Sallie Mae(R) | Pennsylvania

Fact vs. fiction

Sallie Mae believed that its proposed partnership with PHEAA was better for students, schools, and taxpayers. Here are the facts about our proposal in contrast to the misinformation advanced by others:

What PHEAA says	Sallie Mae facts
Sallie Mae has acquired non-profits and other companies. They have fired employees and transferred American jobs offshore to India. They would do the same here.	We had committed to keep employment levels at or above present levels. Sallie Mae has added 6,500 jobs to its U.S. work force since 2000 and 580 non-employee subcontractors in India. Sallie Mae has retained or terminated employees on the basis of merit. Sallie Mae has 700 employees at its Wilkes-Barre service center, for a total of roughly 800 employees statewide.
Most of PHEAA's employees enjoy the protections and benefits of union membership, unlike Sallie Mae.	Sallie Mae is recognized as one of the best places to work by national organizations and major media outlets. Sallie Mae employees feel no need for protection. We believed PHEAA employees who joined Sallie Mae would not have felt the need for protection with Sallie Mae as their employer. Our employees enjoy excellent pay packages, stock options and comprehensive benefits.
Meanwhile, SLM's CEO and top management make millions.	Our CEO's salary is in the bottom quartile of peer companies and is routinely exaggerated in the press. Our CEO's cash compensation—$750,000 salary, plus bonus—has averaged $2 million over the last five years. In that time, Sallie Mae has grown by 6,500 employees, added 3 million customers, made $70 billion of loans, paid more than $2 billion in federal taxes, and created $2.3 billion in charitable foundations. Sallie Mae executives' compensation is purely performance based and is paid by its investors. Media reports indicate that PHEAA's Dick Willey and top executives are the highest-paid executives in the Pennsylvania state government. The salaries, which are paid by the taxpayers of Pennsylvania, top $430,000 for Willey and $300,000 for PHEAA's seven executive vice presidents.
Through its Keystone Lenders, PHEAA offers low-cost loans to Pennsylvania students.	Sallie Mae offers the lowest-cost Stafford loans to students in Pennsylvania.
We pass our earnings on to Pennsylvania students and families (not shareholders). This means low-cost student loans and many free programs and services—such as those for loan forgiveness, scholarships, early awareness, and financial literacy.	PHEAA provides less than $20 million per year not already available through the private sector and other competitors—under 2% of our $1 billion offer. PHEAA has retained $400 million of earnings that it has not passed on to students, families, or anyone else and which today lies fallow at PHEAA. Our $1 billion offer could have annually doubled institutional grants and simultaneously added 40% to student grants for the first five years of the proposed contract.
PHEAA used $85 million of its earnings during 2003 to provide direct benefits to the Commonwealth—all without taxpayer support.	Comparable benefits are available to students across the United States without using a taxpayer-funded monopoly. The Sallie Mae proposal not only would have provided benefits equal to what PHEAA offers today, but also would have created $1 billion in additional cash funds. PHEAA's entire existence is taxpayer supported—its earnings and capital belong to Pennsylvania taxpayers!
Sallie Mae is an out-of-state, $100 billion, Fortune 500 company with little investment or stake in Pennsylvania's future.	Sallie Mae is not "out-of-state." It does, however, operate in other states, as does PHEAA. We have a large investment in Pennsylvania. We would like to invest even more and grow employment. Sallie Mae has 700 employees at its Wilkes-Barre service center, for a total of roughly 800 employees statewide. Our Chairman and CEO, both lived, worked and attended schools in Pennsylvania. Five of our 15-person board of directors are or were Pennsylvanians. BusinessWeek identified us as one of the top 15 cash givers in its recent issue on Top Corporate Philanthropists. We are proud of our size and our success. In fact, we are now the top-performing financial entity in America.
California attorney general's office has launched a consumer-fraud investigation into Sallie Mae, focusing on its private loans to students at for-profit career training schools.	No formal investigation was launched by the California AG's office concerning Sallie Mae's private loan programs. Sallie Mae provided information materials to the California AG's office related solely to the SLM Financial Career Training Loan program. The questions focused on California career training schools that SLM Financial does and did business with that have closed, licensing and other general program questions. We have responded and provided all information requested to date to the California AG's office and the discussions have been amicable.
Sallie Mae and defunct Solid Computer Decisions bilk students in Virginia, Pennsylvania, Florida, and South Carolina. "Ripoff Report" (March 19, 2003)	The class-action lawsuits filed against Sallie Mae regarding Solid Computer Decisions were dismissed. Sallie Mae worked cooperatively to find solutions for all students affected by the school closure. Sallie Mae has a formal, closed-school policy and any students affected by the Solid Computer Decisions closure who contacted Sallie Mae to advise that they were affected were handled in accordance with Sallie Mae's closed-school policy.