June 15, 2000 | Read Time: 2 minutes
By JENNIFER MOORE
The small grant-making arm of USA Group, a non-profit provider of student loans based in Indianapolis, is set to receive $770-million in cash and stock from Sallie Mae, the country’s largest student-loan lender.
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The transaction is part of a business deal just announced between the two lenders.
The cash infusion to the USA Group Foundation, which was created in 1997, would make it one of the country’s 100 largest grant makers.
The move is the latest in a series of acquisitions and tax-status conversions in the student-loan industry — triggered by a 1996 change in federal law — that have resulted in the creation of major new philanthropies. For example, the Nellie Mae Foundation, in Boston, was formed in 1998 and has assets of $395-million.
The USA Group Foundation plans to use its new assets to award roughly $40-million a year in grants — up from $2.1-million last year — to help make higher education more accessible to students from low-income families.
But rather than awarding grants right away, the foundation’s initial plans are “to support research studies by its own staff and experts at outside institutions to frame issues and explore new solutions in the higher education arena,” according to a statement by the foundation. Issues to be studied include barriers that prevent people from attending colleges and universities, particularly high costs, and creative ways to overcome those barriers.
Martha D. Lamkin, USA Group’s executive vice president of corporate advancement, will be the foundation’s executive director; John M. Mutz, former president of the Lily Endowment, will serve as vice chairman.
For more information, contact the foundation at P.O. Box 7039, Indianapolis 46207-7039; (317) 951-5114.
