Sallie Mae To Bring 2,000 Jobs Back to U.S.

Against the backdrop of 6 finalists currently vying for the opportunity to service billions of dollars of loans sold to the Department of Education, Sallie Mae announced today that they would be moving 2,000 jobs back to the United States that had been previously outsourced through overseas operations. 

Here is the press release from Sallie Mae, which indicates that these jobs will be "call center, information technology, and operations support positions in various communities across the country" and that they will be added over the next 18 months. 

Here is the CNBC interview of Al Lord, CEO and Vice-Chairman of Sallie Mae and Rep. Paul Kanjorski, whose district includes Wilkes Barre which will see 600 of these jobs:

Here are excerpts from that interview with Mr. Lord:

• "Bringing back 2,000 jobs to the U.S.; all the jobs that we have overseas." 
  

• Why is Sallie Mae doing this? 
  
  • "It is the right thing to do.  Communities in which we operate in the US are struggling with unemployment rates.  The fact is that we are able to bring these jobs back so we are."

Call me a cynic, but might this announcement also be related to the Direct Lending servicing contract which is currently up for grabs?  Consumer Warning Network is reporting the following:

"It is unlikely that companies with offshore operations could win the work, given the “challenging” personnel and system security requirements, said Chris Greene, a spokesman for the U.S. Department of Education in response to questions from the Consumer Warning Network."

“Ultimately, any offshore contract performance would require the approval of the Secretary or his authorized agent,” Greene said.

Bid documents for the contract require federal background checks on “all personnel” working on the project and extensive computer system security.

In addition, go to any website that catalogs consumer complaints about Sallie Mae and you will find issues with their outsourced customer service operations (who knows, maybe Al Lord was convinced by Patrick's argument below): 

Rachel of Edison NJ (03/31/09)
"...When you call them now the phone line constantly hangs up and is transferred to a office in India in which S. Peters could not help me at all and transferred me to another line that hangs up."

Patrick of Culver City CA (01/25/08)
After several days of being tossed around on the phone and passed to several different (and wrong) departments and having to give my private information every time I spoke to someone new, I blew up! I waited 3 days for a supervisor to call me back and she didn't! I had finally had it. I called their toll-free number and when the computer asked for my information, I didn't give it. It recognized my phone number and sent me to customer service. The lady in India asked for my personal information again. I refused. I told her that either she pass me directly to the correct department or her supervisor. She said, she needed my information in order to process the request. I said, then give me to your supervisor. She said, Can I speak? I said, No. So then, Jason comes on and I told Jason of my problem, he asked for my information. I asked, Where do you live Jason? He said, India. I said, You need to connect me with someone in the United States Jason, I will be contacting the CEO regarding my problem. He did. I talked to a US representative who was able to handle the request in less than 20 minutes. Problem solved. Take a lesson from this. You have the right to deal with someone in the states, since this is where your loan was processed!

Or maybe Sallie Mae is just heeding the advice that Kelly received from a Sallie Mae representative "to ask for someone in the USA:"

"My son is joining the Navy and wants his student loans paid off, so Sallie Mae (India) tells us to fax the paper work and they will process in two days after calling every day for a week, we are told that they need the originals and not a faxed form. After overnighting the originals to them they still did not process them, finally after calling everyday for two weeks and screaming at them they transfer us to someone in the USA, and we were told that next time something like that happens to ask "for someone in the United States" and then they will have to transfer you."

So, rather than attribute patriotic motives to this decision, I would view it as a recognition that their outsourcing strategy had failed and that Sallie Mae believes that U.S.-based employees will be more effective at collecting on defaulted student loans, which should keep them busy for the next several years.  The politics and timing of this announcement are pretty remarkable too; to be able to add 600 jobs in the congressional district of Rep. Kanjorski, who chairs the Subcommittee on Capital Markets.  In addition, decisions regarding the future of FFEL and a large loan servicing contract with the Department of Education hang in the balance.  Might this announcement have merely been a repackaging of their November 2008 announcement to add 1,100 credit and collections jobs in Delaware by 2011?  Add this to the 600 jobs in Wilkes-Barre that Mr. Lord announced with Rep. Kanjorski at his side today and you get to 1,700 jobs, pretty close to the 2,000 jobs.  

Of course, what wasn't mentioned in the press release was the fact that these 2,000 jobs won't make up for the 2008 layoffs at Sallie Mae, which according to their 10-K, involved "lowering our headcount by a total of 2,900 or 26 percent, and consolidating operations through closing several work locations."  Stay tuned to see whether this announcement helps Sallie Mae's case. 

Related articles:

• Higher Ed Watch blog (May 22, 2008) 

Comments

[Debbie]

Well we are almost 12 months into their 12-18 month timeline on bringing jobs back to the U.S.

I just called Sallie Mae today & was disconnected from the first customer service girl. The 2nd girl transferred me to a young guy. All 3 of these customer service people had foreign accents. When I asked the guy where he was located he told me the Philippines.

Sallie Mae's customer service is outrageous & the fact that these jobs are still overseas is criminal considering our current unemployment level in this country.

I called in reference to my nieces school loan because I'm trustee of the trust of a deceased co-signer. I have to say that if I had a school loan with Sallie Mae & had to deal with this incompetence on a regular basis, I'd seriously consider walking away from my school loan just to avoid the hassle of dealing with them.

Also, when I called them the last time the girl asked my what my mother (co-signer of loan) died of. How on earth is that information even relavent??

I also sent them a check for over $18,000 back in September & never received a zero balance statement, which was the reason for the call today.

Now our government wants to take over health care. Soon we'll be contacting people in India about our medical claims.

If our government can't manage the post office, school loans, mortgages or a whore house in Vegas then how on earth can they manage health care?

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