Sallie Mae Failing to Enroll Borrowers in Helpful Income-Based Repayment Program

Sallie Mae, the nation's largest federal student loan provider, has not been enrolling very many of its borrowers in a key program meant to aid those paying back their debt, the Huffington Post reported.

President Barack Obama has made lowering the cost of college and fighting student debt one of his main initiatives since taking office. However, Sallie Mae has been enrolling few borrowers in the White House's Income-Based Repayment (IBR) program, a benchmark of the President's plan.

Sallie Mae owns about 37 to 40 percent of the now-discontinued Federal Family Education Loan Program (FFELP) debt held by the private sector. Only about 15 to 18 percent of FFELP borrowers are signed up for the IBR program.

"It is concerning that Sallie Mae has such a disproportionately low number of borrowers utilizing the Income-Based Repayment program," said Persis Yu, a staff attorney at the National Consumer Law Center. "Unfortunately, we do not have a lot of data about Sallie Mae or other servicers' performance."

Government authorities cautioned that the figures obtained by the Huffington Post are rough estimates, but they are however, the only estimates publically available. The IBR program is a signature of Obama's campaign to lower the skyrocketing levels of student debt.

Since 2007, federal student debt has doubled to $1 trillion, with the average borrower accumulating $26,000 each - good for an increase of 42 percent.

A Sallie Mae spokeswoman criticized the figures, saying they were erroneous, but the company declined to provide a report that they would deem accurate.

Student advocates claim many eligible borrowers are not properly informed of the IBR program. Sallie Mae has long benefitted from government contracts with the U.S. Education Department (ED), but those could be in jeopardy pending investigation.

The Huffington Post previously reported the Federal Deposit Insurance Corp. (FDIC) was planning to enforce accusations of potential "unfair and deceptive" and "discriminatory lending" violations.

Because of the allegations against it, ED has been encouraged to cut down on its reliance on its biggest contractor. Just since 2009, Sallie Mae has been awarded more than $300 million in contracts. While the current one is set to expire, a renewal is expected.