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Who Sallie Mae Is — and Isn’t

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We’re in the business of providing responsible financial tools – and financial literacy  

The Sallie Mae® of today might surprise you. We’re no longer a government student loan servicer — in fact, we’re a completely different business and have been for nearly a decade. Today, we’re a bank offering financing, such as private student loans, and free college planning resources to students and their families.

Sallie Mae is not a federal loan servicer.

The name Sallie Mae has been around since the ‘70s, but the company who uses the name today is actually pretty new.

When Sallie Mae first formed, it was a government-sponsored enterprise servicing federal student loans — or loans made by the government. But in 2014, it split into two separate companies. The Sallie Mae of today took the name and became a consumer banking business. The other company became Navient — a name you may recognize today if you have a federal student loan — which works in the federal loan servicing business. Importantly, the two companies are independent and not associated with one another.

Of the $1.57 trillion outstanding student loan debt in 2020, $1.54 trillion – or 92% – is made and held by the federal government. The remaining 8% of student loan debt is held by numerous private lenders, including Sallie Mae.

Sallie Mae is in the business of fair and responsible lending.

Sallie Mae’s approach to loans is shaped by our responsible lending philosophy — that students and families should not be overburdened with loans that they won’t be able to repay. We believe that college should be affordable, equitable, and accessible for all students, and we’re committed to making that a reality. That’s why we believe private loans should be used to fill the gap between resources available to students and the remaining cost of college, and not as a first resort. Simply put, students shouldn’t pay more for college than necessary.

In fact, taking out a private loan is the last step of our three-step approach used to guide students and their families through all of their options. The first step is to find money you won’t have to pay back, or ‘free money’, such as scholarships and grants. The second step is to explore federal student loans by filling out the Free Application for Federal Student Aid (FAFSA®) and gaining access to the $150 billion in federal aid available through the government.

And our fair lending approach works. In 2020 alone, Sallie Mae provided support to more than 420,000 students and families seeking financing for college and graduate studies. In addition, 97% of loans in repayment are being managed successfully, and less than 2% of loans default annually.

Sallie Mae is committed to helping students succeed.

Providing loans is just one part of how Sallie Mae achieves its mission of powering confidence for students. We know how critical financial literacy is to future success, which is why we provide free financial planning tools for anyone to use, whether they’re a Sallie Mae customer or not. 

We guide students and their families by emphasizing financial literacy from day one – before they even take out a loan. Our array of tools and resources to help students plan and pay for college are available for free on our website.   

Examples of our tools include:

  • A free scholarship search tool that matches students with scholarships based on their skills, activities and interests. Last year, it matched 24,000 students with a total of $67 million to cover college costs. We have a version for graduate students, too, home to more than 950,000 scholarships worth up to $1 billion.
  • We provide a variety of financial literacy calculators to help customers understand how to best save and pay, including a college cost calculator, college planning calculator, and student loan payment amount estimator.
  • We launched a free tool that makes applying for the FAFSA even easier, so students can access scholarships, grants, and federal aid, before considering a private student loan.
  • Our Sallie Mae Fund Bridging the Dream Scholarship Program provides millions of dollars to support low-income and minority students to help improve college access and completion rates in the nation.

If students do decide to take out private student loans with us, we want to make sure they’re informed. We provide clear communications regarding their choices, including the option for undergrad and grad students to make payments while in school. Nearly half of Sallie Mae customers go this route, which helps save on the total cost of their student loans. We also provide consistent communication regarding their loan balances, including an annual statement detailing what they owe.

We know that financing higher education is complex and confusing, but Sallie Mae is here to make sense of it all. That means ensuring students and families feel confident and informed about how to plan and pay for higher education, and if they need to borrow, we’ll provide responsible options that power them throughout their unique journey.

FAFSA is a registered service mark of U.S. Department of Education, Federal Student Aid