“Sallie Mae is the student-loan markets’s Microsoft,” one contending servicer advised the Chronicle of Higher Education in 2000. “[It] bundles their services to [banks and school funding departments]. People say, ‘If you want us to originate and disburse the financing, you have to offer these to you at below-market prices.’”
During this period, the company enhanced its companies in predatory subprime personal financial loans, which it forced on individuals in an effort to nearby the education loan “donut gap” created by rising expenses. Inner organization papers reveal quick payday loans Shelby that Sallie Mae’s strong move into high-risk, high-interest personal loans is underwritten by the guaranteed in full money Sallie Mae made on FFEL debts. Put another way, the usa federal government is right funding the slimiest tactics of their exclusive partner-competitor.
Within the chairmanship of Albert Lord, Sallie Mae became more and more relaxing with Republican lawmakers for the Bush era. The connection got a two way road: The management protected Sallie Mae’s steady, no-questions the means to access FFEL revenue, plus the team nicely backed GOP candidates and causes. It actually was, definitely, an outrageously corrupt and ineffective arrangement, with taxpayers subsidizing both governmental kickbacks and lobbying prices. The relationship ended up being consummated in 2004, whenever Sallie Mae was actually permitted to go completely exclusive — without any chat of stopping the subsidy or regulating wages and expenses.
It actually was therefore a double party as soon as the SLM organization donated $250,000 — the most enabled by-law — to the 2004 plant Inauguration. Sallie Mae CEO Albert Lord produced a particularly close connection with Kansas Republican John Boehner, a regular guest on SLM’s corporate aircraft which cosponsored an event the company threw during 2004 Republican National Convention. (more…)