Federal investigators have uncovered evidence that Sallie Mae cheated active-duty soldiers on federal student loans, according to people familiar with the matter.
The findings, if eventually made public as part of a lawsuit or settlement agreement, may threaten Sallie Mae’s lucrative contract with the U.S. Department of Education to collect payments on federal student loans. The department’s contract requires loan servicers comply with all federal laws when handling federal student loans.
The allegation also may further embarrass the Education Department, already under fire for lax oversight of student loan companies that are paid by taxpayers, yet are alleged to have repeatedly violated federal rules. The department told Sallie Mae in October that it planned to renew its contract to service federal student loans.