Sally Mae and the Student Loan Swindle Message Board

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Non-Tech : Sally Mae and the Student Loan Swindle

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From: Grandk	12/23/2006 12:33:18 AM
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Taylor's staff got a little carried away preparing its "Top 10 reasons to hate Sallie Mae" list. The agency's 60-page defense identifies Sallie Mae Chief Executive Officer Albert L. Lord as the sixth-highest paid CEO in the world, a litany of layoffs following previous Sallie Mae acquisitions and Sallie Mae's habit of outsourcing jobs overseas. All by way of saying the $1 billion gift horse is a mule. A look at the books reveals why PHEAA and others are concerned that Sallie Mae, already criticized for monopolizing the business, would be calling even more shots with PHEAA in its fold. Sallie Mae posted profits of $1.3 billion for the first nine months of 2004, $1.5 billion in 2003 and $792 million in 2002. PHEAA's profits are puny by comparison. The agency earned $68.3 million on revenue of $342.4 million in the fiscal year ended June 30, vs. earnings of $32.5 million and revenue of $269.3 million in the prior fiscal year. Lord was paid $8.6 million last year -- enough to rank him as the sixth-highest paid CEO in the Pittsburgh region, based on the PG's analysis -- while PHEAA President and CEO Richard E. Willey receives a $260,078 salary. Throw in incentive pay for which he's eligible and Willey still makes less than $400,000 a year, says PHEAA spokesman Keith New. Much of Sallie Mae's growth has come through acquisitions, such as the $770 million purchase of USA Group, an Indianapolis firm that at the time was the nation's largest student loan guarantee agency. The 2000 purchase gave Sallie Mae the ability to control the entire student loan process, from making the loan, guaranteeing it and collecting payments. post-gazette.com

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