State Agency Ramps Up To Fend Off SallieMae Bid
HARRISBURG, Pa. - (01/31/05) -- The Pennsylvania Higher EducationAssistance Association launched a media blitz last week to helpfend off a hostile takeover offer from student loan giant SallieMae. The release of a 53-page booklet to media outlets and aletter-writing and email campaign came as Sallie Mae executiveswere lobbying state legislators to override the PHEAA's rejectionof the company's $1 billion offer. Teachers and administrators fromall over the Keystone State joined the fight to defeat the rarehostile takeover of a publicly-run student loan agency. PHEAA,which is controlled by the legislature, has a 21% share of thestudent loan market in Pennsylvania and Sallie Mae has a 7% share,but Sallie Mae has come to dominate the national market and howmakes more than half of all the guaranteed student loans in thecountry. Sallie Mae, with its $108 million in student loans undermanagement and diversified operation from orginations tosecuritizations and collections, claims it can provide loans toPennsylvania's college students cheaper and more efficiently thanthe state-run agency. The PHEAA Board has countered by sayingPennsylvania students will pay higher loan costs under thefor-profit structure of Sallie Mae.