Keep a Wary Eye on Sallie Mae

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Sallie Mae

June 9, 2014: University Herald

If you’re concerned about the progress of young people in the nonprofit world, you must be wary of anything connected to Sallie Mae, the longtime education loan servicer. Its reputation tarnished by years of controversies and scandals, this year Sallie Mae split into two entities, a firm called Navient, which is basically the old Sallie Mae servicing government issued loans for college students, and the new Sallie Mae, which says it wants to be a financial services firm serving college students and their families, offering loans, credit cards, and insurance products.

Sallie Mae has long been the subject of numerous investigations for its less than salutary practices. The latest was last month when the Justice Department fined Sallie Mae and the new Navient $97 million for having inappropriately charged active-duty members of the military high interest rates and late fees on their loans in violation of the Servicemembers Civil Relief Act. For the last decade or so, Sallie Mae has been reviewed, critiqued, investigated, and fined for alleged deceptive lending practices, discrimination against black and Latino loan applicants, maintaining inadequate reserves, and questionable debt collection practices.

On the heels of the settlement agreement with Justice regarding overcharging members of the military, Navient is somehow one of four bidders shortlisted by Arne Duncan’s Department of Education for a contract worth close to $900 million. The contract would enable the firm, if selected, to originate and disburse loans and grants in furtherance of Education’s “Funding America’s Future, One Student at a Time” mission. With dogged journalism, Shahien Nasipour of the Huffington Post has been on the Navient trail and broke the story about the potential Navient contract.

Is no one paying attention at Education or the White House? How could a firm like Sallie Mae/Navient, investigated over and over again, charged and convicted of overcharging active-duty military just last month, still be on the shortlist for a major federal contract? Is the nation that hard up to find competent student loan servicers?

Maybe no one is paying attention. Look at President Obama’s FY2015 budget. As young nonprofit workers know very well, the Public Service Loan Forgiveness program, started in 2007, would forgive the remaining federal student loan indebtedness of borrowers if they worked for public agencies or 501(c)(3) nonprofits and made payments for ten years, even if only nominal payments. The president’s budget proposal, however, would cap the maximum amount of indebtedness that could be forgiven to $57,500. While the president’s budget proposals on most items have generated little traction in Congress, assume this one were to be enacted. Maybe existing student loan borrowers would be grandfathered with the no-cap PSLF structure and it would only apply to new borrowers, but the beneficiary of a cap is not the borrower, but the lender and servicer, that is, potentially hard-pressed, multiply-fined Sallie/Navient.

Sallie Mae’s CEO, John Remondi, won’t have trouble paying back his student loans, if any. His reported total compensation just from Sallie Mae/Navient in 2013, excluding compensation from his service on other corporate boards, etc.? $5,462,776.—Rick Cohen

  • Terry

    I believe it. I have an ongoing problem with them not giving me credit for three payments within the past twelve months (total of $540). I’ve sent them bank documents (twice) and they can’t seem to correct their error. I get emotional every time I call because the person I speak to doesn’t speak English clearly. They don’t even understand what I’m trying to tell them. After being put on hold several times, I’m so frustrated I have to just tell them I have to call later and hang up.

    I sure wish I could find someone to help me out. I’m sure it’s not just happening to me.

  • Patricia Nash Christel, Navient

    Terry, I’m sorry you’re having difficulty. Please email Navient’s customer advocate office ( so we can assist you.

    Navient has a strong track record of assisting customers to navigate the path to financial success. In fact, we’ve helped more Americans stay on track with their student loan payments than other federal Direct Loan servicers. According to the most recent Direct Loan servicing results released by the Department of Education, the default rate of federal Direct Loan customers whose loans are serviced by Navient was 25 percent lower (.73% compared to 0.97%) and the dollar amount defaulted was 35 percent lower (.40% compared to .62%) than the next best performer. A lower rate means that fewer customers defaulted and more are successfully managing their payments. For more information about Navient, please visit

  • desperate to get out from under this loan

    Hi, I currently owe 29,850.00 to Sallie Mae/Navient. I have been paying them for about 4 years now. I can only afford the very minimum payment. I have good credit and pay all of my bills (car payment, utilities, rent, cell phone etc.) on time every month. I do not have credit cards or any other debt besides this student loan and my monthly bills mentioned above. Problem is I can not get any type of credit for a loan or store credit card (I only asked for $1,500 to help my Mom with some bills) because of this student loan is weighing down my income to debt ratio. I am prior military my husband is still active duty and I currently work full time for the federal goverment. I have looked into the Student Loan Forgiveness program but it does not apply to Sallie Mae. From the looks of it I wont be able to co-sign for a house with my husband because the lending company sees this massive student loan debt and wont give me a chance, eventhough I am never late with a single payment on any bills.
    Is there another way to go about the forgiveness program??

  • Suzan Cahanin

    None of this is surprising! I am 61 years old and about to retire. I borrowed $22K for graduate school. When I finished, I consolidated them with Sallie Mae, only to discover the new amount that had accrued interest, was almost $32K. I have been paying, on time, for over 17 years and my principle is just now down to what I had borrowed originally. I have applied for teacher forgiveness twice and have been turned down twice. I recently applied for a Public Servant forgiveness. We’ll see! I work at a Title 1 school in Special Education. Come on Sallie Mae/Navient! Have mercy on an old lady!!! Really hate retiring with this debt. I have already paid back the amount that I borrowed. MY BEST ADVICE IS DO NOT TAKE OUT STUDENT LOANS. Work your way through school!!!

  • An African American women with a serious hardship

    Hello, I am 31 yrs old earning less than 40k a year. In total, I owe over 116,000 in student loans, Sallie Mae or Navient is where I owe the most Instead of working with me they have put me on an interest based program that is 165.16 but I also have to make a payment of 256 dollars to them for my Educational loans, I am sick ans tired talking to them on the phone. I spoke with a supervisor by the name of Ms. Fulton and I had to hold myself back from cursing at her. As I am writing this, tears are flowing from my eyes and everyday I wonder will I ever break even. I have not bought anything new for myself because every two weeks I am giving Navient money so that they will not call me, My prayer is hit the Lottery and pay off all my debt but I know my chances are slim. I thought this Student Loan Forgiveness program was going to be my savior after working in the school system for over 5 years. I ask if there is anyone who can assist, please feel to offer some resources that can save from this “Student Loan Service Provider.”

    Thank you

  • Jason Conners

    do not pay them. file bankruptcy against them. Sallie Mae is a corrupt and universally hated organization. Our own government has fined them millions for cheating students and military. I can;t imagine any judge that wouldn’t grant a discharge of your loans in your situation. Don;t let this get you down. Learn to live without credit, you will be much happier in the end.

  • Jessie

    I don’t even know how I got a student loan with navient/salliemae. I never received a high school diploma and never took an entry test for the school. I was invited to attend a tour and attend a class to see if I like it even though I was not eligible. Now I have a 30k loan and the school didn’t even accept me because I didn’t have a high school diploma but yet the loan still stands and I wasn’t even able to finish. I feel there is definitely something wrong here. Why I tried to contact navient they transfer me to several departments until I was in collections and treated like I was an animal. This is a horrible company.