When people say “student loans,” many immediately think “Sallie Mae.” Indeed, the growth of Sallie Mae over the past two decades into the behemoth that it has become closely parallels the explosion of crippling student loan debt in this country.

Sallie Mae was created by the federal government in the 1970’s to use U.S. Treasury money to buy government-backed student loans from banks. For the past 30 years, the company has grown enormously and has maintained a close connection to the federal government. Now, Sallie Mae not only handles government-backed loans, but also is a major contractor servicing the U.S. Dept. of Education Direct federal loan program, and it is one of the largest (if not *the* largest) private student loan lenders in the world. Both Sallie Mae and the federal government have reaped enormous profits from their mutually beneficial ongoing relationship.

The National Consumer Law Center (NCLC) recently came out with a new report exploring the history of Sallie Mae and analyzing the dangers of granting for-profit entities such enormous control over student loan borrowers. The report recommends, among other things, significantly more rigorous oversight by state and federal government, and holding companies like Sallie Mae accountable for poor customer services and violations of federal regulations. I can’t say I disagree.

To read the report, click here.