Start with this jaw-dropping introduction by Huffpo:
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.
Then I say, screw them. No wonder Senator Elizabeth Warren has been calling for investigations into the student loan industry.
The U. S. Department of Education surely has options. Luckily there's a small window of opportunity here before the current contract with Sallie Mae is up 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.
In its latest annual report, released in February, Sallie Mae told investors that in the 2013 fiscal year, the Education Department was projected to originate more than $121 billion in new loans and dole out more than $1 billion in servicing and other fees -- a large slice of which Sallie Mae hoped to capture.
Why isn't the DofE out there soliciting bidders? Something's not right here -- and the implication from this perceived closed bidding is that there's some shenanigans going on here. If we're willing to offer bail outs and support a 'too big to fail' philosophy, why don't we support 'small enough to fail but small enough to care?' Why not a consortium of smaller financial institutions and investors who want to make big money?
Student loan default rates have become alarmingly high. But much of that could be attributed to the onerous overseeing of Sallie Mae and their untoward business practices. If Sallie Mae cheats, why reward them?
Even better put is Senator Warren's comments:
The agency has yet to respond to a Sept. 19 letter from Sen. Elizabeth Warren (D-Mass.) criticizing it for its apparent inability to hold Sallie Mae accountable, despite what Warren described as a “pattern of breaking the rules and ignoring its contractual obligations.”
If Sallie Mae’s past actions have not warranted an end to its federal contracts, Warren asked Education Secretary Arne Duncan, under what circumstances would the department terminate a contract with a law-breaking company?
What we need is to listen more to Senator Warren and less to Sallie Mae -- and it's mouthpiece, Arne Duncan. C'mon Mr. Secretary, grow a pair -- a big pair -- and stand up for the students of America, not a corrupt, lawbreaking organization.