Student loan giant Sallie Mae will buy the nonprofit USA Group, and the $770 million purchase price will be used to create one of the 60 largest foundations in the U.S., the Washington Post reported June 15.
Sallie Mae is buying the student loan services arm of the group. The rest will become a new independent charitable organization called the USA Group Foundation. The entire purchase price will be paid to the new foundation, making it the second largest in Indiana, after the $11.5 billion Lilly Endowment, and one of the largest in the U.S.
In 1999, the group donated $2.1 million to improve higher education, but after the sale the foundation expects to spend roughly $40 million each year.The group will use its newfound wealth to support research into education access, both by its own staff and by experts at outside institutions, according to a press release.
For Sallie Mae, the deal means the ability to control nearly every aspect of the student loan process, from paperwork to funding to collection.
The merged company will change its name from SLM Holding Corp. to USA Education Inc., though the company will still be referred to as Sallie Mae.
For full text, go to Altavista.