Local Sallie Mae braces for possible layoffs Comments 7 | Recommend 0 February 19, 2010 07:51:00 PM SCARLET SIMS / News Herald Writer
LYNN HAVEN — About 700 local Sallie Mae jobs are at risk while Congress decides the fate of a bill that would put the federal government in charge of student loan origination, Sallie Mae officials said.
“No action is causing us a significant hemorrhage on our business every day,” Company Senior Vice President Renee Mang said. “We are desperate for them to take action.”
Sallie Mae has lost $9 billion in loan volume to date, in part, because of an October letter from the U.S. education secretary that encouraged colleges to switch ahead of the pending legislation. Sallie Mae typically brings in $24 billion a year but is about one-third off that amount for this year. A continued decline will mean layoffs that could begin this summer, Mang said. The Lynn Haven facility is particularly vulnerable because it is charged with originating loans, Mang said.
Sallie Mae officials are unsure which jobs will be cut, but Conwey Casillas, Sallie Mae vice president of public affairs, confirmed that Lynn Haven jobs could be lost. Should the legislation pass, the company says it will have to layoff about a third of its workforce nationwide. Sallie Mae employees have been petitioning legislators to save their jobs by killing the legislation or with an alternative proposed by Sallie Mae and other loan originators. That proposal has not yet been sponsored by a lawmaker.
The education secretary’s letter will be investigated by the inspector general because the department is not allowed to lobby. The letter seemed to pressure colleges to switch ahead of the proposed legislation, said Alexa Marrero, U.S. House Education and Labor Committee communications director.
Several legislators have written to the education department, concerned about the “aggressive outreach to institutions of higher education.” Rep. Allen Boyd, D-Monticello, was listed on one letter from December.
Meanwhile, the federal Legislature is postponing action on the loan origination bill until after the government can reform health care, Casillas said. That delay creates an atmosphere of uncertainty because colleges might need to switch to the government-run Direct Loan program by July 1. Thousands of universities and colleges are unprepared for that switch, according to a November letter from U.S. Sen. Lamar Alexander, R-Tenn.
“The (Legislature’s) delay is potentially hurting jobs in Florida and potentially our business because colleges are moving,” Casillas said.
Just when and how many jobs Sallie Mae could lose has not been determined, officials said. Sallie Mae’s busiest time is coming up in July, Mang said.
“This will be a significant hit to Panama City,” Mang said. “It’s just huge.”
