallie Mae plays multiple roles in the student loan market place including the origination of loans and the purchase of loans. The student loans originated by Salle Mae include those offered under the Federal Family Education Loan Program (FFELP).
The types of student loans purchased by Sallie Mae include Stafford Loans - Subsidized and Unsubsidized, Parent Loans for Undergraduate Students (PLUS), Supplemental Loan for Students, Federal Insured Student Loans, and Health Education Assistance Loans (HEAL). Our article on Federal Student Loans contains more information on the types of student loans available through the federal government.
Sallie Mae Loan Rights and Responsibilities
Even if you have a loan through Sallie Mae, you still have rights and responsibilities as a borrower. This is an important point because with the rising costs of higher education, student loans can eat into a substantial portion of your first job's income.
Some of the rights that you have as a borrower include:
And as a borrower, you are responsible for the following:
- Repayment of you loan in a timely fashion - even if you are not happy with your post-educational outcome.
- Notifying the holder of your student loan of any change to your address or name.
- Finally, even if you place a request to have payments deferred, you must wait until you are granted written notice before you withhold payments.
In addition to federally funded student loans, Sallie Mae can help you find private education loans though lending partners. Sallie Mae has its own private loan program, which is privately insured and credit based. Both undergraduate and graduate students are eligible for this private loan program.
They also provide the convenience of creating "bundles" of both privately held and federally funded student loans that can be managed from one location including loan consolidation services.
Student Loan Consolidation
In addition to providing students with a way to manage their loans, Sallie Mae also offers student loan consolidation. Simply put, loan consolidation is a way for students to bundle their loans together into a new consolidated loan.
By consolidating a student loan, the borrower can reduce the number of monthly payments and even reduce the total payment. If the loan is a federal loan, the student has the opportunity to lock in a lower fixed rate, which can significantly reduce the interest paid on a loan.
And while you're consolidating your loans, you can choose a convenient loan repayment option including level payments, graduated, extended, and even an income-sensitive plan. Sallie Mae even offers private student loan consolidation if:
- You have a private student loan from a bank or credit union.
- You have at least $5,000 in student loans.
- You've got a good credit rating or a cosigner with a good credit rating.
- You've already graduated or you will be graduating from a postsecondary program.
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