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Loan Giant Sallie Mae Goes Private
Nation's largest student lender is sold for $25 billion
By Sarah Levy
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Posted Apr 17, 07 8:37 AM CDT
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(Newser)
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A group of investors is buying student lending giant Sally Mae for $25 billion, even as Capitol Hill debates reducing federal subsidies for student loans. The company—which began as a quasi-public agency—will be taken private by Bank of America, JPMorganChase, and private equity houses J. C. Flowers and Friedman Fleischer & Low.
Sallie Mae shares soared on the news, but critics say that the decision will create conflicts of interest among lenders—the banks will stay in the student loan business—and result in fewer choices for students. Together with Sallie Mae, they control as much as 40 percent of the market, the Washington Post reports.