Issuing student loans may seem a rather innocuous task, but it is huge money. Sallie Mae currently is administering over 130 billion dollars in debt issued to individauls for the purpose of paying for college and post graduate school.
The history of the Student Loan Marketing Association, better known as Salllie Mae, is an odd one. It was originally a government agency of a sort created in 1972 to administer and guarantee federal student loans.
Over the next three decades, the quasi-agency carried out its task with little publicity or issue. It is hard to overestimate how many people, myself included, were able to go to college because of the work done by it.
Don't fix something that isn't broken. It is a common statement, and one not followed here. Sallie Mae was privatized in 2004. You, I and just about everyone can buy its stock on the stock market and profits have become a big deal.
Once a company goes public, the emphasis of the business quickly changes. Shareholders have to be kept happy and that means only one thing. Profits. Sallie Mae certainly focuses on them now. Many feel this has led to serious problems.
Last year, an large investment fund made an offer to purchase the company for many billions of dollars. This would have effectively taken the entity private. Controversy raged and the deal fell through due to credit problems.
The evolution of Sallie Mae from friendly government agency to publicly traded company has involved the creation of a certain predator element. The company have been warned and sued by states for breaking laws while seeking repayments.
Sallie Mae has also been pressuring universities to turn over information on students pursuant to the Freedom of Information Act. Universities have balked and the bad publicity has resulted in Sallie Mae stepping back for now.
So, how should one view Sallie Mae these days? Well, it is still the number one source of funding for college students by far, so one can only criticize it so far.
