Organized Labor Hostile To Sallie Mae'sPennsylvania Entreaty
HARRISBURG, Pa. - (01/19/05) -- One of the biggest labor unions inthis union-heavy state called on Gov. Ed Rendell Tuesday to rejectthe continued efforts by Sallie Mae to take over the state-runstudent loan agency known as Pennsylvania Higher EducationAssistance Agency. In a letter to the Governor, the Association ofFederal, State, County and Municipal Employees, better known asAFSCME, said the state-run loan agency has turned itself over thepast decade from a money loser to a profitable, self-funded agencythat benefits Pennsylvania families and workers. In contrast, theAFSCME, which represents more than 1,000 of PHEAA's 2,800 workers,cited Sallie Mae's practice of outsourcing local jobs to low-paidworkers in India. "the reality is this private company is in thebusiness of making money. It will get its $1 billion, and muchmore, back through higher interest rates and fees charged(Pennsylvania) student borrowers," the union charged. Sallie Maeexecutives are meeting with state lawmakers this week to push thecompany's $1 billion takeover offer for the Pennsylvania agency,even though the agency's board of directors has flatly rejected thebuyout proposal. The agency has $45 billion in student loan assetsand serves more than 170 Pennsylvania credit unions.