Sally Mae: A Quasi-Public Agency

In the 70s, some banks wouldn't lend to students because interest rate was lower than borrowing costs. Many people who'd taken out guaranteed student loans under the Higher Education Act simply couldn't pay them back. A new president, Richard Nixon, walked into this economic situation. He created Sally Mae as a middleman administering student loans from banks that are guaranteed by the government and it ended up being very good for banks and private partners.