Sallie Mae Won't Take No For An Answer In Penn.
Meantime, student loan giant Sallie Mae, also a government-sponsored enterprise until just two weeks ago, said it will not accept the Pennsylvania Higher Education Assistance Agency's rejection of its takeover bid and is taking the $1-billion offer directly to state lawmakers who control the agency.
Albert Lord, president and CEO of Sallie Mae, was scheduled to meet last week with state legislative leaders and other lawmakers to discuss the details of the proposed buyout, which the board of the state-run student lender rejected last month. Lord was scheduled to meet with Senate Republican leaders and was seeking a meeting with Senate Democratic leaders and House leaders in both parties, as well.
One of the biggest labor unions in this union-heavy state weighed in against the bid, which could jeopardize union jobs at PHEAA. In a letter to Gov. Ed Rendell last week, the Association of Federal, State, County and Municipal Employees (better known as AFSCME), said the state-run loan agency has turned itself over the past decade from a money-loser to a profitable, self-funded agency that benefits Pennsylvania families and workers. In contrast, the AFSCME, which represents more than 1,000 of PHEAA's 2,800 workers, cited Sallie Mae's practice of outsourcing local jobs to low-paid workers in India.
"The reality is this private company is in the business of making money. It will get its $1 billion, and much more, back through higher interest rates and fees charged (Pennsylvania) student borrowers," the union charged.
Sallie Mae is the biggest student loan agency in the country with more than $107 billion in loans under management. The Pennsylvania agency has $45 billion in student loan assets and serves more than 170 Pennsylvania credit unions.