Bank of America and JPMorgan Chase buying Sallie Mae for $25B
No good can come of this. Bank of America, JPMorgan Chase, and a couple of private investment funds are buying giant student loan company Sallie Mae for $25B. If you have (or, like me and my wife, had) student loans, very likely Sallie Mae had something to do with them. Sallie Mae has benefited since its creation from the implicit backing of the US government. It’s not a non-profit, though, far from it. Sallie Mae (and Fannie Mae, a close cousin) has made buckets of money issuing student loans effectively guaranteed by the federal government at a tidy profit for many years.
It now appears BoA and JPMorgan Chase will be taking that money from you when you write those student loan repayment checks. If there’s one thing that is certain when big banks get involved, it is that it is bad for consumers. I don’t want this to become a rant, but as anyone who’s had their credit card issuer taken over by one of these particular banks can tell you, this is not good for the consumer. My guess is you can say goodbye to that 0.25% decrease in your rate by paying automatically through EFT. Customer service should also fall and errors rise. That’s just my guess.
