Dictionary of Banking Terms: student loan marketing association
student loan marketing association
publicly traded corporation established in 1972 to increase the availability of student loans by purchasing loans in the secondary market. The corporation also known as Sallie Mae, guarantees college education loans under the federal Guaranteed Student Loan Program, and under the Health Education Assistance Program. Sallie Mae purchases a 90% interest in loans guaranteed by the corporation, and finances its secondary market activities by issuing medium-term notes and floating rate notes. Sallie Mae obligations are exempt from state and local taxes, and are backed by the full faith and credit of the U.S. government. Sallie Mae's parent company, USA Education, (formerly SLM Holding Corp.) was to be fully privatized in 2006.
