Sallie Mae Issues Statement on California Attorney General Inquiry

RESTON, VA – Sallie Mae issued the following response to yesterday’s Financial Times story:

Sallie Mae is not being investigated by the California Attorney General’s office. The company has been responding to questions and information requests from the California Attorney General’s office concerning career training schools that it does business with in the state. The questions relate to company policies on school closures and loan disbursements.

Sallie Mae has provided more than $350 million in loans to students enrolled in career training schools in California, of which approximately $200 million remains outstanding, including $4 million to students at eight career training schools that have closed. Sallie Mae had no marketing or other incentive arrangements with these closed schools. The company has adequately reserved for potential losses in its career training portfolio including losses resulting from closed schools.

Just as it has worked with other states, Sallie Mae will cooperate with California officials to ensure that students have appropriate educational and financial options as a consequence of these closed-school situations.

SLM Corporation (NYSE: SLM), commonly known as Sallie Mae, is the nation’s leading provider of education funding, managing more than $98 billion in student loans for more than 7 million borrowers. The company primarily provides federally guaranteed student loans originated under the Federal Family Education Loan Program (FFELP), and offers comprehensive information and resources to guide students, parents and guidance professionals through the financial aid process. Sallie Mae was established in 1973 as a government-sponsored enterprise (GSE) called the Student Loan Marketing Association, and began the privatization process in 1997. Since then, the parent company name has changed, most recently to SLM Corporation. Through its specialized subsidiaries and divisions, Sallie Mae also provides an array of consumer credit loans, including those for lifelong learning and K-12 education, and business and technical products and services for colleges and universities. More information is available at www.salliemae.com. SLM Corporation and its subsidiaries, other than the Student Loan Marketing Association, are not sponsored by or agencies of the United States.