Sallie Mae Chair sells 18 million in stock before congressional ruling

Recently Ted Kennedy has began a call for reform in the student loan industry and is pushing for schools to steer students to direct loans which unfortunately for Sallie Mae don’t go towards paying their 3 million dollar CEO salary. Ted Kennedy’s plan is summed up below.

The Massachusetts Democrat — an old liberal lion brought back to committee leadership power in November’s elections — wants to reward colleges for steering more students to direct government loans instead of the government-guaranteed loans that furnish handsome profits for Sallie Mae and the banks.

This no-goodnick is trying to hurt Sallie Mae a company which would never put itself or money or Universities before students. How dare he do this, in fact it seems that he has drawn the attention of Salle Mae CEO Thomas Fitzpatrick.

“Unfortunately, Sen. Kennedy has attempted to smear the integrity of Sallie Mae, the student loan industry, and the financial aid professionals. I’m certainly personally disappointed in his baseless and insulting attacks,” said the Sallie Mae CEO, according to a teleconference transcript.

It will be interesting to see how this all plays out. hopefully it will favor the students and the millions of college graduates who are currently working as indentured servants for Sallie Mae.

In other news, I should have my own open letter to Thomas Fitzpatrick up next week. Please feel free to share your opinions on this story, Sallie Mae, and student loans in the comments.

AOL News Ted Kennedy Vs. Sallie Mae

The suit alleges that Arrow engaged in such practices as trying to collect debts that have been discharged in bankruptcy, using profanity, and withdrawing money without authorization from bank accounts.

Arrow Financial Services recently received a $125,000 fine in Minnesota for the same practices. It is not clear from the article whether or not Arrow was collecting on Student loans or if it was simply aggressively trying to collect on other forms of consumer debt. Arrow Financial services describes itself as:

Arrow Financial Services LLC is part of the Sallie Mae (NYSE: SLM) family of companies and a nationally recognized leader in the receivables management industry with over $16 billion in consumer debt under management. We offer a full range of recovery solutions across a variety of asset classes including credit cards, student loans, utility, telecommunication, retail and automotive. Our team specializes in balancing courteous and professional customer service with the goal of maximizing recovery on managed accounts. Arrow’s unique combination of experience, reputation and world class analytical capability sets us apart from others in our industry.

It is important to remember your rights when a debt collector comes calling. The consumerist has a good collection of your rights.

Fair Debt Collection Practices Act

Dealing with Debt Collectors – Consumerist

Chicago Sun Times – Sallie Mae company charged with aggressive collection practices

Arrow Financial Services – AKA In UR bank account takin’ UR Money

The article contains information on the amount of interest that Sallie Mae and other lenders are guaranteed by the government.

Currently the government guarantees lenders a 7.72-percent rate of return. If the bill becomes law, that rate will drop to 7.62, which will be a relatively modest blow to the lending industry’s already excessive profits. But that hasn’t stopped them from crying bloody murder.

I wish the article contained the information to support these numbers and explained the rates better, however the way I am interpreting this is that even if you lock in a 5% interest rate with Sallie Mae the government will kick in another 2.72% in interest. Why the government is paying a subsidy to a company that manages 142 Billion dollars in loans and turned a profit of 342 Million in the 4th quarter of 2006 (A profit which is 96% lower than last 4th quarter) is beyond me.

Sallie Mae had the following comment on the interest rate reduction

Tom Joyce, a spokesman for Sallie Mae, the student loan organization, said such cuts could impact the services and benefits students receive. (Student Loan Info for Parents)

I realize I may be all across the board here but It is ludicrous for companies such as Sallie Mae to receive government subsidies while making copious amounts of money and providing poor customer service and high interest rates to its consumers.

What are your thoughts on the interest rate reduction, student loan companies and government subsidies for profit bearing companies?

The Daily Texan: Student Loan Interest Rate Bill Info

The reports also highlight Sallie Mae’s Student Loan holdings.  Sallie Mae is currently managing 142 billion dollars in student loans.

Despite the derivatives loss Sallie Mae was able to still turn a profit in the millions of dollars.

For more information on Sallie Mae’s reports check out

Bloomberg: Sallie Mae Fourth Quarter Results

What I hope this will accomplish

• Sallie Mae will accept a Loan Verification Form and Pass along a Final Payoff amount to AES, allowing my loans to be consolidated.
• Reimburse me for the interest payed on these loans above the rate which these federal loans would have been locked in at.
• Lower my monthly payments and better our finances.

What I Hope to Provide

• Tips on taking out educational loans.
• My Experiences with loan companies.
• Loan Education.
• Links to relevant news and educational information