Business

Sallie Mae

March 13, 2010

Job loss possible with vote

Student aid bill could be lumped with health care legislation in order to begin voting next week.

By Jerry Lynott jlynott@timesleader.com
Business Writer
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The possibility of federal lawmakers combining and voting as early as next week on disparate reform measures for health care and student aid has student lender Sallie Mae on edge.

The vote could cost jobs at the company’s loan servicing center in Hanover Township that employs approximately 1,100 people.

The U.S. House of Representatives last September passed the Student Aid and Fiscal Responsibility Act, touting its savings of an estimated $79 billion over the next decade by shifting lending of federal loans directly to the government from private lenders. Sallie Mae’s role in the lending process would be restricted, the company said.

The student aid bill could be lumped with the contentious health care overhaul and come up for a reconciliation vote in which Democratic senators would need a simple majority for passage of the reform supported by President Barack Obama.

The joining of student loan reform with health care’s reform and the urgency to put them before legislators is unnecessary and overlooks alternatives, said Martha Holler, spokeswoman for Reston, Va.-based Sallie Mae.

“Congress is trying to use a hyper-partisan process to pass sweeping student loan reform that needlessly eliminates valuable student services and the employees who provide them even though there are viable alternatives that could garner bipartisan support and meet student reform goals without sacrificing jobs,” Holler said in an e-mail Friday.

Sallie Mae has offered a plan it said will save as much as the government’s estimates and allows the publicly traded company to remain in the student lending business.

It has sought the support of senators Bob Casey and Arlen Specter, and U.S. Rep. Paul Kanjorski.

Kanjorski split his votes on the reforms. He supported the House’s version of health care reform but voted against the student aid overhaul.

His spokeswoman, Abigail McDonough, said in an e-mail, “The status of health care reform legislation is still changing, so the congressman doesn’t know yet what he will be voting on.”

Casey and Specter are aware of the impact of the student aid legislation on Sallie Mae, but their spokespeople gave no indication on how they would vote.

“Senator Casey continues to be very concerned about the employees in Wilkes-Barre and he has made his feelings known to the White House and to Senate leadership,” his spokesman Larry Smar said in an e-mail.

Kate Kelly, Specter’s spokeswoman, said in an e-mail that he has been monitoring the legislation and throughout his career has been an advocate for making college loans more accessible and affordable for working families.

“Sen. Specter is certainly concerned about the legislation’s potential effect on the private student loan sector, including the people in Pennsylvania who work for student loan companies,” said Kelly.

Jerry Lynott, a Times Leader staff writer, can be contacted at 570 829-7237.

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