Group Calls for More Oversight of Sallie Mae and Other Loan Servicers
"State and federal regulators should step up their oversight of Sallie Mae and other student-loan servicers, and better coordinate their enforcement efforts, according to a new report by the National Consumer Law Center," The Chronicle of Higher Education reports. "The report, 'The Sallie Mae Saga: A Government-Created, Student-Debt-Fueled Profit Machine,' offers a case study of Sallie Mae, charting the company's rise from government-sponsored entity to student-loan behemoth, with a role in lending, servicing, and debt collection. It details recent scrutiny of the company, which is being investigated by a trio of federal agencies, and describes the difficulties some of its subprime borrowers are facing repaying their debt. The consumer law center is a nonprofit advocacy organization that seeks to protect the financial interests of disadvantaged people. The author of its report, Deanne Loonin, a lawyer with the center, argues that the growing number of investigations and complaints against Sallie Mae show that government supervision of lenders and servicers has been 'lax at best,' and point to the need for 'significant changes in the treatment of student-loan borrowers.' Ms. Loonin calls on the Department of Education to work with the federal Consumer Financial Protection Bureau and state attorneys general 'to ensure that servicers are doing their jobs properly,' and urges the department to change the way it evaluates servicers and debt collectors."
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