Magazine article American Banker

Sallie Calls CBS Report on Its Industry Reckless'

Magazine article American Banker

Sallie Calls CBS Report on Its Industry Reckless'

Article excerpt

SLM Corp., the lender better known as Sallie Mae, published an open letter to CBS Evening News on Tuesday calling the program's recent coverage of the student lending industry reckless and inaccurate.

The Reston, Va., student loan giant also used the letter to discredit a rival, MRU Holdings Inc., which does business as My Rich Uncle.

In a report that aired Friday, CBS quoted Raza Khan, the president of MRU, as saying that his New York company was blackballed from universities' preferred-lender lists, and that he had witnessed other lenders' giving out expensive gifts at a convention of student financial aid administrators.

The fracas came a week after New York Attorney General Andrew Cuomo accused student lenders of striking deals with financial aid officers that may hurt borrowers. Mr. Cuomo is conducting a nationwide investigation into the practices involving 100 universities and various lenders, including Sallie.

The CBS report said that Sen. Edward M. Kennedy, D-Mass., was investigating whether Larry Burt, the financial aid director of the University of Texas at Austin, had asked Sallie to fly him and his wife to Paris in exchange for sending business its way.

In the letter, Tom Joyce, Sallie's vice president of corporate communications, wrote that his company was never asked to pay for any such trip, and that sullying the reputations of this gentleman and our company is reckless.

Sen. Kennedy's office confirmed that he had sent Sallie a letter Friday requesting information about travel by University of Texas officials since 2001. …

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