Sallie Mae Scooped Us

Last week, Higher Ed Watch revealed that Sallie Mae had filed a New York Freedom of Information Law request asking community colleges in the State University of New York (SUNY) system to provide the company with contact information for their students. After posting that item, we learned that the loan giant -- which actively markets private loans directly to students -- had made a similar state open record request to public colleges in Pennsylvania [see request here], and we planned to report that fact this week.

But we were beaten to the punch. A Sallie Mae spokesman told The Chronicle of Higher Education that the company had filed open record requests in three states, including New York. While he did not identify the other two states, a commenter on financialaidpodcast.com, which had picked up our story, noted that similar demands had been made in Pennsylvania.

Responding to our initial story, Sallie Mae officials told The Chronicle that they would not challenge schools that refused to hand over the requested information, which included the names, telephone numbers, and home mailing and e-mail addresses of 'all admitted and enrolled students for academic year 2007-2008." In fact, the company's chief spokesman, Tom Joyce, said that Sallie Mae plans to reach out "to colleges to clarify that it was never our intention to require them to provide us with information they would not willingly share to help students make informed decisions about their loan options." Of course, that explanation begs the question of why they chose to demand the information using state open record laws in the first place.

Sallie Mae officials also denied that they demanded the contact information solely so they could market private loans directly to students. Instead, they said they wanted to inform students about all of their financing options. In fact, the company's marketing materials encourage students to apply directly to Sallie Mae to obtain both federal and private educational loans.

The company told The Chronicle that it had sent the open record requests "to colleges and universities in states where we have seen a significant increase in deceptive marketing practices and misinformation about student loans." Unfortunately, company officials did not provide any evidence for this claim. We, of course, would be interested to see what they've got. But we suspect another explanation: that Sallie Mae had targeted schools whose financial aid offices haven't made the company a preferred lender.

Nevertheless, we applaud Sallie Mae for backing off its demands. We continue to worry however about less scrupulous companies that try to force colleges to turn over personal data on their students. The New York State Freedom of Information Law allows state agencies to deny access to lists of names and addresses that have been sought for commercial purposes, as no public purpose is served by such a disclosure. But other states' open government laws may not be as strict. Perhaps policy makers need to consider strengthening the Federal Family Education Rights and Privacy Act to forbid schools from releasing to commercial enterprises any and all information on a student, without first getting student's written consent.

For now, we are encouraged that most, if not all, colleges have so far resisted efforts by crafty lenders to manipulate laws meant to hold government accountable for their own financial gains. Larry Zaglaniczny, director of Congressional relations at the National Association of Student Financial Aid Administrators, told The Chronicle that his group is advising its members to protect the privacy of borrower information. "And that's why we're suggesting that you can't use it, release it, sell it, transfer it, nor give it" away, he said. We wholeheartedly agree.