DEFINITION of 'Sallie Mae - Student Loan Marketing Association'
Sallie Mae is a publicly traded company that is the largest provider of education loans in the United States, as of 2016. Along with providing student loans, Sallie Mae purchases student loans from original lenders and provides financing to state-based student-loan agencies.
Sallie Mae was originally formed in 1972 as a government enterprise, but as of 2004, is a completely independent publicly traded company. Sallie Mae is traded on the New York Stock Exchange with the ticker symbol SLM.
BREAKING DOWN 'Sallie Mae - Student Loan Marketing Association'
Sallie Mae is formally known as SLM Corporation, which stands for the Student Loan Marketing Association. The structure and operations of Sallie Mae have drastically changed since its founding. It began as a government entity providing federal education loans to students, and originating federally guaranteed student loans under the Federal Family Education Loan Program (FFELP). It acted as both a servicer and collector of federal student loans on behalf of the Department of Education. In time, Sallie Mae went private, beginning the privatization process in 1994 and becoming fully privatized in 2004.
The company's current primary operations include originating, servicing and collecting completely private education loans. Sallie Mae also offers tools and services to prepare students for college, including Upromise Rewards and other planning tools and resources. In 2014, Sallie Mae's loan servicing operation and the majority of its loan portfolio spun off into a separate publicly traded business, known as Navient Corporation.
One of the world's largest private education loan providers in the United States, the company employs nearly 2,000 individuals across the country and manages more than $10 billion in assets as of 2016.
Sallie Mae plans to debut its newest offering, its own parent loan, in 2016. This newest loan option is similar to options offered by other major private loan companies in the United States. Under this parent loan, a student's parents will be able to borrow money for college tuition, potentially at a discount from other private loan providers. The interest rate for these loans will range from 3.75% up to 13% and will depend on student and parental qualifications and other factors. Parents will have up to 10 years to pay off the entirety of these loans. Sallie Mae's newest loans offer parents the ability to take out a line of credit at reasonable interest rates and avoid the steep 4.3% upfront fee charged on the line of credit offered through the Federal government's Plus program.