It’s Time for the Department of Education to Dump Sallie Mae
By Beth Huang
For more than year, the Student Labor Action Project (SLAP) – alongside coalition partners, including the American Federation of Teachers, National Education Association, and U.S. 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.
Over the past year, the Department of Education has not been receptive of SLAP’s demand to terminate its contract with Sallie Mae. Last year, only after three hundred students demanded that Secretary Arne Duncan meet with them at the U.S. Student Association’s Legislative Conference in March 2013, SLAP students met with the 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.
Students have continued to pressure Secretary Duncan by sending letters to the Department and protesting at Sallie Mae shareholders’ meetings. This year, on a national day of action on the second anniversary of $1T Day, the day that student debt surpassed $1 trillion in 2012, delegations of students and workers were locked out of six Regional Offices of the Department of Education.
It’s clear: 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.
Students are now calling for an immediate end to this contract with new outrageous evidence from federal investigators. The Department of Justice described Sallie Mae’s conduct as “intentional” and “willful” – yet the Department of Education has taken no action. Students are continuing the fight for a debt-free future by urging Secretary Duncan to stop spending hundreds of millions of taxpayers’ dollars on a company that breaks the law.
Secretary Duncan’s colleagues from other federal agencies have found that Sallie Mae has cheated borrowers. Over 50,000 people have taken action to tell the Department that they’ve had enough! It’s time for students to keep up the pressure on Secretary Duncan to cut the Department’s contract with Sallie Mae. This summer, the fight continues as students and borrowers unite to make the Department of Education work for us!