Story on Conversion of Student-Loan Groups Lacked Balance

To the Editor:

We at the Nellie Mae Foundation were surprised that your June 17 article “Another Conversion Bonanza?” included so little of the viewpoints of the student-loan organizations and their new foundations, and so little of our actual activities. We were especially surprised that this occurred in a newspaper that focuses on philanthropy.

Throughout Nellie Mae’s conversion, Consumers Union has been the only critic of the process.

There are hundreds of non-profit grassroots organizations to which Nellie Mae has awarded grants over the last nine years that are now succeeding at helping young people gain access to higher education — and changing the cycle of poverty in their families.

This is not anecdotal; over 50 of those non-profits sent letters to the Massachusetts Attorney General supporting the conversion and welcoming much-needed grant dollars into the region. This information was provided to your reporters but not mentioned as an alternative viewpoint to that of Consumers Union.

The article insinuates that the student-loan companies have undertaken the conversion process in secret. Yet the legislation authorizing the conversion was before Congress for three years before its unanimous passage. The requirements of the state Attorney Generals’ offices — and, in our case, the Supreme Judicial Court — were followed to the letter in each instance. That the Attorney General’s office in one state has less jurisdiction or interest in overseeing these processes is not the fault of the given student-loan organization but the nature of individual state-law parameters.

Nellie Mae believes in organizations’ rights to review our conversion process. And, as you reported, we have provided documents, met personally and spoken with various media representatives since 1997, and held public “town hall”-type meetings to allow interested parties, including Consumers Union, to ask questions, comment on the process, and provide information about various communities that need assistance.

Having attempted to work cooperatively with those at Consumers Union over the past two-plus years, we firmly believe that they do not have the best interests of the larger community of non-profits and schools at heart — but instead are serving their own self-interests in building a niche and gaining name recognition, and new consulting fees, to benefit their organization. Despite Consumers Union’s best efforts at building a coalition of non-profits — their supposed constituents — to rally against Nellie Mae, those organizations, instead, expressed overwhelming support of our grant-making mission and the opportunities it has presented, and will further present, to improve education in the New England region.

We appreciate the time your reporter spent with us to try and understand the historical perspective and the development of the conversion process. Unfortunately, none of Nellie Mae’s responses to Consumers Union issues were included in your article to provide the balance your readers deserve.

Lawrence W. O’Toole
Chief Executive Officer
Nellie Mae Foundation
Braintree, Mass.