Sallie Mae, the nation’s largest private student loan lender, is splitting into two different publicly traded companies. One will handle federal government backed student loans, and the other will handle private student loans.
The reason behind the split is that Sallie Mae expects its federally backed loan business to decline, and its privately funded student loan business to boom. As Sallie Mae states in its most recent annual report, “If the cost of education continues to increase at a pace that exceeds income and savings growth and the availability of federal funds does not significantly increase, we expect more students and families to borrow privately.”
Coincidentally, this is precisely the same set of factors that prevents many students from repaying these loans; their income and savings are not increasing to keep up with other rising expenses. If you are a student that cannot repay your private student loans despite finding employment, consider debt settlement performed by a qualified debt settlement attorney. Debt settlement done by a qualified law firm can result in a significant reduction in the principal balance owed on a private student loan.