Student Loan Marketing Association

	'96 (in $ 000s)	'95 (in $ 000s)
Assets	47,629,890	50,001,735
Net Income	419,410	366,279
Rank Last Year: 3

Description:
The Student Loan Marketing Association, also known as Sallie Mae, is a congressionally chartered, stockholder-owned corporation that buys government-guaranteed student loans from the original lenders to provide additional funds to the education markets. It raises money for its operations by borrowing in the capital markets and packaging the loans into pools and selling them to investors. It is the nation's biggest supplier of funds for student loans and the largest servicer of these loans.

Business Resume: Contact Info -- 1050 Thomas Jefferson St., NW Washington, D.C. 20007 202-333-8000 Main Business -- Student loans Founded -- 1973 Chairperson -- William Arceneaux President -- Lawrence A. Hough (CEO) Employees -- 4,642 D.C.-Area Employees -- 1,769

Developments:
After more than a year of debate and strife, legislation was enacted last year allowing Student Loan Marketing Association to become fully private. The company thus becomes a living laboratory in which to answer the question of whether a large government-sponsored enterprise can sever its federal ties and thrive on its own.

The company began exploring privatization after Congress, at the urging of the Clinton administration, enacted legislation putting the government into the student loan business, thereby threatening to deprive the Student Loan Marketing Association of a major portion of its business.

The fate of the government direct-lending program remains uncertain, but the company has pressed ahead with privatization and will present a plan to shareholders at a special meeting next month. Under its plan, the government-sponsored enterprise would continue to exist for a time as a subsidiary of a newly created holding company, while other subsidiaries would undertake new business. The plan did not sit well with some shareholders, however, and a fight is expected at the special meeting. The objections center on matters of corporate governance—the dissidents see the plan as allowing the current management to entrench itself—and the amount of emphasis to be placed on the student loan business. The dissidents wish to see the company focus on its core student loan business, while management places more emphasis on exploring new areas of business.