Sallie Mae Bank
Is This Your Business?Author: Kaitlyn Short
LAST UPDATED: April 22nd, 2021
Sallie Mae stands for Student Loan Marketing Association, the largest private student loan company in the world. It started in 1973 as a government student loan business in Delaware, New Jersey. From that, it provided, serviced and collected on private student loans. As of 2014, Sallie Mae has turned their private student loans accounts over to Navient Corporation, a federal student loan servicer and collector. Today, it still provides K-12, undergraduate and graduate loans; investment products, credit cards, various insurance plans, and financial programs for college students. The CEO is Raymond J. Quinlan.
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The Good
- Financing and products
- Student loans
- Credit cards
- Insurance
- Upromise rewards
Financing and Products
Sallie Mae provides financing, insurance products, credit cards, and insurance plans for students of all ages. They help individuals and families who cannot afford quality and higher education. They offer some student loans at a 2.25% interest rate, a comparatively low amount, and have no fee to originate. These products give students and their parents several repayment choices and special accommodations at a fixed or flexible rate.Student Loans
- K-12 Family Education Loan for private school tuition and expenses
- Undergraduate and Graduate Smart Option Student Loan for tuition, books and other college expenses with options to pay after or during college
- Career Training Smart Option Student Loan for educational expenses to be paid off during college
- Medical Residency and Relocation Loan for medical school and relocation expenses during and/or after residency
- Dental Residency and Relocation for dental school and relocation expenses for residency
- Bar Study Loan for law school expenses while studying for and taking bar exams
- High Yield Savings Account has no minimum deposit and no monthly fee at a 0.80% interest rate
- Money Market has no minimum deposit, no monthly fee, and direct account check writing at a 0.90% interest rate
- Certificate of Deposit has no monthly fee and guarantees returns, at a 1.25% to 2.08% interest rate
Credit Cards
- Upromise Master Card has a chip for more secure use, no annual fee, unlimited cash back on specified purchases, $0 fraud liability, and cash back bonuses
- Sallie Mae Master Card offers cash back on book, gas and grocery purchases, has no annual fee and rewards that don't expire.
Insurance
- Tuition Refund Insurance covers 100% of tuition and other education costs that would normally be lost in the event of a medical or mental health condition withdrawal.
- Other Insurances Sallie Mae offers include renter's insurance, term and whole life insurance, auto, health, short term medical and international student health insurance. Some of these insurances are tailored to student needs, such as the International Student Health Insurance plan, a coverage that only costs between $27 and $116 a month, depending on the amount of coverage the customer wants.
Upromise Rewards
This is a cash back rewards program for students. The customer shops online or eats out and receives cash back that can be applied to college expenses.The Bad
- No ATMs
- Federal student loan lobbying
- Customer complaints
No ATMs
There are no ATM's from which money from a Sallie Mae checking account can be withdrawn. Withdrawals must be done through a money transfer to a linked account, and takes 2-3 business days to process. Twenty percent of students who owe on student loans in the USA are Sallie Mae clients. Of those customers, 20% of them are in default and 11% of them continued in default after leaving forbearance. This is not a surprising number when one considers the comparatively high interest rate (6 %+) some Sallie Mae students loans have.Federal Student Loan Lobbying
Sallie Mae spends millions of dollars lobbying against federal student loan policies in order to promote their business, which offers students loan at a much higher interest rate that makes it difficult for many students to pay off their loans and stay out of debt. Sallie Mae is affiliated with the American Legislative Exchange Council (ALEC), an organization that supports controversial legislation such as "stand your ground", "right to word", and voter ID. Their supportive positions with these policies have won them negative attention and criticism along with the withdrawal of ALEC membership from several organizations following Sallie Mae's joining. Other Sallie Mae concerns include:- Lawsuits: Sallie Mae has a history of settling lawsuits out of court that accuse them of discriminating against minorities and low income borrowers. As a result, they faced class action lawsuits from their executives about granting loans to borrowers who they knew could not afford them.
- Collections: Some customers accuse Sallie Mae of being ruthless when it comes to collecting money owed. It appears that their only focus is to collect payments, with no regard to the needs of the customers. The problems that are identified are high interest rates and inflexible rules with current paying customers. They also are accused of exercising insensitive tactics to collect money owed, even with customers who pay on time or are experiencing difficulty with payments and need to consolidate loans, refinance or go into forbearance.
Customer Complaints
One student claims that Sallie Mae took money out of her account even though her loans were not delinquent. Another student said he is a victim of identity theft from a Sallie Mae loan. It caused his wages and income taxes to be garnished instead of correcting the matter.The Bottom Line
- Solid student loans service
- Rewards program
- Numerous lawsuits
- Strict collections
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