Sallie Mae Overview: Sallie Mae, the Student Loan Marketing Association, or SLMA, was established by Congress in 1972 on the models of Fannie Mae and Freddie Mac. Sallie Mae was created to increase the supply and lower the cost of student loans. During the period 1997-2004, Sallie Mae was completely privatized, ceasing to be a Government-Sponsored Enterprise (GSE) like Fannie Mae and Freddie Mac.
Upromise, which obtains funding for education through rebates on select product purchases, is a subsidiary of Sallie Mae. Upromise also manages Sallie Mae's educational savings (Section 529) account program.
Size: Sallie Mae reports these figures as of June 30, 2008:
- Loan Portfolio = $172 billion
- Loan Customers = 10 million
- Assets in Education Savings (Section 529) Accounts = $19 billion
- Education Savings Plan Customers = 1 million
- Upromise Members = 9 million
- Upromise Rewards = $450 million
- Employees = 12,000
- Member of the Fortune 300
Positives: Sallie Mae is the world's leading provider of student loans, has shown solid profitability, and its loan portfolio has been growing rapidly.
Sallie Mae has been cited as a top employer for working mothers and for female executives. Sallie Mae also offers generous employee benefits.
Negatives: A deep recession can lead to significant defaults on Sallie Mae's loan portfolio, jeopardizing profitability and thus threatening layoffs.
