Your story "Student Loans Caught in Dispute" (U.S. News, Sept. 17) overstates an issue between Sallie Mae and the Education Department. You correctly report that we protested the department's sole sourcing of a loan-servicing contract, a contract we would like at least the opportunity to bid. That protest is the first step in a process we will work through with the appropriate parties at the department and other federal agencies. We haven't even begun those discussions, yet your newspaper alleges a disagreement so consequential as to threaten loan delivery. In fact, this issue will have no impact on student-loan originations.
Entering this academic year students and families faced a crisis over the availability of alternative student loans. Congress and the Education Department acted promptly, passing and implementing the Ensuring Continued Access to Student Loans Act. Students are now ensured access to federal loans this year and likely through at least 2010. Indeed, in May, Sallie Mae committed to make federal loans to every student at every school as a direct result of the new law. That commitment is ongoing and is unrelated to this servicing contract dispute.
We intend to aggressively pursue the servicing contract at issue. We have earned the servicing business of our 10 million American student borrowers. We have committed to students, parents and schools to make and service loans for those students. We have met that commitment for 35 years and intend to continue to meet it.
We have been down this road before. In 2001, we asked the department to competitively bid the government's direct student-loan servicing contract. It bid that contract after a similar and successful protest. We lost that competition, but by the department's own reckoning at the time, the competitive process saved the taxpayers $1 billion.
Al Lord
Chief Executive Officer
Sallie Mae
Reston, Va.
