Thursday, May 24, 2007

Sallie Mae Plays the Race Card

According to Fortune's Bethany McLean Sallie Mae "has been reaching out to members of the Congressional Black Caucus, implying that a decrease in its subsidies will mean that the company will be forced to cut back on loans to students who attend historically black colleges and universities."

I'll just keep quoting. Bethany McLean kicks ass.
"Needless to say, the "Talking Points" memo doesn't say anything about the fact that Sallie is so profitable that it's being taken private in a $25 billion buyout, a buyout that will add to executives' already considerable fortunes. Nor does it mention that Sallie's aggressive debt collection arm targets many of those same students. And while Sallie argues that FFEL loans are cheaper for students than the government's direct loans, the company doesn't point out that's the case because Sallie and other lenders can afford to kick a sliver of taxpayer's money back to students, in the form of a reduced origination fee for instance."


Anonymous said...

When direct lending was moving through the legislative process in 1993, the guaranteed lending community surprisingly succeeded with these arguments. They said that direct lending was too complicated for hbcus and hsis to manage. Almost all of these schools ended up staying with guaranteed lending. The lending community hired figures familiar to the hbcu schools to travel around and talk down direct lending.

Anonymous said...

Yeah, this 'argument' is old news, described in detail in Steven Waldman's 1995 book, "The Bill."