CFPB Gives Sallie Mae a Failing Grade
The $4.2 billion Pennsylvania Employee Credit Union is getting out of the student loan business, but Harrisburg, Penn.-based credit union’s decision isn’t related to recent criticism directed at loan servicer Sallie Mae.
“We’ve referred several hundred of our members to Sallie Mae for loan servicing over the past year,” said President/CEO Greg Smith. “I haven’t heard any complaints from the borrowers, and believe me they would have let us know.”
Currently, 92% of the 40-year-old firm’s private education loan customers make on-time payments and defaults have fallen to just 2.7%, the lowest levels since prior to the recession, Christel said. During the past academic year, Sallie Mae assisted 2.1 million past-due customers to return their education loan accounts to good standing, preventing $41 billion in federal and private education loan defaults.
CFPB’s hardline analysis comes on the heels of several federal probes of the student loan corporation, including a investigation by Sen. Sherrod Brown (D-Ohio) over Sallie Mae’s failure to assist troubled borrowers, and Sen. Elizabeth Warren (D-Mass.) over failure by both the Department of Education and the Department of Treasury to investigate incidences of alleged wrongdoing by the loan servicer.