Sallie Mae, which is the United States’ largest lending agency for providing money for higher studies under student loans without cosigner, has been doing a lot of job cutting lately. According to some sources, this lending agency has cut about 2500 jobs after when the new student loan laws was made recently. Sallie Mae has its branches at Panama City, Texas and Killeen with over 1200 employees working over there. They have been informed that most of them would have to quit their job by the end of the year and there is no alternative to it. In addition to this, if things get worse there would be additional 1300 firings in the coming 2011.
The main reason behind this job fire is because of the Student Aid and Fiscal Responsibility Act that was passed in March this year. This act was a part of the bill of Barack Obama’s health care reconciliation bill. The SAFRA Act which is now applicable from 1st of June 2010 has ultimately ended the decade old Federal Family Education Loan Program and as a result of this private lending agencies like Sallie Mae would no longer be able to do any kind of federal loan business. From now onwards the federal aid or money would be directly available to the borrowers and lending agencies would not have any kind of role to play in this entire loan procedure.
Conwey Casillas who is a spokesperson at Sallie Mae says that the new student loans have certainly causing a lot of bad impact on them as well as to other financial lending agencies. He further says that move from FFELP to direct lending is certainly not good for the company as well as for the employees. But those people who are supporting the SAFRA act say that this new law is certainly going to help taxpayers because it can help them save billions of dollars. But the Department of Education rejects the claim as well as the views made by the aforesaid lending. But all in all, about 8,000 odd employees at Sallie Mae would have to look out for a new job by the end of 2010 and this would certainly increase the unemployment rate of United States which hovers at 10% at the present time.
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