Sallie Mae Defends Itself
The Nov. 14th issue of The Chronicle of Higher Education includes a Letter to the Editor from Tom Joyce, a senior vice president at Sallie Mae. In the letter, Joyce accuses the Chronicle of biased reporting for its October 23rd article about the Zahara lawsuit:
To prevent defaults, Sallie Mae always prioritizes the best interest of our customers. It is never in the financial interest of our customers or our company to allow loans to slip into default. In fact, we invest millions of dollars every year in staff and technology to prevent defaults.
In the rush to print baseless accusations of a former short-term, entry-level employee who was fired for misconduct in 2005, The Chronicle failed to note what all lenders and guaranty agencies clearly understand about the federal student-loan program: Forbearance is far less costly to the borrower than the cost of default.
Zahara has accused Sallie Mae of pushing forebearances on borrowers in an attempt to increase debt levels.