Sallie Mae has been able to largely escape the controversies that have swirled around the high level of student loan debt.
However, the Christiana-Stanton company on Thursday found itself as the subject of a less-than-flattering story on NBC Nightly News’ report.
A reporter for the Comcast-owned network showed up at the Delaware company’s sales recognition event on the Hawaii island of Mauri, asking about the wisdom of holding the conference at a time when many Americans are struggling with heavy student debt loads.
The reporter confronted Sallie Mae CEO, Raymond Quinlan, who defended the event thousands of miles away from hits headquarters as a reward for hard work by staffers.
A big part of the story was the struggle of a borrower who saw a $120,000 loan balloon into $300,000 in debt.
Sallie Mae told NBC that its legacy loans are now handled by Wilmington-based Navient. Sallie Mae, spun off Navient as a separate company that services student loans.
Navient has been offering a fierce defense of its practices as it faces legal actions from states and even the federal Consumer Financial Protection Bureau. So far, Navient has been unable to get the CFPB action dismissed.
Sallie Mae now offers private student loans and recently added credit cards, including one that allows borrowers to use the cashback feature to be applied to balances of student loans.
The company has beefed up its presence in Delaware by opening a servicing center in New Castle after banker HSBC vacated the space.
Sallie Mae issued the following response to the NBC report:
We are proud of the work we do to help families responsibly pay for college and stand by our record. Here are the facts:
- 98% of our customers successfully manage their loans, less than 2% default each year, and our typical customer pays off in 7 years.
- 92% of the $1.6 trillion in student loans in this country are federal student loans; 1.4% are private student loans owned by Sallie Mae.
- The woman profiled in the story is not a Sallie Mae customer, she has not sued Sallie Mae, and her level of student loan debt is highly uncommon.
- According to the Federal Reserve Bank of New York: 65% of those with student loans have balances under $25,000, and only 5% have balances over $100,000.
College should be more affordable, and student loan providers have an obligation to lend responsibly. That’s why we assess every applicant’s financial situation, and if they haven’t demonstrated their ability to handle the debt, we say no.
Education is an investment in one’s future, and that investment is transformative. We support efforts that provide access to higher education to those in need of assistance. There is a real conversation to be had about college affordability and student lending, but it cannot take place without the facts.
