NEW YORK, May 21 /PRNewswire/ -- Today, J.C. Flowers & Co. and its
investment partners in the acquisition of SLM Corporation, commonly known
as Sallie Mae, announced a series of initiatives for responsible student
lending, to be implemented upon completion of the pending transaction.
"As the nation's largest student lender, Sallie Mae will lead the
industry to ensure responsible student lending," said Chris Flowers,
Managing Director of J.C. Flowers. "Sallie Mae was founded to provide fair,
low-cost loans to help students afford college, and we plan to strengthen
and build on that successful mission."
Flowers noted that Sallie Mae has delivered student loans for 35 years,
and that Congress is currently debating the future direction of the
industry.
"College affordability is a national issue impacting the future
economic strength of our country," said Flowers. "We agreed to acquire
Sallie Mae because of its success in providing 10 million students at 6,000
schools nationwide an affordable pathway to college.
"As Congress considers proposals to reform student lending practices
and make college more affordable, students will be best served if
government, the lending community and higher education institutions work
together," Flowers continued. "We are ready to do our part, and look
forward to working with Congress to get the job done."
To enhance accountability and transparency in student lending, the
Flowers group announced a series of initiatives to be implemented upon
completion of the Sallie Mae acquisition.
-- Board of Directors. Sallie Mae will have an entirely new eight-person
Board of Directors, consisting of four representatives of J.C. Flowers
& Co. and two each from the Bank of America and J.P. Morgan Chase.
-- Special Committee. The new Board of Directors will appoint an
independent Special Committee to conduct a 180 day review of the best
business and marketing practices that should guide Sallie Mae's future
business conduct. The committee will report its findings to Sallie
Mae's new Board, issue a set of recommended business standards, and
oversee their implementation. The independent Committee will monitor
progress in adopting and meeting the new standards annually for three
years. The Committee will also report on implementation of the Student
Lending Code of Conduct as well as the already identified policies
outlined below.
-- Corporate Commitment to Continued Transparency. As a private company,
Sallie Mae will institute a series of voluntary transparency standards
and practices to ensure customer accountability, including annual
disclosure of the company's top five earners; an annual student town-
hall -- or "stakeholder" -- meeting on campus and on-line; continued
compliance with the Student Lending Code of Conduct; and continued
compliance with all applicable Sarbanes-Oxley requirements. Sallie Mae
will also continue ongoing reporting under federal securities laws and
fully comply with ongoing oversight by the FDIC and the US Department
of Education as well as other state and federal regulators.
-- Student Affordability First. Government-subsidized loans continue to
offer the best deal for students. Sallie Mae will enhance its efforts
to ensure that students understand all lower-cost options before taking
out private loans and require new disclosure and certification
procedures for students or parents who choose private loans over
cheaper options.
-- Increase the Sallie Mae Fund by 50 Percent Over Five Years. Good
corporate citizens know that it is not enough just to provide products
and services to their customers. The new Sallie Mae will build on the
work of the Sallie Mae Fund by pledging $150 million over five years to
the Fund for projects that demonstrate our commitment to our community
and to build on the Fund's nationally recognized efforts to increase
college access to low-income students.
-- Make College Affordable AND Successful. Today, almost half of all
students starting college won't finish, and many of these students are
left with school debt and lower earning potential. As the leading
student lender, Sallie Mae will enhance its commitment to help make
college not only affordable, but also successful. As part of a
significant new charitable commitment, the Sallie Mae Fund will provide
$30 million over the next five years to support major initiatives to
lower college drop out rates, provide assistance to at-risk student
populations, and ensure that all students not only have the opportunity
to start college, but also have the chance to graduate.
About J.C. Flowers
J.C. Flowers & Co. LLC, based in New York, is a private equity firm
focused solely on the financial service sector. Its latest fund has over $7
billion in commitments from investors.
About Sallie Mae
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.
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SOURCE J.C. Flowers & Co. LLC
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Related links:
http://www.salliemae.com
CONTACT:
Didi Blackwood, +1-202-530-4516, or Stephanie
Cutter, +1-202-528-0143, both for J.C. Flowers & Co. LLC
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