Sallie Mae controversies
Controversies tied to this brand in public sources. A listing is not a finding of fault.
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2014
Illinois investigation into servicing and collection
The Illinois attorney general’s office opened an investigation into Sallie Mae’s debt-collection and loan-servicing practices.
2009
9.5 scandal False Claims litigation
A former Department of Education researcher filed a False Claims action alleging that Sallie Mae and other lenders overcharged the federal government through treatment of certain subsidized loan claims. The allegations became associated with the education-finance industry’s so-called 9.5 scandal.
2008
Non-traditional portfolio reserve settlement
SLM Corporation paid $35 million to settle litigation alleging that it had not adequately reserved for losses in a non-traditional loan portfolio.
2007
New York lending-practices investigation
New York Attorney General Andrew Cuomo investigated several education lenders, including Sallie Mae, over alleged deceptive practices. Sallie Mae agreed to change lending standards and contribute $2 million to borrower-education efforts.
2007
Student-information disclosure dispute
Documents indicated that Sallie Mae sought student information from colleges through Freedom of Information Act procedures, prompting concerns about the privacy of student records.
2007
Private-loan discrimination class action
A Connecticut federal class action alleged that Sallie Mae charged African American and Hispanic applicants higher interest rates and fees and inadequately disclosed private-loan terms. The case was settled and dismissed in 2011; the company agreed to contribute $500,000 to the United Negro College Fund, while plaintiffs’ counsel received legal fees.
2006
Student-lending practices examined by 60 Minutes
A 60 Minutes report examined Sallie Mae’s business practices and the tension created by its historical role as both a lender and a collector of student debt. Elizabeth Warren, then a Harvard Law School professor, criticized practices she viewed as unfair to borrowers.
2005
Former-employee forbearance lawsuit
A former employee alleged that Sallie Mae deliberately granted forbearances in a way that increased borrowers’ total debt. The federal case was dismissed without prejudice in 2009 after the plaintiff failed to obtain replacement counsel.