Ed. Dept. letter details alleged problems at Sallie Mae
- According to a Dec. 9 letter from the U.S. Department of Education to Sen. Elizabeth Warren, student loan giant Sallie Mae has harmed borrowers and billed the government agency incorrectly, among other issues, over the past decade.
- Despite these servicing failures, the Education Department is not levying fines against Sallie Mae, and the letter provides insight into the department's less than stellar response to such behavior by companies handling federal student loans.
- Federal student loan debt tops $1.2 trillion and some policymakers fear that poor servicing has contributed to a debt risk that could harm economic growth.
In this latest controversy, Education Secretary Arne Duncan is finding himself fighting off allegations of the Education Department tolerating wrongdoing on the part of its student loan servicing companies. Sallie Mae is the nation's largest student debt handler and is currently under investigation by no less than three federal agencies for alleged borrower rights violations. Sen. Warren has warned that the department shouldn't serve as a "lapdog" to these companies, while a department spokesman says the letter "speaks for itself."
- The Huffington Post Education Department Finds Numerous Problems At Sallie Mae, Levies No Fines
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