Press release from Business Wire
Statement of Sallie Mae President & CEO at Shareholder Meeting
Friday, May 31, 2013
Statement of Sallie Mae President & CEO at Shareholder Meeting09:18 EDT Friday, May 31, 2013
NEWARK, Del. (Business Wire) -- Sallie Mae President and CEO John (Jack) F. Remondi addressed shareholders at the corporation's 2013 annual meeting. Excerpts of his remarks, made yesterday, are as follows:
This month, Sallie Mae celebrated its 40th anniversary. In our 40 years, Sallie Mae has helped more than 31 million students achieve their education dreams with products that help families, save, plan and pay for college. I am proud of this remarkable history and am honored to be given the opportunity to lead this great organization and its 7,000 employees.
I would like to thank the board and shareholders for this opportunity and their confidence. I also want to thank Al Lord for his 31 years of service as a tremendous leader and visionary, and the architect of what Sallie Mae is today. He leaves behind a phenomenal track record of success. Thank you, Al.
Sallie Mae's history of success is in large part based on its ability to adapt to changing market conditions. Over the last four decades, we have changed our structure and our business model to better capture and deliver value to our customers, employees and investors. Each iteration has delivered on these objectives.
Now, from a position of financial strength and with a portfolio of growing businesses, we announced the next chapter for Sallie Mae. Actually, two chapters. Since the end of FFELP, we increasingly find ourselves a company with two divergent businesses: an education loan management, services and collections business and a consumer banking business.
Each business has strong financial fundamentals and a dynamic business model. Yet each has distinct capital requirements, business strategies and regulatory environments. We believe the separation will:
- Create the best platform for each business to grow
- Allow each entity to focus its business on best serving their different customers
- Create more opportunities for our team of dedicated employees
- Best prepare both companies for increasingly different regulatory environments, and
- Create more value for our investors
This is an exciting time for Sallie Mae, and I am ready to lead this talented team as, together, we execute this strategic plan and continue the company's record of success.
This is the time of year when millions of students walk across the stage and receive their diplomas. We know that there would be no Sallie Mae record of success if our customers were not also successful.
For 40 years, Sallie Mae has stayed true to our mission of helping students invest in themselves through a college education. We provide the tools and products that help students and families achieve education dreams. Our products have evolved and expanded over the years. Our delivery and service systems have changed. Our customers' needs and preferences are different. Our mission, however, has remained constant. Plainly said, we are invested in our customers' success.
Paying for college was a daunting proposition 40 years ago, and it remains one today. We recognize the difficult economic environment that our customers are entering after graduation and the financial implications of their student loan debt. Managing student loan debt repayment is critical for students to realize the full value of their degree, develop a strong credit profile and build the foundation for a solid financial future. Sallie Mae provides loan products and education tools that assist families with this process and the sometimes difficult transition from school to work and to repayment.
Still, the most valuable lesson learned over our history is that successful loan repayment begins before loan origination. We know from our research, “How America Pays for College,” that only four in 10 families have a plan to pay for the full cost of college. Today, without a good plan, students may run out of funding before they graduate or leave school with more debt than they can afford. In either case, the results are the same.
Too much debt is devastating for the borrower and a loss for the lender or taxpayers. These borrowers' stories are real and painful. Fortunately, there are solutions.
First, we urge prospective college students to build a plan to pay for the full cost of a college degree. Rather than a semester by semester approach, we encourage a plan that considers the likely level of debt upon graduation to ensure it is manageable based on the expected salary. Our free, web-based tool, the Education Investment Planner, is a good place to start.
Second, graduate. Nothing creates a greater likelihood of default than dropping out. The student leaves with the debt, but not the economic benefit of an education.
Third, reach out to your servicer if times get tough. There are numerous options available to help borrowers successfully manage their payments.
For those with reduced ability to pay, Sallie Mae has developed programs to assist and pave the way to successful repayment. We have modified more than $1 billion in loans through these programs. And most recently, Sallie Mae introduced a transitional repayment plan for new college graduates, as well as new, lower interest rates for students pursuing graduate degrees. Federal student loans have many repayment options – like income-based repayment and pay-as-you-earn programs.
We stand ready to educate customers on these options and enroll them in the program that best fits with their financial circumstance and provide a path to success. At Sallie Mae, we do this better than anyone else.
Our commitment is to help the next generation save, plan and pay—responsibly and successfully—for college. Thank you for attending and your interest in Sallie Mae.
Sallie Mae (NASDAQ: SLM) is the nation's No. 1 financial services company specializing in education. Celebrating 40 years of making a difference, Sallie Mae continues to turn education dreams into reality for American families, today serving 25 million customers. With products and services that include 529 college savings plans, Upromise rewards, scholarship search and planning tools, education loans, insurance, and online banking, Sallie Mae offers solutions that help families save, plan, and pay for college. Sallie Mae also provides financial services to hundreds of college campuses as well as to federal and state governments. Learn more at SallieMae.com. Commonly known as Sallie Mae, SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America.
Patricia Nash Christel, 302-283-4076
Martha Holler, 302-283-4036
Joe Fisher, 302-283-4075
Steven McGarry, 302-283-4074