Under pressure, Sallie Mae agrees to meet with students
College students and the 25 million borrowers holding loans sold or serviced by Sallie Mae scored a major victory at the lending giant's annual shareholders meeting on May 30. Sallie Mae executives agreed to meet within the next month with student representatives, who want to talk about Sallie Mae's lending practices and its involvement in politics.
The agreement to meet comes more than a year after Sallie Mae shunned a similar request from leaders of the United States Student Association and instead had 36 students arrested in Washington, D.C.
This year, more than 100 students from all over the United States converged near the Newark, Del., headquarters of the behemoth holder of $162.5 billion of student debt. Joined by faculty, labor and community group representatives, they marched, chanted, shared their debt stories and encamped in 90-plus degree heat, facing down a line of granite-faced state troopers and police dogs.
Between chants, student after student took the bullhorn and declared their debt levels, ranging from $10,000 to $145,000. "Shame, shame!" shouted the crowd after each one. "Our generation is too big to fail," said Kirin Kanakkanatt, who has put a hold on her studies at Ohio University for financial reasons and now heads the National Student Power Convergence. "Sallie Mae, hear us roar," called out another student.
Tim Haresign, president of the Council of New Jersey State College Locals and a biology professor at Richard Stockton College of New Jersey, promised students that faculty in his state will stand with them. "Power to the students," he said.
As the noisy demonstration proceeded outside, 20 designated people entered the meeting to speak to the board. They asked shareholders to approve a resolution requesting that the Sallie Mae board disclose information annually about its direct, indirect and grass-roots lobbying activities and spending. They also spoke to another resolution on executive compensation, linking it to borrowers' ability to repay their loans.
Among the 20 were AFT president Randi Weingarten and Adrienne Eaton, president of the Rutgers Council of AAUP-AFT Chapters, as well as students from the University of Wisconsin-Madison, Rutgers, City College of New York, Florida State and the University of Central Florida.
"Disclosure of Sallie Mae's lobbying expenditures is critical for shareholders to better assess the company's management of its lobbying and trade association activities, as well as related risks and opportunities," Weingarten said. "As Sallie Mae profits from billions of dollars of student loans, it has an obligation to students, educators and shareholders to be transparent about its lobbying efforts, including on student loan reform."
AFT members' pension plans have more than $1 trillion in assets and are long-term shareholders of Sallie Mae. College and university students and their families, many of whom have loans through or serviced by Sallie Mae, as well as AFT members, who include higher education faculty and staff, have a keen interest in the lobbying activities of Sallie Mae.
Sallie Mae spent $6.8 million in 2010 and 2011 on direct federal lobbying activities. However, despite having at least 63 lobbyists in nine states, Sallie Mae does not disclose its lobbying expenses used to influence state legislation, its trade group memberships or payments, or its associations with tax-exempt organizations that write and endorse model legislation.
Sallie Mae "pours money into the political sewer," said James Browning, a regional director with Common Cause who also attended the meeting and talked to the rallying students afterward. "They belong to organizations like ALEC [the American Legislative Exchange Council]. If you miss a payment, you will hear from Sallie Mae. They expect you to comply every month with its rules. But they don't want to play by the rules of political spending."
"People should know what the largest owner of private student debt is up to. We as borrowers have a right to know how they're spending that money politically. They're giving money to politicians who vote against student interests, and we think that's a conflict of interest," said Rutgers University senior and USSA member John Connelly, speaking to the online news service NJ Spotlight.
Earlier in May, USSA students were successful in getting U.S. Education Secretary Arne Duncan to meet with them to talk about student debt and the department's relationship with Sallie Mae. (See related story.)
Among the students who spoke to shareholders was 19-year-old Regina Joseph (shown speaking, above right), a rising sophomore at Florida State University who is vice president of her chapter of the Dream Defenders, a Florida social justice group. Despite a state Bright Futures grant that covers 65 percent of her tuition, this summer she has taken out a $16,000 loan for next year to cover her expenses. A political science and history major, she is the daughter of Haitian immigrants who came to Florida before starting their family "because they wanted the American dream" for her and her siblings.
Joseph was active in the last national elections, she says, hoping "votes will make a difference. But it seems like officials are not listening. All we want is to be heard." That's why she and two vans filled with Dream Defenders and activists from the allied Florida Student Labor Action Project drove all night from Florida to Delaware. "We are the future of this country. It's terrible that they can profit from our debt enslavement."
An hour and a half after the Sallie Mae meeting began, the student advocates emerged triumphant. "We made it as hot inside as it is out here!" said Weingarten. Indicating that, at last, the students had been heard, she announced that Sallie Mae's newly appointed CEO Jack Remondi had agreed to schedule a meeting to take place within the next 30 days. [Barbara McKenna, Chris Goff, AFT press release/Michael Campbell photos]
May 31, 2013