Penn. CU Assn. Urges Rejection Of Takeover Plan
The Pennsylvania CU Association urged Gov. Ed Rendell last week to reject a hostile takeover of the state-owned student loan agency by Sallie Mae, saying the state's college students and their families would be better served by allowing the not-for-profit loan agency to remain out of the student loan giant's hands.
"For more than 40 years (Pennsylvania Higher Education Assistance Agency) has provided low-cost loans and grants to Pennsylvanians including those with modest means," wrote PCUA Chairman Ron Lasich to the governor. "Like credit unions, PHEAA is a nonprofit that puts people ahead of profits." He suggested Sallie Mae would not be offering $1 billion to take over PHEAA's business if it did not expect the move to add to the company's profits. PHEAA has the largest market share of student loans in Pennsylvania and provides services to more than 170 credit unions. Sallie Mae made the offer to the PHEAA board in December but the board summarily rejected the bid, prompting the company to lobby directly to state lawmakers who control the state-agency. State lawmakers held hearings on the offer last month. The legislature could override the board's rejection of the offer, which would need to be approved by Gov. Rendell.