Privatization of Sallie Mae and Connie Lee. Hearing on Examining Proposed Legislation To Allow for an Orderly Transition of the Student Loan Marketing Association (Sallie Mae) to Private Status...and a Proposal to Privatize the College Construction Loan Insurance Association (Connie Lee) before the Subcommittee on Education, Arts and Humanities of the Committee on Labor and Human Resources. United States Senate, One Hundred Fourth Congress, First Session.

The Subcommittee heard testimony from seven witnesses and statements from three senators on whether or not it is in the Federal Government's best interest to divest itself of the Student Loan Marketing Association (Sallie Mae), and the College Construction Loan Insurance Association (Connie Lee). Lawrence A. Hough of the Student Loan Marketing Association testified that Sallie Mae is poised to move away from government sponsorship, that it would remain committed to the Federal Family Education Loan Program, and that privatization plans must be designed carefully to assure approval by shareholders. Oliver R. Stockwell of Connie Lee testified that Connie Lee was ready and willing to convert to private status. Senator Dodd appeared and spoke in support of privatization. Leo Kornfeld of the Department of Education testified in support of privatizing Connie Lee and cautioned that the current marketplace needs, offset fees, and exit fees must be considered in any Sallie Mae privatization plan. Darcy Bradbury of the Department of the Treasury argued for privatization to reduce the debt that carries some perception of government support. Senator Claiborne Pell urged caution in privatization. A member of the Congressional Research Service, a representative of the Financial Guaranty Insurers, and a representative of First Boston Corporation also testified on privatization issues. Prepared statements of senators and witnesses are included. (JB)