June 26, 2008

Contract Raises New Concern Over Sallie Mae's Ties to Guarantor

By Paul Basken

Sallie Mae, the nation's largest student-loan company, has a contractual arrangement with USA Funds, the nation's largest guarantee agency, that gives the lender extensive financial and operational control over the guarantor that oversees its work, according to a copy of the contract obtained by The Chronicle.

The contract, a copy of which has also been posted on the Internet in recent days, shows a relationship that a former high-ranking Education Department official

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