Sallie Mae 2013 Annual Report Download - page 6

Our Approach to Assisting Students and Families in Repaying their Education Loans
In total, we provide service to approximately 13 million FFELP Loan, Direct Loan and Private Education
Loan customers including cosigners, and post-default counseling to an additional 500,000 customers. This
includes processing more than 70 million payments and making and responding to approximately 500 million
calls annually. Employee emphasis is placed on providing service with accuracy, courtesy, consistency and
empathy. If we fall short, we make it a priority to correct our mistake, and we make it a priority to prevent it from
happening again.
We understand managing repayment of education loans is critical for students to achieve their educational
goals, recognize their full earning potential, and develop a strong credit profile. A key indicator of future success
in loan repayment is graduation. We encourage customers to plan for the full cost of their education to increase
their likelihood of completing their course of study because we know that those who drop out or do not complete
their course of study are more likely to default on their education loans.
When it comes to repaying education loans, customer success means making steady progress toward
repayment, instead of falling behind on payments. Our experience has taught us that the transition from school to
full repayment requires making and carrying out a financial plan. For many, this is their first borrowing
experience. For new graduates, salaries grow over time, typically making payments easier to handle as their
career progresses. It is also not uncommon for some to return to school, experience illness or encounter
temporary interruptions in earnings.
To help customers manage these realities, we have made customer success and default prevention top
priorities. Contact and counseling keep customers on track, and we go beyond what is required in our efforts to
assist customers with past-due student loan payments. That outreach pays off: approximately 90 percent of
federal loan customers we reach successfully leverage the options available to them to resolve their delinquency.
As a result of our outreach, the federal education loans we service default at rates 30 percent better than the
national average.
Most customers tell us they want to repay their loans as quickly as they can, thus minimizing their
borrowing costs. Customers who request additional payment flexibility are most frequently in the early years of
repayment. Having multiple repayment options from which to choose helps customers find a plan that is right for
their individual situation. No one option serves all, and we use a variety of tools – such as videos, online
resources, letters, text messaging, email, and live chat – to facilitate customer access to repayment information
that allows them to make an informed choice that’s right for their financial circumstance and goals.
One of the hallmarks of our responsible borrowing philosophy is to encourage payments, even small ones,
instead of no payment. When done while the student is in school and even when not required, even nominal
payments may help minimize the accumulation of total indebtedness. We also recognize that, during periods of
repayment, customers may struggle to meet their financial obligations. We work with each individual to
understand their financial situations and identify alternative payment arrangements. And when we do, our
counseling includes straight talk about debt, including the impact of delaying repayment on total borrowing
costs.
Business Segments
Currently, we have three primary operating business segments — Consumer Lending, Business Services and
FFELP Loans. A fourth segment — Other, primarily consists of the financial results of our holding company,
including activities related to the repurchase of debt, the corporate liquidity portfolio and all overhead, as well as
the results from certain, smaller wind-down and discontinued operations.
A summary of financial information for each of our business segments for each of the last three fiscal years
is included in “Note 15 — Segment Reporting” to the consolidated financial statements.
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