It’s Time for the Department of Education to Dump Sallie Mae

By Annika Neklason

This piece originally appeared at Youngist and is reposted here with permission.

For more than year, the Student Labor Action Project (SLAP)—alongside coalition partners, including the American Federation of Teachers, National Education Association and the US Student Association—has been calling for the Department of Education to cancel its $100 million annual contract with Sallie Mae. But the department has claimed that no “wholesale” violation occurred that would justify ending the contract.

Last year, only after three hundred students demanded that Secretary Arne Duncan meet with them at the US Student Association’s Legislative Conference in March 2013, SLAP students were given a meeting with senior officials at the Department of Education. In this meeting, Secretary Arne Duncan stated that the Department wouldn’t do business with corporations that broke the law.

But, it’s clear that Sallie Mae broke the law. On May 13, 2014, Sallie Mae reached settlements with the Department of Justice and Federal Deposit Insurance Corporation to pay $97 million in fines and restitution to student loan borrowers for violating multiple federal laws. With these settlements, federal agencies are fining Sallie Mae for overcharging active-duty service members on interest rates, deceiving borrowers when processing payments, and engaging in discriminatory practices.

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