Sallie Mae Lags In Student Debt Relief Amid Ongoing Federal Probes
Posted: 09/03/2013 11:06 am EDT | Updated: 09/03/2013 11:10 am EDT
Sallie Mae, the nation's largest servicer of federal student loans, is failing to enroll many of its distressed borrowers into one of the Obama administration's main initiatives for alleviating high student debt.
Documents obtained by The Huffington Post and estimates provided by the White House separately suggest that Sallie Mae, or SLM Corp., has enrolled relatively few borrowers into the Income-Based Repayment program. Sallie Mae dominates the now-discontinued Federal Family Education Loan Program, owning between 37 and 40 percent of the outstanding FFELP debt held by the private sector. But its share of FFELP borrowers who are enrolled in IBR is about half that, or 15 to 18 percent.
Officials have cautioned that the government figures cited by HuffPost are just rough estimates, but so far, they are the only available indicator of how Sallie Mae utilizes the loan relief program.
Outstanding federal student debt has nearly doubled since 2007 to $1 trillion, government data show, while the average borrower with federal student loans now carries more than $26,000 in debt -- a 42.7 percent increase since 2007. The IBR program has emerged as President Barack Obama’s signature tool to address this burgeoning crisis.
In May, Obama warned that this debt load “doesn’t just hold back our young graduates. It holds back our entire middle class.” He added that student loan
