Sallie Mae Has Spent Millions Fighting President's Student-Loan Plan

July 30, 2009

Sallie Mae, the nation's largest student-loan company, spent $2-million on lobbying in the first half of this year in an effort to persuade lawmakers to consider alternatives to President Obama's plan to end bank-based lending to students and replace it with direct lending, according to an analysis by The Huffington Post.

The lender, which is pushing a counterproposal that would allow student-loan companies to originate loans before selling them to the government, has hired several Washington-based lobbying firms, including a group led by Tony Podesta, a top Democratic fund raiser with longstanding ties to members of Congress. But its key hire was Jamie Gorelick, a deputy attorney general in the Clinton administration and partner in the law firm of Wilmer, Cutler, Pickering, Hale and Dorr. The firm billed Sallie Mae $270,000 for its work in the first half of 2009, according to the analysis.

Sallie Mae spent $3.4-million lobbying last year, according to the Center for Responsive Politics. It also showered campaign contributions on individual members of Congress, including $26,150 for Rep. Paul Kanjorski of Pennsylvania, chairman of the House Financial Services Commitee and a key Democratic ally, and $10,000 on moderate "Blue Dog" Democrats. Among Democrats, the Blue Dogs have been the most vocal in their opposition to the president's plan, warning of job losses that could result from a switch to 100-percent direct lending.