Glossary Word Definition: Student Loan Marketing Association (Sallie Mae)
Student Loan Marketing Association (Sallie Mae)
Is a stockholder owned corporation established by the Higher Education Act of 1965 (as amended). Sallie Mae has broad statutory authority to provide liquidity for banks, savings and loan associations, educational institutions, state agencies and other lenders engaged in the federal Guaranteed Student Loan Program (GSLP) comprising the Stafford (formerly GSL) loan programs, the supplemental PLUS and SLS loan programs, and the Health Education Assistance Loan (HEAL) program, and to otherwise support the credit needs of students.
Sallie Mae offers lenders loan purchases, warehousing advances and forward commitments for both instruments, as well as automated student loan management systems and services. In addition to making its other products and services available to state student loan agencies, Sallie Mae offers to issue letters of credit to back their student loan revenue bond issues.
Sallie Mae also provides financing to post-secondary educational institutions for academic plant and equipement and offers loan consolidation for student borrowers. In addition, Sallie Mae is authorized to offer participation's or pooled interests in loans and to assist in financing student loans where there is a shortage of capital, either as a direct lender, if requested by the Secretary of Education, or as a source of funds to eligible guarantee agencies or direct lenders.
Sallie Mae finances its activities primarily from the sale of its debt securities in the domestic and international capital markets.
In May 1981, Sallie Mae began to finance its operations in part through the public issuance of non-guaranteed discount notes. These notes are unsecured debt obligations, mature within one year and are available in 100m increments.
