RESTON, Va., March 20 /PRNewswire/ -- Sallie Mae sent the following letter to CBS Evening News last night in response to its recent broadcast and Web site articles on student lenders: (Logo: http://www.newscom.com/cgi-bin/prnh/20030617/SLMLOGO-a ) Wendy Krantz Producer CBS Evening News 524 W 57th St New York, NY 10019-2924 Dear Ms. Krantz: Your March 16 broadcast and Web site articles on student lenders included a number of inaccuracies and critical factual omissions. Your Web article reported an allegation attributed to Senator Kennedy's office that Sallie Mae was asked to pay for travel to Paris by Dr. Larry Burt, financial aid director from the University of Texas-Austin, and his wife. This is patently false. Sallie Mae was never asked to pay for any such trip, nor did we, nor was anyone from Sallie Mae on such a trip. Dr. Burt is a respected financial aid professional. Sullying the reputations of this gentleman and our company is reckless. Those involved owe Dr. Burt and Sallie Mae an apology. Dr. Burt has served in the past on our company's advisory committees of financial aid professionals. These committees, which include Sallie Mae customers and non-customers, provide vital feedback to us on how best to improve the products and services we provide students, families and schools. Dr. Burt was not paid for his consulting; Sallie Mae only reimbursed him for his travel expenses, as we did for all school representatives who served on our advisory committee. The University of Texas-Austin has 19 lenders on its preferred lender list, and processed loans from 154 different lenders last year. This clearly encourages competition among lenders, which improves services and reduces borrower cost. The university's lender list (available at http://finaid.utexas.edu/sources/loans/lenderlists/underFFELPlist060.html) is a model of disclosure, and states clearly that students are free to choose any lender they wish, and that neither the school nor its employees receive benefits from referring students to any lender. The University also makes clear that lenders were selected for meeting a minimum set of service requirements and for their competitive repayment discounts. Sallie Mae's market share at the University of Texas-Austin has varied between 5 and 7 percent for the past five years, and is currently at 6 percent. By comparison, our overall market share in the state of Texas is 11 percent. CBS' stories implied that students are disadvantaged by lender lists such as those at the University of Texas and elsewhere. The opposite is true. Congress sets the rates on guaranteed student loans -- currently a fixed 6.8 percent for undergraduates. Competition among lenders drives that cost down further. This academic year alone, private-sector lenders will provide more than $1 billion in origination fee and interest rate reductions. In fact, students who attend an institution that features private-sector lenders will save, on average, more than $2,000 than those who attend schools that use the government's Direct Lending program. Those students have only one choice, and it is inferior. CBS also highlighted one company -- MyRichUncle -- as a victim and an expert. Unfortunately, CBS failed to report the background on this company. -- MRU began its life six years ago as a protein bar company named Dr. Protein. It later changed its business to a CD manufacturing company, before morphing into a student lender. -- MRU has spent millions of dollars of its shareholders' money on expensive ads attacking the integrity of financial aid directors and lenders. -- MRU's chief executive officer, Edward McGuinn, is also the CEO of eLottery, an Internet gambling company that filed for bankruptcy in 2001. Mr. McGuinn is listed as the highest-paid executive at MRU in its most recent SEC proxy filings. -- eLottery, under Mr. McGuinn's leadership, paid disgraced lobbyist Jack Abramoff's firm more than $700,000 to lobby against an Internet gambling ban. According to newspaper articles, eLottery also paid $25,000 at Abramoff's direction to a nonprofit entity where he was a board member which went to cover expenses for Congressman Delay to go on a golfing trip in Scotland. These actions became the subject of Congressional investigations and major media stories. -- MRU was recently criticized throughout the financial aid community for an advertising campaign on the Princeton Review's Web site that falsely touted MRU as the preferred lender for hundreds of schools. With this as backdrop, no one should be surprised by MRU's tactics. Indeed, MRU's loans are more expensive for the vast majority of borrowers. As stated previously, the vast majority of lenders pay the federal origination fee for all of their Stafford student loan borrowers. MRU does not offer any up-front discount of origination fees. Instead, MRU offers discounts that less than 10 percent of students will ever earn. In marketing terms, this is known as "bait and switch." Financial aid administrators are too sophisticated to succumb to this marketing gimmickry. If MRU had the best products, they would have won the hearts of financial aid administrators. Clearly this open and competitive marketplace has rejected MRU's offerings. No wonder that financial aid associations at the national, regional and local levels have written MRU to express disgust with their tactics. Financial aid directors, acting on the best interests of their students, have rejected this company. What is surprising is that CBS would tarnish the reputation of the financial aid community and present MRU as an industry expert without performing research. We would hope that CBS would do more thorough reporting on such an important subject. Your viewers -- and students -- deserve better. We await your response. Tom Joyce VP, Corporate Communications CC: Senator Edward Kennedy Tim Fitzpatrick, CEO, Sallie Mae Leslie Moonves, President & CEO, CBS Corporation Rick Kaplan, Executive Producer, CBS Evening News SLM Corporation (NYSE: SLM), commonly known as Sallie Mae, is the nation's leading provider of saving- and paying-for-college programs. The company manages $142 billion in education loans and serves nearly 10 million student and parent customers. Through its Upromise affiliates, the company also manages $15 billion in 529 college-savings plans, and assists 7.5 million members with automatic savings through rebates on everyday purchases. Sallie Mae and its subsidiaries offer debt management services as well as business and technical products to a range of business clients, including higher education institutions, student loan guarantors and state and federal agencies. More information is available at http://www.salliemae.com. SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America.
SOURCE Sallie Mae