Education Department To Renew Sallie Mae Contract, Despite Allegations Of Wrongdoing

[unhappycamper]

http://www.huffingtonpost.com/2013/11/29/education-department-sallie-mae_n_4351509.html

Education Department To Renew Sallie Mae Contract, Despite Allegations Of Wrongdoing
Shahien Nasiripour
Posted: 11/29/2013 9:34 am EST | Updated: 11/29/2013 10:32 am EST

Student loan giant Sallie Mae is currently under fire from lawmakers, federal regulators, consumer groups and student advocates for allegedly violating numerous consumer protection laws. The company is facing accusations that it cheats soldiers on active duty, engages in discriminatory lending, pushes borrowers into delinquency by improperly processing their monthly payments, and doesn't provide enough aid to borrowers in distress.

But to the Department of Education, Sallie Mae remains a trusted partner. In a previously unreported Oct. 25 letter, the contents of which were described to The Huffington Post and confirmed by the Education Department and by Sallie Mae, the agency said that it is moving to renew the student loan servicer's federal contract, which is currently set to expire in June.

The new contract, which would run through June 2019, is potentially worth hundreds of millions of dollars. Last year, Sallie Mae recorded $84 million in revenue from its Education Department contracts. But the company wants more.

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Sallie Mae, the nation’s largest company in terms of student loans owned and serviced, is facing criticism from at least three federal agencies and powerful lawmakers in Washington for a variety of alleged misdeeds. The company says the Federal Deposit Insurance Corp. has already told it to expect to be publicly sanctioned for alleged wrongdoing. The Consumer Financial Protection Bureau and the Department of Justice are also probing Sallie Mae over allegations it violated the Servicemembers Civil Relief Act, which is intended to ease financial pressures on active-duty members of the military, and broke other laws.