February 25, 2014

Huffington Post: Elizabeth Warren: Sallie Mae May Be Hurting Borrowers, Taxpayers

By Shahien Nasiripour

February 25, 2014

For student loan giant Sallie Mae, it may seem that every passing day brings word of yet another government probe.

On Tuesday, it was Sen. Elizabeth Warren's turn.

Warren, a Democrat from Massachusetts, wants detailed information on Sallie Mae's practices, including scripts its customer service representatives follow, an accounting of its borrowers with federal student loans in income-based repayment plans, and the number of its delinquent borrowers who have brought their loan payments up to date. The reason for the request, according to a letter Warren sent Tuesday to Jack Remondi, Sallie Mae chief executive, was concern that the company may be hurting borrowers and taxpayers by pushing debtors into repayment plans that increase their burdens and put them at risk of default.

"I am concerned that Sallie Mae too often takes steps that hurt its student borrowers," Warren wrote.


In her letter, Warren told Remondi she worries his company regularly puts distressed borrowers with federal student loans in plans that temporarily delay required payments -- eventually leading to higher payments and increased loan balances -- rather than helping them enroll in federal programs that cap payments based on borrowers' incomes and offer the possibility their debts will be forgiven.

Read the full story here.