Sometimes, this involved making use of the muscle mass given by its part as a prominent purveyor of federal financial loans.
“Sallie Mae may be the student-loan industry’s Microsoft,” one contending servicer advised the Chronicle of degree in 2000. “[It] bundles the service to [banks and educational funding departments]. They claim, ‘If you would like you to originate and disburse the debts, you must offer them to united states at below-market prices.’”
In those times, the business increasing the businesses in predatory subprime personal financial loans, that it pushed on borrowers in an payday loans Port Clinton payday loans direct lender effort to close the student loan “donut gap” produced by soaring outlay. Inside company documentation reveal that Sallie Mae’s stronger move into dangerous, high-interest personal loans was underwritten from the fully guaranteed money Sallie Mae generated on FFEL loans. To put it differently, the United States federal government was immediately financing the slimiest practices of its personal partner-competitor.
Under the chairmanship of Albert Lord, Sallie Mae increased progressively comfy with Republican lawmakers within the plant era. The connection is a two way street: The government safeguarded Sallie Mae’s steady, no-questions access to FFEL revenue, and company amply backed GOP candidates and causes. (more…)