Sallie Mae is the largest company that makes student loans. They were founded as a Government Sponsored Entity (GSE) like Fannie Mae or Freddie Mac, but in 2004 they became the first ever of the GSEs to go totally private. Their stock has returned over 1900% since 1995, while they continue receiving billions of dollars in federal subsidies every year.
Their record of manipulating politics for profit, all at the expense of students and taxpayers, gaining "powers that would make a mobster envious" to retrieve their cash plus penalties and fees, I believe could be up there alongside Halliburton or any other Bush and Cheney-crony you could name. And now, just maybe, they're going down.
See, last week, Al Lord, former chairman and CEO who masterminded Sallie Mae's transition to a private company, decided to unload 1/3 of his stock in the company. . . just days before President Bush unveiled a proposed multibillion dollar cut in subsidies to the industry, sending the stock to a 2-year low. And today, the chairmen of the House Financial Services and Education committees (both Democrats, natch) are writing letters to the White House and to Sallie Mae demanding information on the sale.
In three years of covering this issue, I have come to believe that the only thing that's stopped Sallie Mae from gaining the reputation it deserves is the public's lack of understanding about the egregiously complex issue of student loan debt, and debt in general. But a dirty stock sale? That we can all get.
"A child's learning is the function more of the characteristics of his classmates than those of the teacher." James Coleman, 1972
Tuesday, February 13, 2007
Lord, Lord--See the Sallie Mae Corruption
CEO Al Lord has taken home $280,000,000 in salary over the past five years from Sallie Mae, but I guess that just wasn't enough. A few days before cuts in the student loan subsidies to Sallie Mae were announced, Al dumped a third of his stock. The story from Huffington: