NEW YORK, Feb 20 (Reuters) - SLM Corp, better known as Sallie Mae, faces a multistate probe led by Illinois into its student loan practices, a spokeswoman for Illinois Attorney General Lisa Madigan said on Thursday.
The investigation is part of an increasingly broad review of student lending by state and federal regulators.
In a filing with the U.S. Securities and Exchange Commission on Wednesday, Sallie Mae said it was facing “significant year-over-year increases” in the number of investigative demands and in the breadth of information being sought.
The rise in requests has been largely driven by state attorneys general and by the federal Consumer Financial Protection Bureau, the company said.
Madigan’s spokeswoman, Natalie Bauer, said Illinois and other states have opened an “active investigation” into Sallie Mae’s loan servicing and debt collection practices, among other issues. She would not identify the other states involved in the inquiry.
A company spokeswoman did not immediately respond to a request for comment outside regular U.S. business hours on Thursday evening.
Sallie Mae, the largest U.S. student loan provider, had set aside $70 million as of the end of 2013 to help resolve enforcement actions brought by the Department of Justice and the Federal Deposit Insurance Corp, according to regulatory filings.
The company is in the process of splitting into two companies, with one unit focused on student loans and the other handling its consumer banking business.