What is Sallie Mae?
Sallie Mae is a financial services company for college students and their families. Originally founded as the Student Loan Marketing Association, Sallie Mae began as a federally chartered, government-sponsored enterprise (GSE) that marketed and serviced federal student loans. It now also offers private student loans, consumer banking services, and insurance products, in conjunction with a loan-management business it launched in 2014 called Navient.
When Sallie Mae was founded, in 1972, the U.S. Treasury gave it funds to buy student loans from banks, which Sallie Mae serviced for the remainder of the loan terms or repackaged to sell to other banks for profit.
In the 1990s, Sallie Mae incorporated as a private company. Sallie Mae serviced loans through the Federal Family Education Loan Program (FFELP) until the federal government severed its relationship with Sallie Mae and started acting as a direct lender once again through the Direct Loan Program.
In 2004, Sallie Mae completed its incorporation as a private company. Through Sallie Mae Bank, the company offers private education loans, banking services, college savings programs, and insurance. Sallie Mae is the largest originator of student loans in the country.
Sallie Mae Bank Inc. is a member of the Federal Deposit Insurance Corp., and its savings accounts include such products as money market accounts as well as 529 college savings plans and certificates of deposit. In 2014, it created Navient, a separate, publicly traded company that operates as a traditional federal student loan servicer for Sallie Mae’s loans, including arranging and receiving payments. Navient also manages loans previously serviced by Sallie Mae.
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Sallie Mae example
To many people, the name Sallie Mae is synonymous with student loans, and it continues to offer several loan products for both students and parents. Sallie Mae’s loan products include the following:
- Smart Option Student Loan for Undergraduate Students and Smart Option Student Loan for Graduate Students to help college and university students pay for tuition, fees, and living expenses as they study for bachelor’s, master’s, and doctorate degrees.
- Career Training Smart Option Student Loan for students who need to pay for professional training and certification through trade schools.
- Bar Study Loan for law students who want to cover their living expenses while they prepare for their bar exams.
- Dental Residency and Relocation Loan and Medical Residency and Relocation Loan for dental or medical school graduates who need financial assistance to complete their residency programs.
- Parent Loan for parents who want to borrow money to pay for their children’s post-secondary education instead of asking their children to apply for their own loans.
- K-12 Family Education Loan for parents who need to cover expenses like tuition for their children’s private elementary, middle school, or high school education.