| Notes |
USA Group agreed to a sale price of $770 million. Sallie Mae, a publicly held company, paid $400 million in cash and $370 million in stock for the operating assets. Utilization
of the proceeds from the sale presented the directors of the restructured USA Group board with key questions: “How should the mission be defined for the newly formed foundation? How would the funds be invested and expended?”
“These were questions we had anticipated and discussed for a long time,” said Edward R. Schmidt, who was a USA Group executive vice president, general counsel and board member. Beginning in the mid-1990s, Schmidt chaired a task force that would come to be known as SALT (Strategic Alternatives, Legal and Tax). To keep pace with the growing student loan industry, USA Group had developed a wide range of services that arguably no longer fit comfortably within the nonprofit corporate model. The company was rapidly expanding, adding hundreds of employees annually, and was generating sizable revenues. It was reinvesting in new and improved services and products for students and schools. |