May 31, 2013

Victory for Students at Today’s Sallie Mae Shareholder Meeting

New CEO Jack Remondi Commits to Meet with Students in the Next Month

CONTACT:
Ori Korin, 202-822-2127 x126
okorin@americanrightsatwork.org

Newark, DE – Earlier today, nearly 200 students, parents, community members and union leaders from around the country came together at Sallie Mae’s annual shareholder meeting to demand a meeting with corporate executives and introduce a resolution to hold the bank accountable to its 25 million student borrowers. Twenty representatives from the group went inside the meeting to introduce a shareholder resolution asking for increased transparency and disclosure from the company about its lobbying practices and membership in extremist groups like the American Legislative Exchange Council (ALEC).

The proposal received support from 35.5% percent of shareholders, which is unprecedented for this type of resolution. After the resolution was introduced, newly named CEO Jack Remondi agreed to the students’ demand to meet in the next month. Students and leaders are eager to use the CEO transition to demand better business practices from the bank, and question Remondi directly, asking for clarity around its executive pay structure.

Sara Fitouri, a law student at the University of Denver who holds $145,000 of student debt, told the crowd at the rally, “Sallie Mae is in the business of condemning students to a lifetime of debt, not making education a reality. We came to this meeting because we want to meet with Sallie Mae to come up with fair solutions to this crisis. They have routinely hid behind closed doors, called police, ignored us, or locked us out of buildings instead of allowing us a seat at the table,” Fitouri said. “Even the Secretary of Education has encouraged Sallie Mae to meet with us. .”

A group of students and activists presented the resolution at the meeting, representing the United States Student Association (USSA), the Student Labor Action Project (SLAP), Common Cause and the Responsible Endowment Coalition. They were joined by Jobs with Justice & American Rights at Work Executive Director Sarita Gupta and American Federation of Teachers (AFT) President Randi Weingarten.

In her introduction of the resolution Weingarten explained, “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.”  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.”

“As student debt and student loan defaults escalate at an unsustainable pace, private student loan lenders continue to increase their profit margins,” added Sarita Gupta. “Sallie Mae is the largest private student loan lender and one of the chief profiteers off of student debt, yet it faces minimal public scrutiny and accountability. When just five individuals can make over $20 million dollars off of the backs of students, something needs to change.”

The group was initially met with a heavy police presence with K-9 units, but they remained within a designated area on the road leading up to the Sallie Mae headquarters. Outside, students from dozens of colleges and universities, including George Washington University, Rutgers, University of Massachusetts, University of Wisconsin, University of Central Florida and City University of New York all spoke about the skyrocketing interest rates on their student debt, and called on Sallie Mae to address solutions to the student debt crisis.

“Student debt is actively standing in the way of the economic recovery, and Sallie Mae is partially to blame,” Gupta went on to say after the meeting. “Recent graduates are having trouble buying homes and cars because of their debt-to-income ratio. Today was a good first step toward changing that.”

Today’s meeting comes on the heels of the release of new research by Dēmos that compares the financial security of a household that graduates from a for-profit school with no student debt to one that graduates with average amounts of debt. The model estimates that, over a lifetime of employment and saving, a two-income household that borrows $66,100 to obtain degrees from for-profit schools with accrue $323,000 less in assets over their lifetime than a similar household that had not been forced to borrow to pay for their for-profit college education.

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Resources:

To view a live stream of the event, please click here.

To follow the live tweets from throughout the day (which include photos), please check the #StopSallieMae hash tag on Twitter.

To read the meeting agenda and shareholder resolution, please click here.